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Project Delivery Options: Pros and Cons

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Project Delivery Options: Pros and Cons Project Delivery Options: Pros and Cons Traditional Design-Bid-Build Pros Cons Design-bid-build’s linear Construction costs are not firmly process is easy for owners to established until design stage is manage and understand completed Owners can actively participate If bids run over budget, redesign, in the design process value engineering, and rebidding Scheduling is straightforward processes can lead to project delays since design and construction and additional design costs phases are sequential, not Architect does not typically receive overlapping benefit of the contractor’s advice on Design-bid-build process constructability and costs during the benefits from the architect’s design phase professional responsibility to Knowledge of some advanced design a quality building and act construction technology offered by on behalf of the owner specialty subcontractors and general Once the contractor makes a contractors is not as readily available cost commitment, it is usually in this approach reliable because it is based on Since most contractors compete on nearly completed design the basis of the lowest bid, any gaps documents or alterations in the design Design and construction roles documents may lead to are separate and well- opportunities for contractors to understood, making both delay construction and/or request responsibility and liability change orders relatively clear This approach’s relatively long Owners have the opportunity to process may be unacceptable for review competitive bids for owners construction costs Since process is linear, any delay in Contractors are familiar with one of the phases usually sets back process and work well under the entire schedule this approach Construction delays may result in Architects are more active in added costs to owner and architect construction administration Adversarial relationships and than in other project delivery potential for litigation can develop methods so design intentions between architect and contractor, are carried through due to their separate contracts with construction the owner Legal Disclaimer: Nothing in this material should be construed as investment, financial, brokerage, or legal advice. Moreover, the facts and circumstances relating to your particular project may result in material changes in the processes, outcomes, and expenses described herein. Consult with your own professional advisors, including your financial advisors, accountants, and attorneys, before attempting to consummate any transaction described in this material. Project Delivery Options: Pros and Cons Design-Build Pros Cons Provides a single point of Not as well understood and can be responsibility for design and more complex (as compared to construction, minimizing owner traditional design-bid-build) risk and responsibility Design, scheduling, and Interactions between GC and construction are interwoven, architect are better coordinated, making it difficult for the owner to which saves time. The owner participate in decision-making provides input at an early stage, Owner may not have the time or and once the design-builder is expertise to prepare adequate bid hired, owner involvement is selection materials, thus decreasing limited the advantages of design-build Related to the above, time- Architect does not directly serve as consuming meetings and the owner’s agent, but is contracted paperwork may be reduced, (or employed) by the design-build since the architect and firm, shifting the architect’s contractor are on the same team allegiance away from owner to the Early cost estimates in this design-builder approach can be advantageous Design-builder’s cost commitment in terms of project budgeting may not be based on full design and and financing documentations since the designer Time delays due to scheduling and builder are working together. problems and change orders may Disagreements with the owner may be reduced since the architect arise over what was implied in the and contractor closely documents, and design changes coordinate activities required by the owner can add costs Potential for conflicts between Deliberations about cost-savings architect and contractor are strategies take place with the eliminated design-build team, which may lead to reductions in building quality without input from, or knowledge of, the owner Legal Disclaimer: Nothing in this material should be construed as investment, financial, brokerage, or legal advice. Moreover, the facts and circumstances relating to your particular project may result in material changes in the processes, outcomes, and expenses described herein. Consult with your own professional advisors, including your financial advisors, accountants, and attorneys, before attempting to consummate any transaction described in this material. Project Delivery Options: Pros and Cons Construction Management Pros Cons Construction Less experienced owners without in- Added levels of coordination and Management house construction capability benefit overlapping areas of authority can Advisor from CM expertise confuse the traditional roles and Given decision-making authority and complicate the traditional processes management responsibility, a CM of design and construction advisor may speed up the process A CM advisor represents an added Architect is accountable to owner cost and protects owner’s interest; A CM advisor may suppress direct architect benefits from CM advisor’s communication between owner, input at design stage architect, and contractor A CM advisor provides second-level Confusion in decision-making process review of construction documents, may contribute to design and/or reduces errors and omissions, construction delays reduces costs related to change Since each of the three prime parties orders and other delays holds a separate contract with the Clearly delineated responsibilities owner, there is the potential for between all parties lessen potential adversarial relationships, increasing for ethical dilemmas or conflicts the likelihood of disputes Legal Disclaimer: Nothing in this material should be construed as investment, financial, brokerage, or legal advice. Moreover, the facts and circumstances relating to your particular project may result in material changes in the processes, outcomes, and expenses described herein. Consult with your own professional advisors, including your financial advisors, accountants, and attorneys, before attempting to consummate any transaction described in this material. Construction Less experienced owners without in- Added levels of coordination and Management house construction capability benefit overlapping areas of authority can Agent from CM expertise confuse the traditional roles and A CM agent’s ability to make fiscal complicate the traditional processes decisions can speed up process and of design and construction reduce duplication A CM agent represents an added cost Additional construction expertise at A CM agent may suppress direct the design phase can be positive for communication between owner, the project (e.g., cost estimating architect, and contractor during design phase allows Confusion in decision-making process monitoring of construction costs at may contribute to design and/or early stage) construction delays A CM agent provides second-level Since each of the three prime parties review of construction documents, holds a separate contract with the reduces errors and omissions, owner, there is the potential for reduces costs related to change adversarial relationships, increasing orders and other delays the likelihood of disputes No link between CM agent and the contractors; thus, contractors can be selected based on competitive bidding Legal Disclaimer: Nothing in this material should be construed as investment, financial, brokerage, or legal advice. Moreover, the facts and circumstances relating to your particular project may result in material changes in the processes, outcomes, and expenses described herein. Consult with your own professional advisors, including your financial advisors, accountants, and attorneys, before attempting to consummate any transaction described in this material. Construction Since the CM contractor makes a Time required to select an additional Management cost commitment early in the professional extends the overall time Contractor project, the owner has a degree of required for the project security about costs A CM contractor represents an added Since CM contractor commits to cost deliver the project for a specified Since the owner does not contract price, it is in their interest to directly with prime or trade complete the construction on time contractors, owner may be unable to Owners with limited construction control quality during construction experience can benefit from CM process contractor’s expertise Since each of the three prime parties Like other approaches, holds a separate contract with the independence of architect and owner, there is the potential for contractor makes responsibility and adversarial relationships, increasing liability relatively clear the likelihood of disputes Scheduling is straightforward When CM contractor is selected by because design and construction low bid, change orders and delays are phases are usually sequential likely, which increases costs Linear process of this approach makes it relatively lengthy Legal Disclaimer: Nothing in this material should be construed as investment, financial, brokerage, or legal advice. Moreover, the facts and circumstances relating to your particular project may result in material changes in the processes, outcomes, and expenses described herein. Consult with your own professional advisors, including your financial advisors, accountants, and attorneys, before attempting to consummate any transaction described in this material. .
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