As of now, what type of construction project are you working on? This particular question is critical for an entire host of safety, legal and payment-related issues. As a matter of fact, identifying the project type is an integral part of starting a new project. However, this isn’t precisely an open question to answer. In actuality, there are various ways to classify construction projects and every contractor needs to know.
In this blog, let’s take a closer look at how construction projects are classified and why they matter.
Construction Projects by Sector
For many workers in the construction sector, the type of construction project directly refers to the existing facility being constructed. Here are as follows:
- Industrial construction – refers to several energy facilities (solar fields, oil and gas, distilleries, factors and other large-scale production)
- Building construction – includes commercial (warehouses and office buildings) and residential (single and family houses).
- Heavy civil construction – also known as infrastructure construction includes general public works such as bridges, roads, airports, and even sewer systems.
When managing construction projects, there is not much advantage when you classify them this way, mainly because it cannot tell you anything about the construction in actuality. That is why it requires diverse levels of equipment and construction knowledge. It may tell you about the function of the facility. However, there are more other practical ways to classify projects that can help everyone involved to understand further the laws, requirements and possible risks involved.
Construction Projects by Owner Type
One of the essential ways to classify construction projects is probably based on who owns the property or the project. Do you want to know why? It is because that’s what federal and state laws care about in terms of payments, contracts and the number of risks that suppliers and contractors will carry on the project.
The laws are not always concerned with the facility or infrastructure you’re working on. Instead, laws set some requirements based on who initially owns the project. Take a full review of prompt payment laws, bond claim rights and mechanics lien, and other laws so that you will know what affects the contractor’s rights on the job.
In general, a construction project is either public or private. However, it has been broken down into private commercial projects, private residential projects, state construction projects, and federal construction projects.
1. Private Projects
Projects of any type that are directly owned, commissioned, or controlled by private property owners are categorized as private. Private parties commonly include homeowners, corporations, individuals, non-profit associations, business entities, privately funded schools, and even publicly traded companies. In other words, anything that isn’t the government.
It’s construction work being performed to a residential facility with less than three to four units. But if you’re working on the apartment complex, this will most likely fall as a commercial project instead of the residential project. When working on projects like this, it is crucial to deploy subcontractor scheduling software. You’re not only going to manage the project, but also you have to supervise your team. This software solution is your lifesaver.
The construction of any buildings for commercial purposes is called commercial construction. This type of construction includes various projects, including office buildings, sports facilities, skyscrapers, hospitals, private schools, restaurants, etc. Moreover, industrial construction is a generally small segment of the construction industry. While termed as “industrial”, it’s pretty much interchangeable with “commercial construction” because they operate the same category in terms of payment.
2. Public Projects
In broader terms, public projects refer to a project that the government is financing. These projects are generally owned and might be operated by the government. As public projects are typically funded by tax revenue, they are commonly subject to much greater scrutiny. That is why greater transparency is required in the contract award procedures and bidding.
Public projects usually publish their main requirements and even request bids openly. The received bids are automatically considered in a transparent and open way. Additionally, the government can also stipulate standard criteria that a contractor should fulfill to be awarded a public contract.
State Construction projects
Some folks get confused by the term “state” when mentioning state construction projects because the term itself refers to projects commissioned by a city, county, municipality, public school board, and any other state-funded entity. In fact, state construction projects can take on various forms. The state construction primarily means, hence, any government-funded construction that isn’t federal.
Moreover, projects like this can be somehow traditional and pretty sophisticated, depending on what they are intended for.
Federal Construction Projects
Federal construction projects are quite similar to state projects. And just like the latter, they can also take various forms – simple, traditional and very complex. And the ones being constructed can be the same by the state authority – government buildings, courthouses, flood control projects, etc.
The main difference between federal and state projects primarily depends on who controls and owns the underlying project site. Also, the difference isn’t which entity funds the project, instead who owns and manipulates the project itself.
The above categories are commonly determined by whoever owns the property where a construction project is currently taking place. It is crucial because the property owner himself will decide what type of payment security contractors and suppliers have on the job.
Construction Project by Building Occupancy
Your construction projects can be determined by their occupancy. It refers both to their actual use as well as the number of people permissible to occupy the facility. And while local jurisdictions set their building codes, they have chosen to adopt a standard set of acceptable regulations. In the U.S., the most common is the International Building Code (IBC) that has ten broad classifications for all buildings.
- Assembly – these are facilities where people get together in larger groups. It includes restaurants, stadiums, and theaters.
- Business – these are facilities where commercial services are provided.
- Educational – these are facilities established for youth education.
- High-hazard – these are facilities for storing and producing toxic/flammable materials like explosives, fireworks, combustible liquids, etc.
- Factory – these are facilities designed for assembly, manufacture, fabrication and repair of goods.
- Mercantile – these are facilities for display or retail of goods.
- Institutional – these facilities are where occupants are detained or required to have physical assistance.
- Residential – these are facilities designed for overnight stay.
- · Storage – these are facilities where harmless items are being stored.
- Utility and miscellaneous – facilities designed for other uses not listed or included in the mentioned categories. It can include water towers, carports, barns, sheds, greenhouses, etc.
Occupancy is very important for contractors, architects, and property owners in building codes and zoning. Failure to comply with code and zoning requirements causes you some problems during the building inspection. As a result, it pushes back project closeout, causing a breach of contract and payment delays. It is crucial to get hold of all details and requirements using the best project management software to not fail in complying. Expect that your project management for construction will level up!
So Why Owner Type Matters?
Why is it important to know who initially owns the project? There are many differences, and these are essential since the laws governing your construction project are mainly different depending on the owner. First and foremost, the type of payment security available to contractors and suppliers is different in every project. On private projects, whether commercial or residential, any unpaid construction businesses are given the right to file a mechanics lien.
However, on public projects, the state or federal government that owns it won’t allow contractors to lien property. In fact, the Miller Act generally requires contractors to put up a payment bond in order to provide payment security to those working on it. If they are unpaid, then they can make a bond claim in order to recover the money.
Payment laws aren’t the only laws that are pretty different. In fact, contracting rules and labor laws are also different and the difference usually depends on your project type and other underlying factors.
Know Your Project Type and Invest in Construction Scheduling Software
The type of construction project you are dealing with determines the type of materials, type of contract, and specifications required. Suppose any of your construction crew fails to follow certain safety requirements and codes. In that case, it may cause the building inspector to issue a rejection or correction, leading to delays the payment and drags out the project completion.
Once again, no matter what type of project you’re handling, it is crucial to know who the project owner and, whether the project is private or public. Investing also in specialized software can make a huge difference especially now that you’re having all sorts of construction projects. Technology has been progressing and advancing at an aggressive pace and the construction sector is among the industries that are greatly influenced by it.
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