Project Delivery Methods

CM 105 - CONSTRUCTION DOCUMENTSKevin A. Delorey

11 Feb 2010

Most Common Delivery Methods

• Design / Bid / Build• Design-Build• Construction Manager

– Agency (CMa)– At Risk (CMAR)

• Each method has its pros and cons

• Each is the subject of well-developed contract forms incorporating years

of experience, jurisprudence, etc.

• Forms (various "families"):AIA

AGC (now ConsensusDocs)DBIA EJCDCOwner-specific forms

Design - Bid – Build(competitive bidding)

Process

• Owner hires architect to design project and prepare construction documents

– (plans & specs)

• Construction documents used for bidding

• Owner selects and hires Contractor – Lump sum– Cost plus (with or without GMP)

Design - Bid - Build

Owner

Architect GC

Consultant

ConsultantSub

Contractor

Sub Contractor

Contracts

Communication

Suppliers

Design - Bid - Build

Most Common Form of Project Delivery

• Three phases, three prime players

• Independent contracts between architect/owner and contractor/owner

• Linear sequence of work

• Common with public owners with requirements to select low bid

Design - Bid - Build

Advantages

• Common and familiar• Linear process• Design complete prior to construction

– i.e., fully-defined scope

• Clear roles assigned to each party• Competition leads to lowest price• Both design and construction teams

accountable to Owner

Design - Bid - Build

Disadvantages

• Relatively lengthy process – longer schedule• Price not known until bids received – may lead to

redesign and rebidding if budget exceeded• Lowest price ("first cost") does not necessarily

produce lowest final cost or best quality• Change orders and delay claims are more likely• No design phase input from Contractor

Design - Build Process

• One entity hired by Owner to complete design and construction

• May all be Contractor's in-house design expertise or Contractor may engage outside Architect

• Early cost commitment is made (GMP) by Contractor based upon preliminary design

Design - Build

Contracts

Communication

Owner

Design –Builder

Consultant

Consultant

Sub Contractor

Sub Contractor

Design - Build

Owner Contracts with a single entity

• Contractors more commonly head the team

• Single point of responsibility

• Not legal in all states for public projects – where lowest competitive bid is required

Design - Build

Advantages• Single point of accountability for design and

construction• Selection flexibility – qualifications based• Team Concept – contractor assists with

planning and budget during design phase• Enables fast-track delivery— construction

begins before design is complete• Early GMP reduces Owner concern with cost

overruns

Design - Build

Disadvantages

• Architect is not under separate contract w/Owner. Who is watching out for Owner?

• Owner selects a team rather than the best architect and best builder

• Design is completed after GMP is given, making change more difficult and costly

• Potential for compromises in quality to meet budget

• Faster schedule can produce more errors

Design - Build

D – B as Developer• Also known as turn-key or build to suit

• DB entity maintains and operates building

to ensure all systems

• DB entity takes on responsibility for real estate development

• Characterized by legal transfer of title to real property•

Construction Management Process (General)

• CM is hired by owner

• Architect is hired for construction documents

• CM oversees (or assists with) design

(cost, schedule and constructability)

• Construction documents are used to bid or negotiate the work

• Contractor is selected

• CM is on board through construction

Construction Management

Appropriate for large, complex projects

• Used by owners without

the time or in-house expertise

to oversee the process

Construction Management

CM as constructor

• Also known as CM At Risk (CMAR)

• Acts as project coordinator and general contractor

• Includes early cost commitment

• CM assumes all liability as the contractor

Construction ManagerAt-Risk

Owner

Architect CM At Risk

Consultant

ConsultantSub

Contractor

Sub Contractor

Contracts

Communication

Construction Management

CM At Risk Advantages• Team Concept• CM firm selected by interview based on quality rather than

low cost (RFQ selection process)• Hired pre-design allows design assist and

CM involvement in estimating and constructability

• Competitive pricing for subcontractor work (and self-performed if Owner requires)

• Single point of accountability: CM At Risk signs contracts with all subcontractors

• Guaranteed maximum price• Enables fast-track delivery – time savings• Good for large complex projects and multi-phase projects

that are time critical

Construction Management

CM At Risk Disadvantages

• Difficult for Owner to evaluate validity of GMP and value of contract

• Typically less competition in bidding (especially for self-performed work)

• Additional pre-construction fees and CM fee may increase "first cost" (but may result in lower final cost)

• Not legal for public projects in many states

Construction Management

CM as advisor

• Acts as advisor to the owner• Architect and Contractor maintain

conventional roles

•

Traditional Construction

3 main parties/multiple contracts:

» Owner*

» Designer

» Constructor

*Plus CMa if applicable

Complaints include

• Errors and omissions in design• Inefficiencies • Defects in construction• Coordination problems• Delays• Cost overruns• Adversarial/fault-based relationships

Reasons include

• Multiplicity of parties with conflicting interests and motivations

• Incompatible cultures• Poor communication and limited access

to necessary info (silos) - (leading to numerous RFI's)

Integrated Project Delivery

New Goals for Building Performance- Efficiency

- Sustainability- Evidence-Based Design

Certainty of Outcomes- Cost

- Quality- Reduction in Claims

IPD Definitions

"IPD is a project delivery approach that

integrates people, systems, business structures and

practices into a process that collaboratively harnesses

the talents and insights of all participants to optimize

project results, increase value to the owner, reduce

waste, and maximize efficiency through all phases of

design, fabrication, and construction.“

A Working Definition: Integrated Project Delivery AIA Integrated Project Delivery Task Force

(2007)

IPD Definitions

Projects where:

The key participants are involved from an early stage of design;

The project is jointly managed by the project team; and

Risk and reward are shared based upon project outcome.

Howard Ashcraft, Hanson Bridgett, LLP, San Francisco (2009)

Integrated Project Delivery

COLLABORATION

SHARED RISK/REWARD

JOINTMANAGEMENT

Creating the Legal Relationship

Single "tri-party" agreement among:

Owner - A/E - CM/GC

Owner

A/E CM/GC

IPD Principles▪ Early involvement of key participants

▪ Mutual respect and trust▪ Transparency▪ Advanced technology (BIM)▪ Early goal definition▪ Intensified planning

▪ Collaborative decision-making

▪ Shared risks & rewards

Benefits of IPD Increased productivity–

Less time lost waiting for documentation Shop drawings can be included in construction model

Better coordination of documents Fewer RFI’s and conflicts

More informed decision making Better project cost control –

Improved budget management

Higher predictability of outcomes Greater understanding and control over the construction process

Building Information Modeling (BIM)

• Process of generating and managing building data during its life cycle

• Uses three-dimensional, real-time, dynamic building modeling software that increases productivity in building design, construction and operations

• Creates a model that encompasses building geometry, spatial relationships, geographic information, and quantities and properties of building components.

Wikipedia

Building Information Modeling (BIM)