UNIVERSITY OF THE EAST

Graduate School
Manila

MASTER OF SCIENCE IN CONSTRUCTION MANAGEMENT (MSCM)

PROGRAM
GCT 7206 - Contracts Specifications and Management Changes, Claims and
Negotiations

Name: Engr. Jan Adrian G. Hernandez Date: March 25, 2023

Student No.: 20220125702 GCT 7206-1S

MIDTERM EXAMINATION

TEST I
A. EXPLAIN the following:
1. Loan Payment in Construction

Loan payment in construction refers to the process of repaying

borrowed funds used to finance a building project. It entails getting a
construction loan, disbursing cash in stages, making interest-only
payments throughout construction, converting the loan to permanent
financing, and repaying the loan according to the agreed-upon terms. A
construction loan is a short-term loan used to fund the construction of a
home or other real estate project.

2. Features and Benefits of Extra Credit in Construction Management

Extra credit in construction management often refers to additional work

or tasks completed beyond the project's original scope. These tasks
may be performed in order to boost project performance, attain better
quality, or address unanticipated concerns. Going above and beyond
the initial scope might also serve a construction manager to build a
reputation for producing high-quality work. This can help attract new
clients and secure future projects. Customers value proactive
construction managers who resolve potential concerns before they
 become problems. Increased client satisfaction and greater
connections can also result from extra credit in construction
management.

3. Significance of corporate social responsibility in construction

Corporate social responsibility is the notion that businesses should

have a beneficial impact on the community and society as a whole
rather than focusing just on profit. Corporate Social Responsibility is
significant in the construction sector for a variety of reasons, including
environmental sustainability, community relations, employee well-being,
ethical business practices, technological innovation, regulation
compliance, and philanthropy. Construction businesses can
demonstrate their dedication to these principles and positively
contribute to society by incorporating corporate social responsibility
efforts into their operations.

4. Grand strategies in construction management and its classification.

The Grand Strategies are the corporate-level strategies aimed to

identify the firm's decision regarding the direction it pursues to achieve
its goals. Essentially, it entails the selection of long-term strategies
from the possibilities available.

Grand strategies can be classified into four different categories, namely:

a. Stability Strategies: These strategies aim to keep a construction

company's current position and performance while avoiding
considerable growth or change. Companies who are
comfortable with their market position or wish to consolidate
their resources before embarking on more aggressive growth
initiatives should pursue stability strategies.
b. Growth Strategies: These strategies seek to expand the
construction company's market presence, client base, and total
 business size. Organic or inorganic growth strategies can be
undertaken.
c. Retrenchment Strategies: These strategies reduce the size,
scope, or operations of a construction company to solve
financial, competitive, or organizational issues. Depending on
the circumstances and long-term objectives of a corporation,
retrenchment plans may be temporary or permanent.
d. Combination Strategies: These strategies involve using a mix of
stability, growth, and retrenchment tactics to handle various
areas of the operations or market situations of a construction
company. It is possible to balance risks, capture opportunities,
and traverse the intricacies of the construction sector by
employing combination methods.

5. Project Control

Project control is an essential element of project management that

entails monitoring, tracking, and managing a project's progress to
ensure that it meets its objectives in terms of quality, schedule, and
budget. It consists of a series of processes and strategies that assist
project managers in identifying deviations from the project plan,
evaluating their impact, and implementing corrective actions to keep
the project on track.

6. Are the established policies based upon careful analysis of the

objective and ideals of the company?

Certainly, established policies at a well-managed company are often founded

on a careful analysis of the company's objectives and principles. These rules
are intended to provide a framework for decision-making, govern employee
behavior, and ensure consistency in the organization's operations. They
frequently represent the organization's mission, vision, and values, as well as
its strategic objectives.
A full assessment of the company's objectives and values ensures that
policies are in line with the overall direction and priorities of the firm. This
congruence is critical for establishing long-term success, driving growth, and
fostering a positive company culture.

