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Project delivery is a comprehensive process involving planning, designing, construction as well as other services which are essential for the organization, execution and completion of a construction project.

Before embarking on a residential project, for instance, the homeowner must make highly fundamental decisions regarding:

  • the project delivery method to use;
  • the procurement method to employ; and
  • what the contract will be like.

The three parties involved in the planning, execution and delivery of a building project are:

  • Homeowner;
  • Architect (designer); and
  • A builder.

Homeowners must understand the impact of the choice of delivery methods available as the delivery method influences:

  • the choices of contractual relationships; and
  • ownership and impact of changes and modification of project costs.

Hence, it is important to choose a delivery method that best meets the unique needs and specifications of each owner and their project. Project considerations have fundamental impacts on the delivery method selected. These considerations include:

  • a realistic budget;
  • a schedule that includes a reasonable performance period;
  • a responsive and quality design process;
  • a risk assessment with allocation of risks to the appropriate parties; and
  • a recognition of the level of expertise within the owner’s organization.

Analysis of Existing Delivery Methods

The common project delivery methods that homeowners can choose from include:

  • Design-Bid-Build (DBB)
  • Design-Build (DB)
  • Construction Management-at-Risk (CMAR)
  • Construction Management Multi-Prime (CMMP)

Design-Bid-Build

This is the traditional and most popular project delivery method. It is usually the lowest price upfront. The designer/architect and general contractor work directly for the owner, so this method provides opportunities for owner-input on the project. With a design-bid-build project, there’s a clear divide in which parties design the project and which ones actually do the building.Characteristics

  • It has two contracts (for architect and contractor);
  • It is best understood; and
  • Has linear sequence of work (longest delivery).

Advantages

  • The homeowner retains control of design;
  • Procurement laws are well defined; and
  • It has low first cost (Bidding).

Disadvantages

  • The final cost changes and the owner is responsible for this.
  • It is the most litigious.
  • Contractor has no input to project.

Construction Management-at-Risk

With this method, a construction manager acts like the owner’s consultant during the design phase. Similarly to the DBB method, the CMAR method separates the design and building processes. The construction manager also oversees construction much like a general contractor would, and accepts the risk for meeting the deadline and the cost requirements. The owner provides a set maximum payment – aka a cap on pricing – in return.Characteristics

  • As in Design-Bid-Build, it also has two contracts (architect and contractor).
  • CM is selected on qualifications and fees.
  • Some construction risks are transferred to GC.
  • Similar to CM Multi-Prime for selection and management of the work
  • Open book on costs (subcontractor and supplier payments) and procurement process.
  • Flexibility to price the project
  • Subcontracts are re-assigned to the CM.
  • Bonding can be for the entire scope of the work (GC and subcontractors).
  • Risks can push the CM not to act as the agent of the owner.

Disadvantages

  • The owner is responsible for changes;
  • The owner’s qualification-based selection of CM; and
  • The architect may not take input from CM during design.

Design-Build

This is one of the fastest-growing project delivery methods today. The owner hires a company or team under one contract to deliver the construction project from start to finish, including both architectural/engineering design services and construction. Since the same team is responsible for the design and construction phases, design-build helps reduce pricing changes throughout the project; changes are usually isolated to situations where unknown conditions or owner requests require cost increases.Characteristics

  • It has integrated process: overlapped design and construction – typically fast tracked.
  • There are two prime players: owner and design-build entity.
  • There is only one contract – owner to design-builder with single point of responsibility.
  • Entity can take on many forms including: Integrated design-build firm; Contractor led; Designer led; Joint venture; or Developer led.
  • The design-builder is responsible to design and construct the project to meet the performance standards set forth by the owner in the contract.
  • With respect to any prescriptive designs or specifications, the design-builder is responsible for discovering any inconsistency between the prescriptive requirements and the performance standards and the owner remains responsible for the cost to reconcile the inconsistent standards.

Construction Management Multi-Prime

In this method, the project is divided into three stages of development – design, engineering, and construction. When carrying out an MP project delivery, the owner composes separate contracts with those in charge of the separate stages. In this design delivery method, the main contractors are the “primes.” For example, the owner will establish contractual agreements with the GC and contractors of other trades (ex: electricians, plumbers, carpenter). The trade supervisors may oversee the work of the contractor, such as a GC of electricians.Characteristics

  • There are many contracts (Architect, Contractor, Subcontractors);
  • The design is linear; and
  • CM is selected on qualifications.

Advantages

  • Retain control of design
  • Contractor involved early
  • Combine fast track and lowest bids

Disadvantages

  • The owner is responsible for changes, overlaps and gaps in scope;
  • There is lack of subcontractor involvement; and
  • There is exposure to CM’s lack of proper oversight.

Conclusion

There are other project delivery methods which are not as common as the ones analyzed above. Every homeowner needs to study each method with its characteristics, advantages and disadvantages in order to choose the one that best suits their needs.

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