Project Delivery Methods

1. Project Delivery Methods CM 105 - CONSTRUCTION DOCUMENTS Kevin A. Delorey 11 Feb 2010

2. Most Common Delivery Methods Design / Bid / Build Design-Build Construction Manager Agency (CMa) At Risk (CMAR)

3. 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 EJCDC Owner-specific forms

4. Design - Bid – Build(competitive bidding) Process • Owner hires architect to design project and prepare constructiondocuments • (plans & specs) • Construction documents used for bidding • Owner selects and hires Contractor • Lump sum • Cost plus (with or without GMP)

5. Design - Bid - Build Owner Sub Contractor Consultant Architect GC Sub Contractor Consultant Suppliers Contracts Communication

6. 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

7. 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

8. 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

9. 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

10. Design - Build Contracts Communication Owner Sub Contractor Consultant Design – Builder Sub Contractor Consultant

11. 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

12. 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

13. 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

14. 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

15. 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

16. Construction Management Appropriate for large, complex projects • Used by owners without the time or in-house expertise to oversee the process

17. 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

18. Construction ManagerAt-Risk Owner Sub Contractor Consultant Architect CM At Risk Sub Contractor Consultant Contracts Communication

19. 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

20. 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

21. Construction Management CM as advisor • Acts as advisor to the owner • Architect and Contractor maintain conventional roles

22. Traditional Construction 3 main parties/multiple contracts: • Owner* • Designer • Constructor *Plus CMa if applicable

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

24. 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)

25. Integrated Project Delivery • New Goals for Building Performance • Efficiency • Sustainability • Evidence-Based Design • Certainty of Outcomes • Cost • Quality • Reduction in Claims

26. 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 efficiencythrough all phases of design, fabrication, and construction.“ A Working Definition: Integrated Project Delivery AIA Integrated Project Delivery Task Force (2007)

27. 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)

28. Integrated Project Delivery COLLABORATION JOINTMANAGEMENT SHARED RISK/REWARD

29. Single "tri-party" agreement among: Owner - A/E - CM/GC Creating the Legal Relationship Owner A/E CM/GC

30. 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

31. 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

32. 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

33. Building Information Modeling (BIM)