TEST II

A. How would you mediate dispute between Construction Management

and Construction Workers?

Mediation is a private dispute resolution method in which the parties

collaborate with a mediator to reach an agreement. The mediator is a
third party who is trained to help the parties reach an agreement.
Furthermore, for construction disputes, the mediator typically has
construction industry experience. Mediation is both simpler and less
expensive than litigation or arbitration. Mediation sessions normally last
only a day or two, as opposed to a court trial or arbitration hearing,
which might last weeks.

a. Preparation: Learn about the project's background, the parties

involved, and any relevant contractual, legal, or regulatory
constraints. Provide a neutral and friendly environment for the
mediation process, ensuring that all parties feel respected and
acknowledged.
b. Set the ground rules: Remind the parties that mediation is a
non-binding, voluntary procedure aimed at reaching a mutually
acceptable outcome. Throughout the mediation process,
encourage open communication, active listening, and polite
behavior.
c. Determine issues and interests: Urge each side to communicate
their concerns, grievances, and requirements. Determine the
main issues and underlying interests of construction
management and construction workers. To ensure mutual
 understanding, summarize and clarify the identified issues and
interests.
d. Create resolution options: Conduct brainstorming sessions to
identify viable solutions that address the requirements and
interests of both parties. Urge the parties to consider innovative
and adaptable solutions while highlighting the significance of
collaboration and mutual gain.
e. Assess and negotiate alternatives: Assist the parties in
evaluating the advantages and disadvantages of each
suggested solution, taking into account such elements as
feasibility, cost, and impact on project timeframes. Support
negotiations between the parties as they strive toward a
resolution that is mutually acceptable.
f. Reach an agreement: Once the parties have reached an
agreement, assist them in developing a clear and detailed action
plan defining the processes, responsibilities, and dates for
implementation. Urge the parties to legally document the
agreement and, if required, seek legal counsel to ensure its
enforceability.
g. Follow-up: Arrange a follow-up meeting to assess progress and
discuss any new issues or concerns. As appropriate, provide
continuing assistance to aid in the maintenance of a strong
working relationship between construction management and
construction personnel.

B. Explain the following:

1. SWOT analysis

SWOT analysis is a strategic planning tool used to assess a

company's, project's, or situation's Strengths, Weaknesses,
Opportunities, and Threats. Organizations may design strategies that
leverage on their strengths and opportunities while limiting their
weaknesses and dangers by identifying and analyzing these aspects.
 This analysis assists decision-makers in making educated decisions
and prioritizing resources for the greatest benefit.

2. Cost Benefit Analysis

A cost-benefit analysis is a systematic approach used by corporations

to determine which decisions to make and which to avoid. It weighs the
potential rewards of a circumstance or action and then subtracts the
overall expenses of that activity. Cost-benefit analysis needs significant
research across all forms of costs. This includes taking into account
unforeseeable prices and comprehending expense types and
characteristics. This level of analysis only reinforces the conclusions
when additional study is conducted on the project's state of outcome,
which gives better support for strategic planning attempts. It is
important to emphasize that Cost-Benefit Analysis has limitations, such
as the difficulties of quantifying intangible advantages and the
subjectivity of assigning monetary values. Nevertheless, Cost-Benefit
Analysis remains an essential tool for decision-makers in analyzing and
prioritizing projects, investments, and policy decisions.

3. Pareto Analysis

Pareto analysis is a technique utilized in business decision-making, but

it also has applications in a variety of other domains, including welfare
economics and quality control. It is mostly based on the "80-20 rule." It
is based on the notion that 80% of a project's benefit may be obtained
by performing 20% of the labor, or that 80% of issues can be traced
back to 20% of their causes. As a technique for making decisions,
Pareto analysis statistically differentiates a small number of input
components, which have the most influence on an output. Using Pareto
analysis, each problem or benefit is assigned a numerical score based
on its impact on the organization; the higher the score, the larger the
impact. Contemporary implementations of Pareto analysis are utilized
to determine which issues generate the greatest problems in particular
 departments, organizations, or business sectors. By directing
resources to issues with higher scores, businesses can utilize Pareto
analysis to handle problems more efficiently, as they can focus on the
issues with the greatest impact on the business. The Pareto analysis is
a valuable decision-making and quality tool. In the broadest sense, it is
a method for gathering the facts necessary for defining priorities.

