Build the Right Foundation for Your Future Space by Choosing the Project Process that Fits Your Needs: Explore Three Primary Construction Delivery Methods
What is the best construction delivery method for your building? The answer depends on priorities, ideal outcomes and the client’s desire for involvement in the process. Key factors that might influence a decision to use one option over another include desired time commitment, the level of collaboration a client seeks for the project and project cost.
There are three primary ways to organize the contracting of a construction project. This is by no means an exhaustive list but may help a client better understand their options.
1. Design-Bid-Build
THE TRADITIONAL LOW-BIDDER MODEL
In this approach, the design team works directly for the client to produce a set of construction documents used as the basis of a competitive bidding process. One version of this process is known as "Competitive Bids," wherein prospective contractors (pre-qualified or not) submit bids for the scope of work as defined in the contract documents; in this model, the lowest bidder is typically awarded the project. Another version of this process is known as "Competitive Sealed Proposals," wherein a contractor may submit a proposal that includes both fees and a qualifications presentation. This second option usually results in selecting one of the three lowest bidders, provided their references and qualifications demonstrate they are capable of delivering successful results.
BENEFITS:
This method may result in the lowest total construction cost due to the widest-open field of bidding competition.
CHALLENGES / WHAT TO LOOK OUT FOR:
The general contractor (GC) is selected primarily based on cost. However, the lowest-priced GC is not necessarily the most qualified. Consider qualifications and price during the selection process.
The GC is not on board early in the process to give feedback during the design process to get acquainted with the design team and their intentions and begin establishing trust as a team member.
This model is particularly susceptible to change orders (like cost increases) during the construction process due to the bidders not being available to collaborate with the design team early in the planning process. If change orders become contentious during construction, the design team's documents may be heavily scrutinized for errors and omissions.
Bringing on a GC later in the game may result in the need to hire a professional cost estimator to conduct milestone price checks to manage whether the project remains on target.
The delay in selecting a GC until construction documents are 100% complete typically results in a longer project transition from design to the start of construction.
2. Construction Manager At Risk (CMAR)
CONSTRUCTION MANAGER AS A TEAM MEMBER What if the client teams up with a GC at the beginning of the design process? This model is called Construction Manager at Risk (a.k.a. "CMAR" or "CM@Risk"). Forming the team early may lead to a number of benefits including improved cost feedback during the design process; more time for the GC to thoroughly grasp the scope and details of the project; and increased time for the client, design team and GC to develop a mutual sense of understanding and trust prior to the start of construction. While not all do, some CMAR arrangements may include compensation for the GC’s pre-construction services as well.
BENEFITS:
The client will receive very informed cost estimating at early stages in the project.
This model creates the opportunity for an ideal collaborative team structure.
The GC is chosen primarily based on qualifications, with cost as a secondary consideration.
There is a faster transition from design to the start of construction.
CHALLENGES / WHAT TO LOOK OUT FOR:
To guarantee a competitive bidding process, request multiple bids from subcontractors for all major disciplines or trades.
To ensure transparent accounting of project cost, require an open-book policy from the CMAR so that line items for overhead costs, markups and various contingencies are fully identified.
3. Design/Build
THE TURN-KEY APPROACH A totally different approach to project delivery is chosen by some clients who want a single point of responsibility for the whole construction process. On a Design/Build project, the GC is that single point of responsibility, subcontracting both the various construction trades and the entire scope of design team services. From this position, the GC assumes all responsibility for design outcomes, cost control and staying on schedule.
BENEFITS:
This option requires minimal time commitment from the client throughout the process.
A client’s involvement in any conflicts between GC and the design team is minimal at best.
CHALLENGES / WHAT TO LOOK OUT FOR:
Lower transparency in bidding may result in higher prices than a more competitively-bid project.
The typical system of checks and balances that ensure a quality final product may be disrupted.
The design team may have difficulty advocating for the client and questioning the GC since the design team is answerable directly to the GC, not the client.
The Team Shapes Your Project’s Success
Regardless of the project delivery method a client chooses for a project, it is the client’s responsibility to thoroughly evaluate potential design team members and GC candidates by comparing their qualifications and checking references. Taking time to check references is always worthwhile. It offers valuable insights into the team members under consideration and is an invaluable opportunity to benefit from other clients’ past experiences and lessons learned.
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