Lump-sum competitive bidding is the project delivery method with which most owners are familiar. The owner hires an architect who completes the plans and specifications, and advertises for bids. Contractors bid the project exactly as designed, a construction contract is awarded to the lowest bidder, and construction starts. That’s assuming the low bid is within the owner’s budget. If not, the entire process is repeated. But even with a reduced work scope, there’s no assurance the rebid will be in budget.
The biggest drawback with lump-sum competitive bidding is that it excludes from all pre-construction activities – planning, design, bidding – the professional who knows the most about cost and schedule, construction methods, and bidding – the contractor.
With no one on board to assist with defining objectives and weighing options, bad choices are made which effect quality, cost and schedule. With no one on board to assist with detailed estimating, value engineering, life-cycle costing, and reviewing the content of the drawings, cost and construction problems get designed into the project. And with no one on board to assist with bidding the work, and negotiating and awarding trade contracts, money is left on the table.
For the owner who is willing to embrace the team approach and engage a qualified and knowledgeable contractor early in the building process, there exist very real opportunities to significantly increase value, lower costs and shorten schedules. In today’s economy, could that be more important?
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