4. Monte Carlo Analysis

The Monte Carlo Analysis is a risk management technique that project

managers utilize to evaluate the effects of different risks on the
project's cost and schedule. With this strategy, it is simple to determine
how a risk may affect the project's schedule and budget. It is utilized at
various stages of the project life cycle to gain an understanding of a
variety of possible outcomes under diverse circumstances. It is called
after the Monte Carlo casino in Monaco because it models uncertainty
in complex systems using randomness. Several industries, including
finance, engineering, project management, and risk analysis, employ
the technique extensively.

5. Force Field Analysis

Force field analysis is a fundamental tool for root cause analysis that
enables you to take action once the root cause has been determined.
The method assumes that all situations are the consequence of forces
for and against the current state being in balance. Inducing a change
through reinforcing positives and eliminating or lowering negatives is
facilitated by counteracting opposing forces and/or amplifying favorable
factors. In the 1940s, social psychologist Kurt Lewin developed Force
Field Analysis, which he initially employed in his studies. Today,
however, it is also utilized in the workplace to make and communicate
go/no-go decisions. Understanding the dynamics of a scenario,
challenge, or decision is facilitated through Force Field Analysis. By
recognizing and assessing the elements that drive change, decision-
 makers can make more informed decisions and build successful
strategies for achieving their intended results.

6. Fish Bone Analysis

Fishbone Analysis, also known as the Ishikawa Diagram or Cause-and-

Effect Diagram, is a visual technique used to identify, evaluate, and
classify the various causes of a problem or issue in a systematic
manner. Dr. Kaoru Ishikawa, a Japanese expert in quality control,
invented it in the 1960s. The fishbone analysis assists teams in
systematically identifying the underlying reasons of an issue and
devising suitable solutions. The fishbone graphic mimics a fish's
skeleton, with the "spine" representing the issue and the "bones"
showing possible reasons. These bones are categorized in a manner
that varies based on the setting and industry. Typical categories
include people, procedures, equipment, materials, and environment.

7. SMART Analysis

SMART analysis is a strategy for creating objectives that guarantees

they are Specific, Measurable, Achievable, Relevant, and Time-bound,
hence the acronym SMART. This strategy increases the likelihood of
achieving your objectives by offering a defined structure to follow. A
Specific goal is distinct and unambiguous, leaving no space for
ambiguity. It provides answers to who, what, where, when, and why. A
Measurable goal enables you to track your progress and identify when
it has been attained. It incorporates measurable measures or
objectives that make it simple to track progress. An Achievable goal is
reasonable and realizable, given the available resources and
constraints. It should be difficult but not impossible to achieve. To
establish whether a goal is attainable, it is necessary to examine
budget, staff, and time restrictions. Establishing objectives that are
unattainable can result in dissatisfaction and a lack of desire. A
 Relevant goal is consistent with your larger objectives and priorities. It
should be beneficial and directly contribute to your organization or
personal success as a whole. When establishing a goal, you should
assess whether it aligns with your long-term vision and whether now is
the appropriate moment to pursue it. A Time-bound goal has a specific
deadline or timetable, which helps to generate a sense of urgency and
motivation to fulfill it. Furthermore, deadlines allow one to evaluate your
work and make necessary improvements. By utilizing SMART analysis
to establish objectives, you may develop a clear and executable plan
that increases your likelihood of success. The SMART criteria ensure
that your goals are well-defined, measurable, attainable, connected
with your overall objectives, and time-bound to keep you motivated and
engaged.

