Civil Engineering Reference
In-Depth Information
The construction industry is concerned with producing and maintaining a
wide variety of durable buildings and structures, and as a consequence, there are
many construction markets. As Drew and Skitmore (1997: 470) concluded in their
analysis of the competitive markets for construction: 'The construction industry is
highly fragmented, with the dominant firm being the small contractor.' The type
of construction - particularly in terms of its size and complexity, its geographical
location, and the nature of the client - will define the market in each case.
Let us consider in a little more detail what traditionally happens when a new
project begins. Usually a contractor undertakes to organise, move and assemble
the various inputs, and as such provides a service - a service of preparing the site
before work commences, and assembling and managing the process thereafter.
Subsequently, various subcontractors add their services - such as plumbing,
painting, plastering, glazing, roofing, or whatever the specific job requires. As a
result the typical project process can easily become a series of 'separate' operations
undertaken by various parties as set out in
Table 1.2
.
Table 1.2
Parties traditionally supplying a construction project
Parties Involved in Supply
Responsibilities
Provide specialist advice concerning structural,
electrical, mechanical and landscape details.
Identify key specifications.
Architects and Designers
Manages project in detail.
Liaises between the client and the
construction team.
Project Manager
Cost Consultant
Prepares bills of quantities, cost plans, etc.
Main Contractor
Manages work on site.
Subcontractors
Supply specialist skills.
Provide building materials and related
components.
Suppliers
The level of competition for all this work depends upon the complexity of
the construction (which to some extent will be reflected in the cost per square
metre). The idea of complexity is particularly important in construction markets
as it determines the number of businesses interested in competing for the work.
In most cases, firms will not bid for work beyond their local district as the costs
of transporting materials, plant and labour are relatively high. Travelling
is unnecessary when the same type of work is available in the firm's own
neighbourhood or catchment area. If, however, the construction project is very
