Transcript What Small and Emerging Contractors Need to

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A project delivery method describes the
process of how a project will be designed and
constructed.
A project delivery method can be
characterized in various ways, one of which is
the contractual arrangement(s) of the main
project participants.
This presentation focuses on an overview of
the four common project delivery methods,
with typical characteristics of each one.
The contractual arrangement for each delivery
method will be illustrated.
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Design-Bid-Build (DBB)
Design-Build (D-B)
Construction Management at-Risk (CMAR)
Integrated Project Delivery (IPD)
While these four are the most common, there are
other project delivery methods and hybrids of
these delivery methods, with characteristics of
more than one method.
There is no one “best” delivery method; there are
advantages and disadvantages in using each
method.
Experience and expertise allows selection of the
right delivery method for a particular project.
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Design-bid-build, known as the traditional
method, is a project delivery method in which
the owner contracts with separate entities for
the design and the construction of a project.
Two contracts are used to accomplish design
and construction: the owner-designer
contract and the owner-contractor contract.
There are three sequential project phases to
the design-bid-build method:
– Design phase
– Bidding phase
– Construction phase
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The owner hires a design professional to prepare
the design and contract documents (plans and
specifications).
Then these documents are used for competitive
bidding or negotiation with contractors.
The owner executes a contract with the winning
contractor, who is in charge of delivery of the
completed contract.
The contractor may subcontract some of the work
to subcontractors.
The contractor is responsible for the execution of
the work under the contract.
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Owner
Designer
Contractor
Subcontractor
Subcontractor
Subcontractor
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Design-build (D-B) is a project delivery method in
which the agency or owner contracts with a single
entity, known as the design-build entity, to
complete both the design and construction
services.
A single contract, between the owner and the
design-build entity, is used to accomplish design
and construction.
Design-build relies on a single point of
responsibility and is used to minimize risks for
the project owner and to reduce the delivery
schedule by overlapping the design phase and the
construction phase of a project.
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The firm will often be a design-build firm or a
joint venture of a design firm and a
construction firm for a specific project.
The design–build firm hires the
subcontractors.
The D-B method enables fast-track delivery,
in which construction can begin before design
is completed.
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Owner
Design-Build Entity
Subcontractor
Subcontractor
Subcontractor
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Construction management at-risk (CMAR) is a project
delivery method in which the construction manager
(CM at-Risk) agrees to deliver the project within a
defined schedule and price, either fixed or a
guaranteed maximum price (GMP).
The CM at-Risk acts as consultant to the owner in the
development and design phases and as a general
contractor during the construction phase.
The CM at-Risk assumes all liability as the contractor.
In addition to acting in the owner’s interest, the CM
at-Risk must manage and control construction costs
to not exceed the GMP, which would be financially
detrimental to the CMAR company.
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The construction management at-risk method
should be differentiated from the construction
management-agency (CMa) method of project
delivery.
CMAR and CMa are often confused, but they are
distinct delivery methods.
CMa is characterized by a construction manager
who is a true agent of the owner and acts on the
owner’s behalf in the administration of the
project.
The construction manager-agent has no
responsibility for the construction outcome of
the project, as does the CM at-Risk.
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Designer
Owner
Construction
Manager at
Risk
Subcontractor
Subcontractor
Subcontractor
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Integrated project delivery (IPD) is a project delivery
method that fully integrates the project participants into a
collaborative process that takes advantage of the
knowledge and skills of all the participants to maximize
the project results.
A multi-party contract is signed by, at a minimum, the
owner, the design professional, and the contractor.
The key participants are involved from an early stage of
design, with collaborative decision-making, to facilitate
communication and increase profits.
The project is jointly managed by the project team.
IPD involves an alignment of interests of all the principle
parties; risks and rewards are shared based on the project
outcome.
This delivery method is less common than the others and
is most often used by experienced and sophisticated
parties in the design and construction processes.
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Owner
Designer
Contractor
Consultants
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