8. ETC

ETC analysis serves as an essential project management method for

calculating the remaining cost of a project and detecting potential
difficulties or risks that may affect the project's progress and budget.
ETC analysis refers to the Estimate to Complete analysis. It is used to
estimate the remaining cost of a project based on its actual
performance and progress to such a point in time. ETC analysis
enables project managers to monitor a project's financial health and
make informed decisions to keep the project on schedule and within
budget. It is a vital component of the whole process of project cost
control. By performing ETC analysis on a regular basis, project
managers can make educated decisions and take the necessary steps
to maintain the project on schedule and under budget.

TEST III
1. Cite an effective construction project management method that will
work in construction contracts.
 The Critical Path Method (CPM) is an efficient technique for managing
construction projects that is widely employed in construction contracts.
CPM assists project managers in planning, scheduling, and managing
complex construction projects by identifying the sequence and
dependencies of activities.

The Critical Path Method entails listing all the tasks necessary to
complete the project from start to finish; assigning a time estimate to
each task; determining the relationships between tasks, such as which
tasks must be completed before others can begin; drawing a network
diagram and creating a visual representation of the project tasks;
calculating the critical path; scheduling tasks and allocating resources;
monitoring progress; and updating and refining the schedule. Utilizing
the Critical Path Method in construction contracts enables project
managers to plan and manage construction projects effectively,
ensuring timely completion and efficient use of resources. This
approach provides a comprehensive view of the project's progress and
potential bottlenecks, enabling proactive adjustments and improved
decision-making.

TEST IV
1. What are the principles of construction contracts and explain?

Construction contracts are legal agreements that are entered into by

the parties involved in a construction project, such as the owner,
contractor, and subcontractors. These contracts define each party's
responsibilities, rights, and obligations and ensure that the project is
completed in accordance with the terms agreed upon.

A construction contract contains several principles that should be

observed. Legality is one of them. Construction contracts must be in
accordance with local laws and regulations. This includes obtaining
necessary permits, adhering to building codes, and following labor and
safety regulations. Acceptance and Fair Offers should be the second
principle. When one party makes an offer and the other accepts it, a
construction contract is formed. The scope of work, timeline, and
payment terms should all be specified in the offer. Acceptance must be
unequivocal and unequivocal, indicating agreement with the terms of
the offer. Consideration should be a third principle. In a construction
contract, consideration is the exchange of value between the parties.
This can take the form of money, goods, or services. Both parties must
provide consideration for a contract to be legally binding. Mutual
Obligation should be another principle. The parties in a construction
contract must mutually agree on their respective obligations. This
means that each party is accountable for meeting its contractual
obligations. The next principle to take into consideration is Certainty
and Clarity of the agreement. A construction contract's terms and
conditions, including the scope of work, project timeline, payment
terms, and dispute resolution methods, should be clear and detailed.
Uncertainty in a contract can lead to litigation and project delays.
Following that, Fairness and Good Faith should be included. A
construction contract requires the parties to act in good faith and fairly.
This principle requires the parties in their transactions to be truthful,
transparent, and cooperative, and to avoid taking advantage of one
another. Similarly, Risk Allocation should be considered. Construction
contracts typically allocate risks among the parties, such as the risk of
unforeseen site circumstances, delays, or regulatory changes. A proper
risk allocation can help to reduce disagreements and ensure a more
efficient project execution. Furthermore, in construction contracts,
Variation Management is an important principle to consider.
Construction projects frequently have their scope, schedule, or budget
altered due to unanticipated circumstances or design changes. A well-
written construction contract should include provisions for managing
and approving project changes, as well as a clear procedure for
revising the contract's price and timeline as needed. Finally, Conflict
Resolution should be included in every construction contract.
Construction contracts should include provisions for resolving disputes
that may arise during the course of the project. Dispute resolution
methods include negotiation, mediation, arbitration, and litigation. A
clear dispute resolution process can help to resolve disagreements and
maintain a strong working relationship between the parties.