Liberalising property management

Purchasers and residents of strata properties can breathe easier thanks to the introduction of the Register of Property Managers. Stakeholders hailed the move as “liberalising” the industry.

Launched on Jan 11, the register is the latest twist in a decade-long debate over the status of property managers in national legislation.

This included the controversy over defining the term in the Strata Management Act 2013.

Minister of Urban Wellbeing, Housing and Local Government (KPKT) Tan Sri Noh Omar said: “I am confident that introducing the Register of Property Managers will raise the standards of property management in the industry.

“In addition, with the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP) regulating the profession, it is my hope that all property managers will help improve living standards for society at large.”

Battersea sale timely for SP Setia

SP SETIA Bhd’s move to sell off some of its assets in the Battersea project in London to Permodalan Nasional Bhd (PNB) and the Employees Provident Fund (EPF) has taken some industry players by surprise. But the move is largely seen as positive for the property giant.

A property analyst tells FocusM that although there are some concerns that the developer is disposing its assets too early, in the long run, it could be a win-win situation for buyers and sellers.

“It is quite normal for a developer to monetise assets when the time is right. With the uncertainty surrounding Brexit [UK’s withdrawal from the European Union] still hanging over the London market, it could be the right time for SP Setia to dispose some its prime assets there.

“This would raise funds for them to utilise in other projects. On the other hand, the buyers [PNB and EPF] have more financial muscle and staying power to weather the storm and profit when the London property market moves upward again.

“London properties are still favoured by foreign investors despite experiencing a slowdown last year. Prices have escalated 70% in the last decade,” says the analyst.

Crest Builder lands RM328m construction project

KUALA LUMPUR: Crest Builder Holdings Bhd has secured a contract by Perdana Parkcity Sdn Bhd for the construction of main building works in Desk ParkCity, Kuala Lumpur, for RM328.8mil.

StarBiz Premium reported earlier on Tuesday that the construction and property developer was poised to land the contract, its second over the last week.

At market close on Tuesday, the counter was three sen or 3.09% higher at RM1 a share with 2.08 million shares exchanging hands.

According to the filing with Bursa Malaysia, the construction of main building works consists of two blocks of 40-storey residential apartments and a car park podium.

The contract, which was awarded to the group’s wholly-owned subsidiary, Crest Builder Sdn Bhd, is for a period of 33 months from Feb 9, 2018 to Nov 8, 2020, and will bring the company’s order book to about RM1.3bil.

“The contract is expected to contribute positively to the earnings of the Group for the financial years ending 31 December 2018 and onwards,” the group said in the filing.

Last week, the company announced that it had won the mandate to construct the main building works of a 44-storey hotel and a car park in Kuala Lumpur for RM149.5mil.

Crest Builder, which has won several large contracts to build high-rise buildings, recorded a net profit of RM20.28mil on turnover of RM342.95mil for the nine months until September 30, 2017.

Turnover and profit were significantly higher compared to the corresponding period last year where it managed a profit of RM9.9mil on turnover of RM180.14mil.

The company attributed the stronger performance in FY17 to the higher sales generated by its ongoing property projects.

Crest Builder started as a small construction outfit in 1983 with less than 10 staff by the late Yong Soon Chow. Today it is a large builder and property developer with more than 500 people.

Malaysia construction industry offers positive news

Malaysia is a “brightening spot” in the Asia Pacific infrastructure market, according to recent analysis from BMI Research, providing good news for the country’s construction industry. Growth in the construction sector is now expected to hit an annual average of 6.3% between 2017 and 2021, after growth of 10.6% in 1H2017.

The boost to growth forecasts comes as the Malaysian government prioritises infrastructure development with MYR46 billion (US$10.8 billion) allocated in 2017 to infrastructure projects. The country is also on the received end of significant inward investment from China as part of the Belt and Road Initiative.

The Belt and Road Initiative is a Chinese development strategy that aims to boost land and maritime connectivity from China to Europe. The maritime element – the so-called 21st Century Maritime Silk Road – includes investment in infrastructure in southeast and south Asia, the Middle East and North Africa.

