Determine Project Delivery Method - it is important to determine the Project Delivery Method as early as possible in the project and prior to issuing RFP’s to architects and consultants. The construction delivery method will impact the strategic approach and bid proposals of the architect and design consultants.
KWDA will assist the owner in determining the best delivery method for their project. One size does not fit all; specific projects require specific delivery methods and specific consultants and contractors. Each project is unique and therefore must be delivered considering the project specific goals and parameters. There are many methods to deliver a project, the following three types are predominately used currently.
Competitive Bid - Design, Bid, Build (D/B/B)
This is a linear process where one task follows the completion of another. The architect completes plans and specifications and then bids are issued. Contractors bid the project exactly as it is designed with the lowest responsible, responsive bidder are awarded the work. The design consultant team is selected separately and reports directly to the owner.
- Familiar delivery method
- Simpler process to manage
- Fully defined project scope for both design and construction
- Both design team and contractor accountable to owner
- Lowers price proposed and accepted
BEST suited for less complicated projects that are budget sensitive, but are not schedule sensitive and not subject to change. Owner completely controls the design
- Linear process means longer schedule duration than other methods
- Price will not be established until bids are received and may require redesign and rebid if bids exceed the budget
- Quality of contractors and subcontractors may be in question unless prequalified subcontractor lists are used
- Fosters adversarial relationship between all parties increasing the probability of disputes
- No design phase input form the contractors on cost and schedule
- Not optimal for project that are sequential, schedule or change sensitive
- Change orders and claims may increase final project cost
Guaranteed Maximum Price – GC at Risk
This method allows the owner to interview and select a General Contractor (GC) based upon a competitively bid General Conditions and Fee basis. Qualifications and experience will also be considered in awarding the contract. This allows the GC to participate in the development of the project during the design process and offer feedback on cost, schedule and constructability. Ultimately, GC will provide a Guaranteed Maximum Price (GMP) at a mutually agreed to time. The percentage of contingency in the GMP will be directly related to the level of completion of the Construction Documents. Meaning, if the GC provides a GMP at the end of Design Development the contingency will be higher than if the GC provides a GMP at the completion of the Construction Docuements. Unused contingency will be unbilled and revert to the Owner. Certain projects may be structured with shared savings clauses allowing a predetermined percentage of the savings to be paid to the CM/GC at the end of the project.
- Selection of contractor based upon qualifications, experience and team
- Contractor provides design phase assistance in budgeting, planning and schedule
- Continual budget control
- Screening of subcontractors allows owner and contractor quality pool of bidders
Faster schedule than traditional bid; fast track construction possible
- Ability to obtain GMP earlier in process – earlier than D/B/B or D/B
- Allows team approach between designer and builder
- Allows better management of changes during design and construction
- Reduces likelihood of claims
BEST suited for large renovations or new projects that are design and schedule sensitive, multi-phased or technically oriented requiring multi-disciplinary coordination.
- May be difficult for the Owner to evaluate the GMP or determine whether the best price has been achieved for the work – this is surmountable by being involved with the GC during the subcontractor bidding and buyout process
- Cost may increase due to details not in GMP – again surmountable with competent Project Management
Design Build (D/B)
Contractor and architect are one entity hired by the owner to deliver a complete project. A stipulated sum or GMP is provided by the D/B team early in the project based upon design criteria prepared by the owner. The D/B team then develops the drawings while maintaining the budget. The contractor then receives proposals from and awards the subcontracts.
- Single point of responsibility for design and construction
- Selection of contractor based upon qualification, experience and team
- Contractor provides design phase assistance in budget an planning
- Faster project delivery than traditional bid’ fast track optional
- Guaranteed price possible early in process
- Price tend to mach quality (can be disadvantage)
- No change orders written for consultant errors and omissions
BEST suited for new construction project that are highly time sensitive, project with smaller user groups or reduced need for user reviews and design changes.
- No check and balance created between contractor and architect,
- Difficult for owner to determine whether the best price has been achieved
- Initial costs likely higher than D/B/B or GC at Risk due to increased contractor risk factor
- Changes difficult and expensive to make after construction commences
- Owner must have clear idea of scope and concept
- Increased speed and fewer reviews increase potential for mistakes and missed item.
- Staff and users required to make quick decisions and have reduced time for reviews and input