Also called “hard bid”, this is the oldest contract approach in the book and, therefore, comes with some old school opportunities and pitfalls. In this method, the owner hires an architect who prepares the plans and specifications without contractor input. The project is bid competitively among several general contractors, exactly as designed, and a contract is awarded to the lowest bidder. If the project is over budget, the entire process is repeated with a reduced scope, but with no guarantee that the rebid will be in budget. While simple to administer, lump-sum general contracting ensures neither lowest price nor best value.
Utilizing the team approach, construction management introduces a construction professional—the construction manager (CM)—who is engaged early in the project to represent the best interests of the owner throughout the building process. The CM operates as an extension of the owner’s staff and works alongside the design and other consultants to ensure the developing plans are reviewed for cost, content and constructability.
Because construction management is a service rather than a product, a public entity can choose a construction manager on the basis of qualifications and reputation rather than price alone; and because all trade contractors bid directly to and contract directly with the owner, construction management is in full compliance with public bidding laws. This is a good approach if the client wants integrated advice from design and construction experts.
A public entity can pursue a CMAR approach, in which the CM holds all trade contracts and is responsible for cost and schedule. In the private sector, this would be achieved with a preconstruction consulting agreement paired with a Guaranteed Maximum Price (GMP) contract. This approach is a fantastic way to manage the overall project risk with professional advice at every step of the way, leading into a contract management approach that passes the overall cost and schedule risk to your construction partner.
With design/build, one firm assumes responsibility to the owner for both design and construction of the project. Incorporating the two functions into one contract produces efficiencies which tend to reduce costs, shorten schedules, and improve overall project value. And with only one contract, the owner has a single source of responsibility. Design/build is the “one-stop-shop” of the project delivery methods. This is a great fit for owners that have a strong relationship or value alignment with a developer/builder or contractor.
Integrated Project Delivery (IPD) represents a return to the old “master builder” concept. With IPD the entire building team including the owner, architect, general contractor, building engineers, fabricators, and subcontractors work under one contract as a single entity throughout design, fabrication, and construction.
The objectives of IPD are to increase productivity, reduce waste (waste being resources spent on activities that do not add value to the end product), avoid cost and time overruns, enhance quality, and reduce conflicts between team members
IPD can produce exceptional results IF all team members are fully engaged in and committed to the process. Finding committed partners can be the most challenging part of IPD.