Despite this, Malaysia’s largest cement producer, Lafarge Malaysia Bhd, a subsidiary of Swiss-based major, LafargeHolcim, is cautious on the outlook for cement demand this year, after a 6% contraction in 2016.

“This year we see a number of infrastructure projects that are gaining momentum and this will have more of an impact in the second half of the year,” said Lafarge Malaysia’s President and CEO, Thierry Legrand told reporters after the company’s Annual General Meeting in May. “With infrastructure projects gaining momentum, it should bring more volumes. But how fast this will happen, it is difficult to say.

Katerra, a construction startup, raises new round from Softbank

LONDON: Over just three years, Katerra has grown from a startup with an unusual approach to the construction industry into a company with $1.3 billion in bookings.

Now it has drawn support from one of the biggest and most disruptive backers of startups around.

Katerra planned to announce on Wednesday that it has raised $865 million in a new round of financing led by SoftBank’s Vision Fund, the nearly $100 billion investment vehicle that has shaken up the world of ..

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The Most Demanded Construction Jobs

The United States Bureau of Labor is predicting that the next four years—between 2016 and 2020—are going to be high-growth years in the construction industry. Though growth has been slower than expected, there are specific career paths that show perpetual promise, and we’ve compiled a list of 10 that you should definitely keep an eye on as in-demand, high-growth areas within the industry.

Cost Estimator

Not all construction jobs require manual labor, so if you aren’t the physical type, there are still plenty of opportunities to work in a lucrative construction-related field.

Among those “hands-off” kinds of jobs, cost estimator is among the highest paying, and demand for good estimators is high. Most employers do require a minimum of education and experience along with the ability to use current cost estimator software before considering someone for this job, but anyone with a finance background and proven success record with budgeting should be able to get a foot in the door.

Construction Manager

Construction managers are also among the best paid in the industry. Many construction managers find themselves making tidy six-figure incomes after just a few years on the job and right now, demand for new ones is high. Government contracts alone over the next few years are going to give rise to the need for many more teams of qualified construction professionals, all of which are going to need solid leadership to keep projects running on schedule and within budget.

Construction managers of all types are responsible for things like that and much more.

Plumber

Plumbers looking to work either directly for or subcontract with construction agencies are in luck in 2016. Direct hires are often required to have minimal educational credentials but will need to demonstrate having completed at least a four- to five-year apprenticeship program to be considered.

For subcontractors, it is a bit easier, although upper management will likely still want to check into experience and references before green-lighting the contract.

The need for plumbers in construction is spurred on by several factors, not the least of which is the upsurge of new building construction that has already begun and is anticipated to be on the rise over the next few years. There is also high demand for plumbers who can do refurbishment of old systems and replace them with higher-efficiency, low-flow systems. It has also been observed that a larger number of plumbers have been retiring in recent years, mostly due to the Baby Boomer generation beginning to make its exit from the active workforce.

Glazier

If you can say definitively that you aren’t afraid of heights, you might want to look into a job as a glazier. Glaziers are responsible for cutting and fitting windows, storefronts, and skylights. They also seal, fasten, and remove glass from every conceivable location and from every conceivable height. The sheer nature of this job leaves it in perpetual demand, and it is a trade that is relatively easy to learn.

Concrete Finisher and Cement Mason

Masons and finishers literally lay the foundations for successful construction projects.

They work with various reinforcing materials such as rebar, then pour, spread, and level cement mixtures, and monitor the hardening of the material. They then apply sealants to create a strong and reliable foundation upon which to build. It is a job of vital importance and requires numerous hands to get the job done. That is why it has been and will remain a high-demand job in construction, and one that doesn’t require years of education or training to master.

Painter

Good painters are always in demand. In many cases, this is one area of construction that can provide entry-level experience that leads to better-paying and even permanent employment positions. It isn’t the most lucrative of jobs, but it often requires no skills or experience, and large jobs call for numerous painters at every skill level to complete the project on time.

Some companies even offer apprenticeship programs for those who want to make painting their career.

Construction Worker

We complete our list with the one most common and perpetually in-demand job in construction: the general construction laborer. This is a great entry-level position for those with little education or experience, who want to get in on the ground floor of an industry where there is real growth potential and opportunities to expand on their skills sets abounds. This is now and will always be the most in-demand job on any construction site, and looking into the future, now is a great time to apply for general construction labor jobs.

Must-Have Items on a Scope of Work

How to Write a Solid Statement of Work (SOW)

The Statement of Work, sometimes called the scope of work, can do a great construction contract even better. A well-written statement of work must be clear, complete, logical and concise enough to be understood by the contractor and the construction manager that will be providing the administrative portion of the contract. The SOW must describe in details the expected performance of the contractor, converting it into a measuring tool for the construction manager.

The scope of work must be prepared with help from corresponding departments and professionals that will eventually take part in the developing and construction process. For example, a scope work for a drywall contractor will include types of interior finishes required, designs, material needed, prices and budget, the deadline, special requirements, etc.

What Type of Wording do I Need?

statement of work wording is vital and must be clear to reduce claims, litigation, and other related problems. A scope of work is the preferred method used in the construction industry to even get construction financing and will be the base for yourconstruction insurance company when providing the proper bonding. A nice SOW should avoid arguable or ambiguous phrasing and must identify the project deliverable and its objectives. Special emphasis should be given to the statement of work wording to avoid or make impossible two different interpretations of the same SOW.

If an action is mandatory, the statement of work wording will contain the words shall ormust. A contractor that receives the scope of work that is unclear, might refrain from participating in the bidding process. The statement of work should avoid including cost of products or services that a contractor may claim they were supposed to furnish or provide.

Statement of Work Basic Components

A statement of work should have the following components:

  • Project Overview- A brief statement describing the business needs and a short summary of the project description.
  • Project Deliverables– This section should include all the expected goals and targetsthat must be achieved through the project. It must include all related information that will help a contractor in understanding the project’s requirement.
  • Project Scope – This section of the statement of work should contain, in terms of budget and technical data, the quantifiable goals set forth under the construction contract, Is an essential part of the SOW. Statement of work scopes might divide the document into two parts:

a. Technical considerations – Specific technical or methodologies relevant to the contractor’s performance and how he will be measured against

b. Tasks – Specific requests and tasks that are needed to satisfy project objectives, with detailed milestones and results that should be obtained from these tasks.

  • Project Schedule– Summarize the project schedule including all related task so the contractor can deliver on time. This section of the statement of work (SOW) should contain all important delivery dates, time restrictions, and the expected project duration.
  • Project Management– The management section of the SOW must contain a description of how payments will be issued, change control process, specific contract and legal requirements, phasing or stages of the project and the project’s limitations. It is also the area on which time management and contract administration will be specified.

How Accurate the Scope of Work Needs to Be?

Follow these guidelines to determine if you are preparing or receiving a complete Scope of Work (SOW):

If these items form part of your SOW document, then you are off to a good start, if not, you can be exposed to claims and adverse situations that might affect cost and schedule in your project.

  • The SOW identifies the contractor’s responsibilities.
  • Provides precisely contract objective and project requirements.
  • The SOW provides enough details to estimate labor costs.
  • Includes a contracting method and the payment schedule.
  • The Statement of Work has only one interpretation.
  • The SOW explains standards, regulation, and special contract requirements.
  • The Statement of Work presents in a clear manner all related task, duties, and limitations to obtain expected results in accordance with the project goal.

Most Desired Construction Positions

Construction Managers

Construction managers head up the construction project. They direct lower-level managers, including construction workers and their supervisors. The Bureau of Labor Statistics states that construction managers make an average of $85,630 per year average as of 2014.

Those in the highest 10 percentile earned in excess of $149,000. The lowest percentile makes just over $50,000.

