Construction delivery methods refer to the way in which a construction project is organized and managed. There are several different delivery methods that can be used, and each delivery method has its own advantages and disadvantages, and the best method for a particular project will depend on the specific needs and goals of the client. Whether your project is $500,000 or $300 million, we can tailor our approach to fit your project’s needs and work with you to find the best approach within your budget.
Construction management at risk is a type of project delivery method in which a construction manager is hired to provide pre-construction services and assume the risk of delivering a project within a guaranteed maximum price (GMP).
In this arrangement, the construction manager works with the owner to develop the project’s design and budget, and then provides a GMP to the owner. The construction manager is then responsible for delivering the project within the agreed upon GMP, and assumes the risk for any cost overruns. This delivery method allows the owner to have a greater degree of control over the project’s budget and schedule, and it also allows the construction manager to get involved in the project at an early stage and provide value-added services.
Pros
Collaborative effort from project inception
Open book competitive pricing
Early project involvement guarantees constructability input
Involves value analysis during design
Improved time of delivery
Well defined scope not required to establish contract
Owner retains control of Design
CM & A/E work as a team in Owner’s interests to establish project scope
CM assists during design process with budgeting and schedule
Non-adversarial effort reduces risks for Owner
CM takes on risk of trade contracts
Qualification based selection
Owner benefits from cost savings
CONS
GMP not established until design is complete, or when mutually agreed upon
There is a delicate balance between establishing the proper amount of contingency while establishing the GMP.
The more risk that is injected into the CM’s GMP results in higher soft cost/contingencies which can impact the amount of scope programmed into the project.
Construction management agency is a type of project delivery method in which a construction manager is hired by the owner to provide construction management services on a fee basis.
In this arrangement, the construction manager acts as the owner’s agent and is responsible for overseeing the construction process, including the selection of subcontractors, procurement of materials, and management of the construction budget and schedule. The construction manager is typically not responsible for providing any design services or assuming any risk for cost overruns. This delivery method is often used when the owner has already engaged an architect or engineer to design the project and is looking for someone to manage the construction process.
Pros
Bond Cost Savings
Selected collaborative team from project inception
Open book competitive pricing from specialty subcontractors
Breaks projects into smaller bid packages allowing for more local participation
Involves value analysis during design
Improved time of delivery
CMa manages change order pricing
Well defined scope not required to establish contract
Owner retains control of Design
CM & A/E work as a team in Owner’s interests to establish project scope
CM assists during design process with budgeting and schedule
Non-adversarial effort reduces risks for Owner
Qualification based selection
Owner benefits from cost savings
CONS
There is no GMP
Design must be complete prior to construction starting
CMa is not at risk, and has no contractual relationship, with subcontractors
Increased potential for change orders due to multiple prime contracts
Owner accounts for multiple prime subcontractor payments
Potentially complex management of warranty services
General contracting is a type of project delivery method in which a general contractor is hired by the owner to oversee the construction of a project. In this delivery method, the general contractor is usually the one who assumes the most risk for any cost overruns or delays.
PROS
Simple decision process
Competitive pricing through GC Bids
Clarity of Scope of Work
CONS
Your biggest Risk is not in a contractual relationship that acts as your advocate
Lack of cost control & value analysis during design
It is a fallacy that this is the lowest cost delivery method.
In a design-build construction delivery method, a single entity (the design-build team) is responsible for both the design and construction of a project.
PROS
Single point of contract responsibility (Design Builder)
Lump sum cost identified up-front
Design and Construction can overlap for fast delivery
CONS
A well-defined scope of work is required up-front to establish contract – Bridging Documents
Owner responsible for changes due to gaps in desired scope versus bridging documents.
Owner potentially loses some control in design.
Can be difficult to implement for complicated design.
Integrated project delivery (IPD) is a construction delivery method that involves a collaborative approach to the design, construction, and operation of a project.
PROS
TRUE collaborative TEAM
Create the best outcome
Eliminate waste in project design
Establish the correct point of contact for each project task
Improve job productivity
Increase project value
Improve construction methods
Establish innovative tactics for approaching field work
Create cost savings through change order reductions
Produce innovative ways to reach goals
Improve production techniques that will in turn improve the client’s bottom line project costs
CONS
Requires TEAM members that buy into the idea (project first, not me first mentality)
Heavy pre-construction effort
Major owner involvement during pre-construction and construction phases
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