Understanding Your Project Delivery Options


Construction contract

Deciding on your future project’s delivery method can potentially be a daunting task. Please rememver that we are here to help you in any way we can. If there is an area you would benefit form hearing more about, don’t hesitate to call our office or email our staff.

That being said, there are several options for project delivery: Design/Build, CMR, and Design-Bid-Build (Select List or Open Bidding). Within each of these methods, different elements can weigh in the selection of a contractor. We’ve listed below the parameters for each method and also some potential pros and cons:

 

Project Delivery Systems:

Design/Build

Parameters: Single contract for Design & Construction; Design/Builder selected based on Qualifications & Fee Proposal; Budget defined at initial programming stages and checked at each stage of design; Guaranteed Maximum Price (GMP) amount established at design completion; Design/Builder hires subcontractors directly and assumes risk for their contract amounts; Project savings may return to Owner or be shared.

Pros: Budget controlled throughout process; Best method to get highest quality for given budget; Shorter overall Duration; Cost of design errors or omissions born by the Design/Builder.

Cons: Single source input past selection; Trust & Confidence in Design-Builder is critical to moving project forward; Not always lowest cost option.

 

Construction Manager–at–Risk (CMR) also known as CM/GC

Parameters: Separate contracts for Design & Construction; Designer & Contractor selected based on Qualifications & Fee Proposal; Budget defined at initial programming stages and checked at each stage of design; Guaranteed Maximum Price (GMP) amount established at design completion; CMR hires subcontractors directly and assumes risk for their contract amounts; Project savings may return to Owner or be shared

Pros: Budget controlled throughout process; Good method to get highest quality for given budget; Shorter overall duration.

Cons: Single source input past selection; Relationship between Designer and CM-at-Risk is critical to moving project forward; Not always lowest cost option; Cost of design errors or omissions born by the Owner.

 

Design-Bid-Build (Select List)

Parameters: Separate contracts for Design & Construction; Select List of General Contractors (GC) selected to bid based on Qualifications; GC selected based on Bid provided after design completion; Budget defined at initial programming stages but final cost not known until bids are received; GC hires subs directly and assumes risk for their contract amounts; Project savings go to GC.

Pros: GC Qualified; Multiple Cost inputs; Lower initial cost.

Cons: Final cost unknown until after design is complete; Can require Value Engineering to get project to budget; Cost of design errors or omissions born by the Owner as Change Orders; Schedule can be longer if budget is not met; Additional design costs may be required; Contract is adversarial.

 

Design-Bid-Build (Open/Public Bidding)

Parameters: Separate contracts for Design & Construction; Any GC can bid; GC selected based on Low Bid provided after design completion; Budget may or may not be defined at initial programming stages but final cost not known until bids are received; GC hires subs directly and assumes risk for their contract amounts; Project savings go to GC.

Pros: Multiple Cost inputs; Lowest initial cost.

Cons: GC may be unqualified; Bonds may be required to secure their performance; Final cost unknown until after design is complete; Can require Value Engineering to get project to budget; Cost of design errors or omissions born by the Owner as Change Orders; Schedule can be longer if budget is not met; Additional design costs may be required; Contract is adversarial.

 

What experiences have you had with any of these methods? Do you have a preference?

Leave a comment

Your email address will not be published. Required fields are marked *