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Understanding Project Delivery for the Design and Construction of Public Buildings

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Understanding Project Delivery for the Design and Construction of Public Buildings Understanding Project Delivery for the Design and Construction of Public Buildings he programming, design Identifying the optimum delivery method and construction of for public projects depends on how public important public buildings institutions value their own input; project require the coordinated cost and schedule; overall project quality; efforts of a large number short-and long-term goals; and the Tof professionals and organizations. accountability of the project participants. Critical to the successful delivery of a complex building project is effectively Contractual Relationship guiding these diverse parties into a Agent-Vendor productive and responsive force that When evaluating the opportunities and represents the interests of public agen- constraints of each delivery method, it’s cies, institutions and taxpayers. Five important to identify how a project bene- primary project delivery systems have fits from an agent-contractual relationship evolved to organize the design and or from a vendor-contractual relationship. construction work: Agents, by definition, act in the owner’s 1. Design-Bid-Build interest, providing professional services 2. Construction Management–Agent for compensation. They typically have 3. Construction Management– special expertise and are expected to Contractor or Construction adhere to a professional standard of Manager at Risk performance - that is, to exercise reason- 4. Design-Build able care in their services. In selecting 5. Contractor Pre-Selection an agent, the owner normally considers qualifications, experience and integrity as The first two delivery systems utilize an most important. Architects, engineers and open, competitive bidding process and construction managers put their profes- are therefore generally available for sional expertise to work on behalf of public sector projects under current law. their clients. As agents, they take respon- Design-Build, Construction Manager- sibility for overseeing that the owner’s Contractor and Contractor Pre-Selection needs and intentions are fully identified, do not include competitive bidding and defined and accommodated. therefore require special legislation. Each of these systems has a unique decision-making structure with distinct architecture advantages and disadvantages. Opportunities and Constraints of Project Delivery Methods Vendors, by definition, supply a specified contractor builds according to the plans 4. Design and construction roles are product for a fixed price. Vendors are and specifications, and that the owner clearly defined, and responsibilities expected to adhere to a standard of meets financial and other obligations to and liabilities clear. performance established in the construc- the contractor. 5. Owner is an active participant in tion documents. When selecting a design process. vendor, the owner usually considers the Design-Bid-Build is an effective project- cost of the product being supplied, its delivery system that, for many years, has Disadvantages of Design-Bid-Build delivery, warranty and, only in cases of helped public owners achieve quality in 1. Design-Bid-Build construction phases disqualification, the experience and repu- the design and construction of public are sequential and may require tation of the vendor. A contractor who projects. The architect is typically selected more time. is constructing a building for a specific at the onset of the project based on qualifi- 2. Owner is at risk for final construction price determined through an open cations and experience, and represents the cost. Actual construction costs are bidding process is acting as a vendor. owner’s interests during both design and not known until design and bidding If specifications are met and drawings construction, delivering professional are complete. adhered to, the contract is satisfied. service as the owner’s “agent”. The building contractor that is successful in Construction Management Design-Bid-Build bidding will then contract with the owner Some owners or public agencies planning In this traditional method of project as a “vendor” to construct the specified construction of complex projects may not delivery, a design team of architects and design for the lowest responsible price. have resources in-house to manage plan- engineers is hired to work with an owner ning, design and construction of a major to develop plans for a building to fit Advantages of Design-Bid-Build building project. To support this need, the goals, budget and aspirations of the 1. Contractors bid competitively, based Construction Management services can owner. Based on completed construction on complete design documents to be provided in two different ways to plans, a contractor is selected through maximize the built product for the price. an owner. a bidding process to build the building 2. The owner selects the architect on the for a set price. During the construction basis of qualifications or ability. The period, the architect works to see that the architect’s role is that of owner’s advocate. 3. The architect is active in construction administration so design intentions are followed. In one form of Construction Management, In the second form of Construction 2. Early cost commitment gives owner the owner contracts separately with an Management, the owner contracts sepa- project cost security. architect, a Construction Manager as rately with an architect and a Construction 3. At Risk entity is responsible for Agent (CM-Agent) and—through a Manager at Risk or Construction Manager managing construction process and competitive bid process—one or more as Contractor (CM-Contractor). In this has more clout with subcontractors. prime contractors. The CM-Agent vendor form, the construction manager is 4. CM-Contractor can reduce owner’s provides early cost estimating, scheduling “at risk” since he provides both contractor burden in management of large or and assistance to the owner throughout the services and construction management complicated projects. bidding and construction phases of the services for the project. Construction 5. CM-Contractor reviews project for project. Additional cost control and Contractor services are provided to the constructability, cost and schedule, condensed scheduling are the two main owner based on a guaranteed maximum potentially reducing change orders benefits of this method. The CM-Agent price, fixed price, cost plus or other means and delays. approach can be beneficial for large, of defining a contract. This creates a major 6. Fast-tracking and multiple prime complex projects where construction alter- conflict of interest since the CM is no contracts may speed construction. natives and solutions can positively impact longer acting as an agent providing profes- the overall budget. The Construction sional services to the owner, but now is a Disadvantages of Construction Manager as Manager-Agent performs as an additional vendor delivering a contractually defined Contractor (vendor) representative of the owner’s interests. product to the owner for a price. 1. Management role of CM-Contractor is added cost. Advantages of Construction Advantages of Construction Manager 2. CM-Contractor may provide less Manager-Agent as Contractor (vendor) building than a bid approach to protect 1. CM-Agent with construction expertise 1. Architect still acts as agent protecting margin of profit. Major conflict of gives the owner an agent, in addition owner’s interest and architect’s early interest with role as both construction to the architect, to supervise the project, involvement with owner addresses manager and contractor. reducing the owner’s management building quality and function. burden in large or complicated projects. 2. CM-Agent’s project scheduling and capability to competitively fast track some items may speed process and save owner money. 3. CM-Agent’s cost estimating and construction expertise at design phase assists in monitoring construction costs. