What Is Construction Project Management? (With Stages)

By Indeed Editorial Team

Published 11 October 2021

Every building construction project has a beginning, middle and end that requires expertise to oversee all aspects. Construction project management can help you better coordinate personnel and material resources to make the life cycle of a building project more streamlined and efficient. It also helps ensure you complete projects on time and within budget. In this article, we answer the question, "What is construction project management?" and we explain who this process involves, outline the stages of construction project management and list common types of construction project management bids, contracts, delivery methods and tools.

What is construction project management?

Construction project management is coordinating all facets of a construction project, from pre-construction to the completed structure. It involves the management of people and resources to control the scope, cost, quality and time of a construction project throughout the project's life cycle. This project management process work involves other disciplines, such as architecture, engineering and city planning.

It's possible to use construction project management for all types of construction projects, such as:

  • commercial construction

  • engineering construction

  • heavy industrial construction

  • residential construction

Related: Key Project Management Skills and How To Develop Them

Who does construction project management involve?

Construction project management involves various professionals and stakeholders, such as:

Project owner

The project owner, or the client, is the party who commissions the project or who is responsible for directly or indirectly financing projects. They typically supervise projects from a high level. They're involved with the decision-making processes for bidding, contract selection and determining the project delivery method.

Construction project manager

A construction project manager oversees all phases of the construction process. They're responsible for all budgeting, coordinating, planning and supervising tasks throughout the project. While construction project managers may work on the project site, they typically work in an offsite field office where they monitor the progress of the project and make decisions about the work.

Some specific responsibilities of a construction project manager may include:

  • collaborating with architects, engineers and contractors to develop plans and establish timelines

  • estimating and negotiating project costs

  • creating and monitoring the budget

  • securing permits and design evaluations

  • making schedules and work timetables

  • determining which methods and strategies are appropriate for a project

  • communicating with clients, contractors and other stakeholders

  • assembling and leading construction leader teams

  • working with building, construction and regulatory specialists

  • managing the day-to-day workflow of a project

Read more: How To Become a Construction Project Manager (With Salary)

General contractor

A general contractor oversees the daily operations of the project on the job site. They're responsible for providing frequent updates to the construction project manager and the project owner. They may provide the equipment, labour and materials required for the project, and they may hire and supervise subcontractors and the work they complete. Contractors are also responsible for establishing and enforcing safety protocols and applying for permits and licenses.

6 stages of construction project management

Each construction project typically goes through different life cycle stages. The typical stages of construction project management are:

1. Design

The construction project management cycle and design stage begin with project managers and other important leaders outlining the project and defining its goals, needs and objectives. This typically requires gathering contract documents, construction specifications and drawings. When a company wins a bid for a project, it also prepares a feasibility report to establish the timeline and budget for the client to approve. Once the client approves the plan, the construction manager can create a site plan that includes the project's design and size and defines all required materials and parts.

2. Planning

The planning stage involves the construction manager organising the project structure and collecting all required permits and documents. They're also responsible for outlining a risk management plan and creating a work breakdown structure and scope document. The purpose of this document is to analyse the purpose, need and key elements of the project to ensure everyone involved with the project understands its requirements and expectations.

Related: How To Use a Risk Assessment Matrix

3. Procurement

The procurement stage involves the construction project managers soliciting bids for equipment, materials and services. They may also negotiate contracts and submit orders. When necessary, general contractors or subcontractors may assist with the procurement stage.

4. Execution

The execution stage is the point at which physical construction begins. Personnel may begin working at the project site, such as to clear the site or perform demolition. During this stage, construction managers typically organise regular meets to evaluate the potential needs to alter project budgets or schedules.

5. Commissioning

The commissioning stage typically occurs once the construction project is at or near completion. The construction team performs equipment and systems testing. They may also meet with clients to discuss operating the new facility.

6. Completion

The completion stage, also called the closeout phase, concludes the construction project management cycle. The client provides the construction team with their feedback about the experience the results. Based on this feedback, the construction project manager prepares a report that discusses how the project went and potential opportunities for improvement in the future.

Types of construction management bids

Construction projects require construction companies or contractors to submit bids to project owners to receive work. Project owners typically use two types of bids. They may use a closed bid, which involves the project owner selecting particular contractors and inviting them to submit bids. Another option would be to use an open bid, which involves the project owner publicly advertising the project, allowing any contractor to submit a bid.

It's essential for project owners to review the bids before selecting one. Some common methods for selecting a project bid include:

  • Best-value selection: Best-value selection involves evaluating the contractor's price, qualifications and request for proposal to select the contractor with the best price-quality relationship.

  • Low-bid selection: Low-bid selection occurs when a project owner chooses the contractor who offered the lowest bid price.

  • Qualifications-based selection: Qualifications-based selection requires project owners to analyse each contractor's request for qualifications to choose the most qualified contractor to complete the project.

Types of construction management contracts

Once selecting a bid, project owners and contractors sign a payment agreement contract. These legal documents outline the project scope and payment terms. Common types of construction management contracts include:

  • Cost-plus contract: A cost-plus, or a cost-plus fee, contract establishes the project owner pays contractors a fixed fee and additional costs added throughout the project.

  • Guaranteed maximum price: A guaranteed maximum price is similar to a cost-plus fee contract, but it establishes a maximum price the project owner pays.

  • Lump sum contract: A lump sum contract, or a fixed price contract, establishes a total project for the project.

  • Time and materials contract: A time and materials contract involves the general contractor charging an hourly rate for materials and labour.

  • Unit pricing contract: A unit pricing contract establishes unit prices for materials for projects that have costs that a contractor can't determine in advance.

Related: How To Write a Project Scope Document

Types of construction project delivery methods

A construction project delivery method establishes how project owners, contractors and designers interact throughout projects. Common types of delivery methods include:

  • CM at risk: This model empowers the construction manager to consult with the project owner and oversee the contractor during construction.

  • Design-bid-build: This method involves choosing a general contractor after the design phase.

  • Design-build: This method involves a design-builder completing the design and build phases.

Types of construction project management tools

Effective construction project management requires careful coordination, organisation and planning. Construction project managers may use a variety of tools to help ensure efficient operations. Some common tools they may use include:

Construction project management software

Construction project management software programs help companies manage the entire project life cycle. They help with overall project planning and scheduling by prioritizing tasks and managing resources. This type of software program also provides project managers with a way to get feedback from project stakeholders.

Gantt chart

A Gantt chart is a managerial tool used to display a project schedule. It shows key elements of a project, such as the start and finish dates and resources. A Gantt chart looks like a bar chart. The vertical axis containing the list of project tasks, and the horizontal axis showing a graphical representation of the time for each task.

Related: 15 Types of Graphs and Charts (With Examples)

Reporting tool or communication platform

Communication platforms and reporting tools allow all stakeholders involved with the construction project to communicate effectively with one another. This may help improve productivity throughout the project and simplify task management efforts. Common examples of tools to use include email and instant messaging.

File storage and sharing

Software programs for file storage and sharing among stakeholders make it easier to get documents seen and signed. Some programs can also send notifications when a file changes and track the history of any changes made in case of an audit. Consider using a cloud storage service to simplify easy access to documents.

Bookkeeping software

Managing the budget of a project is an essential task for construction project managers. Using a bookkeeping software program may help organise and streamline the budget development and management processes. While exact features may vary, most software programs allow construction project managers to track payments and maintain financial records to create a detailed history of billing activities.