A solid 50 percent of the construction managers employed in the United States earn somewhere between $60,000 and $110,000 annually. When one looks at those numbers, it isn’t hard to see why this is a very sought-after position. It is also the one on our list with the largest number of opportunities.

Construction Supervisors

Construction supervisors are also known as foremen on the job site. They are on a lower level of management than construction managers but they often share a number of the same responsibilities. Construction managers work closely with labor to ensure that work gets done on time, with strict adherence to all standards of quality and safety.

Most construction supervisors make between 20 and 40 percent less than the construction manager(s) on a given project, although some companies do narrow that gap considerably, especially in circumstances where the work is more hazardous, as supervisors often work more directly with labor than managers and often find themselves further in harm’s way.

Installation Manager

The median salary for a first-year installation manager is approximately $57,730. The actual pay range is somewhere between $39,149 and $82,201, depending on the job and the industry. In some areas, these numbers do increase considerably, so anyone who is willing to relocate for better pay would be wise to explore all the opportunities that exist within this position.

Construction Inspection Services Manager

The median salary for a construction inspection services manager is $86,253. The actual pay range can vary depending on various factors (including location, project type, project length, etc.). Low-end salaries are approximately $72,000 and high-end salaries can be as high as $92,000. This is a good career path for a construction professional with a broad range of experience working on a diverse description of projects. He or she also has to be familiar with all applicable laws and regulations, as well as the standards set forth for the project between the client and the general contractor.

Building and Grounds Supervisor

The median salary for a building and grounds supervisor salary is approximately $46,374, with an actual range between $30,339 and $77,239 per year. The actual salary here is also influenced by many of the same factors as listed above. Building and grounds supervisors working in the United States have a solid background in their field and often enter the position with an excess of 10 years of experience.

These positions are also somewhat abundant and easier to land than some of the others on our list. Building and ground supervisor is also a career path that can net huge rewards in the form of higher pay if the individual is willing to relocate permanently or travel for extended periods to complete a job.

Common Types of Construction Contracts

A construction contract provides a legal binding agreement, for both the owner and the builder,  that the executed job will receive the specific amount of compensation or how the compensation will be distributed. There are several types of construction contracts used in the industry, but there are certain types of construction contracts preferred by construction professionals.

Construction contract types are usually defined; by the way, the disbursement is going to be made and details other specific terms, like duration, quality, specifications and several other items.

These major contract types can have many variations and can be customized to meet specific needs of the product or the project.

Lump Sum or Fixed Price Contract Type

This type of contract involves a total fixed priced for all construction-related activities. Lump sum contracts can include incentives or benefits for early termination, or can also have penalties, called liquidated damages, for a late termination. Lump Sum contracts are preferred when a clear scope and a defined schedule has been reviewed and agreed upon.

This contract shall be used when the risk needs to be transferred to the builder and the owner wants to avoid change orders for unspecified work. However, a contractor must also include some percentage cost associated with carrying that risk. These costs will be hidden in the fixed price. On a lump sum contract, it is harder to get credit back for work not completed, so consider that when analyzing your options.

Cost Plus Contracts

This type of contract involves payment of the actual costs, purchases or other expenses generated directly from the construction activity. Cost plus contracts must contain specific information about a certain pre-negotiated amount (some percentage of the material and labor cost) covering contractor’s overhead and profit.

Costs must be detailed and should be classified as direct or indirect costs. There are multiple variations for Cost plus contracts and the most common are:

  • Cost Plus Fixed Percentage
  • Cost Plus Fixed Fee
  • Cost Plus with Guaranteed Maximum Price Contract
  • Cost Plus with Guaranteed Maximum Price and Bonus Contract

Cost plus contracts are used when the scope has not been clearly defined and it is the owner responsibility to establish some limits on how much the contractor will be billing. When some of the aforementioned options are used, those incentives will serve to protect the owner’s interest and avoid being charged for unnecessary changes. Be aware that cost-plus contracts are difficult or harder to track and more supervision will be needed, normally do not put a lot of risk in the contractor.

Time and Material Contracts When Scope is Not Clear

Time and material contracts are usually preferred if the project scope is not clear, or has not been defined. The owner and the contractor must establish an agreed hourly or daily rate, including additional expenses that could arise in the construction process.

The costs must be classified as direct, indirect, markup, and overhead and should be included in the contract.

Sometimes the owner might want to establish a cap or specific project duration to the contractor that must be met, in order to have the owner’s risk minimized. These contracts are useful for small scopes or when you can make a realistic guess on how long it will take to complete the scope.

Unit Pricing Contracts

Unit pricing contracts is probably another type of contract commonly used by builders and in federal agencies. Unit prices can also be set during the bidding process as the owner requests specific quantities and pricing for a pre-determined amount of unitized items.

By providing unit prices, the owner can easily verify that he’s being charged with un-inflated prices for goods or services being acquired. Unit price can easily be adjusted up and/or down during scope changes, making it easier for the owner and the builder to reach into agreements during change orders.

Essential Contract Documents for Every Construction Project

Constructing a solid contract represents one of the first steps toward the success of your project no matter what you’re building. This list explains the documents that are typically a part of every construction contract. There are also numerous other exhibits or forms that you can use in combination with these documents.

1

 Contract Agreements and Contracts

Woman signing contract at desk at car dealership
Westend61/Getty Images

This agreement is used by the contracting officer or owner and the contractor. It’s an essential component of the contract documents. It’s the main document to which most other documents attach or reference.  More 

2

 Statement of Work (SOW)

Carpenter's helper
 Easy way to calculate lenghts using the app. Photo J Rodriguez

Having a solid scope of the work involved is helpful during the bidding process and later on during the construction sequence. A well-defined scope can be used to determine the amount of work needed to complete the project.  More 

3

 General Conditions

General Conditions
 General conditions are vital to a project. Photo PortlandGeneralElectric Flickr

This contract document defines obligations regarding the execution of the project as well as each party’s rights. Overhead costs, what to claim, and your entitlements must be included in this portion of the contract. More 

4

 Special Conditions

Special conditions
 Special conditions will dictate specific requirements. Photo US ARMY

This is usually an extension of the contract and an addendum to the general conditions. It should specify certain conditions and clauses that pertain to each particular project or job. Pay special attention to specific instructions and requirements on how to perform the work.

5

 Bill of Quantities

This document is formed by the list of diverse trades and materials that will form part of the construction. Sometimes this document is not required by the contracting officer. More 

6

 Drawings

As-built drawings
 As-built drawings. Photo Aldona Fire

All contracts should include a set of drawings that form part of the job to be performed. These drawings are usually the latest and most recent available and must be received by the contractor prior to the date of commencement. They must include all drawings from consultants, and they’ll constitute the entire project that’s being contracted.More 

7

 CSI MasterFormat Outline

This is the technical requirement to complete, execute, and/or perform every little task or supply every material being incorporated into the construction project. It will add intelligence to the construction drawings, specify common standards, explain deviations that have been accepted, detail materials that have been accepted, and cite the required testing for all materials. Specifications are usually made by referencing construction standards and codes. More 

8

 Creating Construction Schedule

 Schedule sample. Courtesy of jwalker64

The construction schedule is an important component of the document. The contracting office will know how and when the project will be completed by reviewing this part. Construction contracts sometimes require updated schedules throughout the construction progress, and they might form part of the monthly or agreed term for application for payments. More 

9

 Costs in the Construction Industry

Building materials
 Building materials. Photo J Rodriguez

This is a breakdown of all items being incorporated in the construction project. It’s usually the base of the application for payment. It can be detailed per item or in a lump sum form that doesn’t specify individual items. More 

10

 List of Common Types of Construction Insurance

This is an essential part of the contract because it provides a guarantee to the owner that the contractor has the means and the economic backup to perform under the terms of the construction contract. It will include specific types of coverages, required bonding, and all insurance protections available to the owner, the contractor and third parties. More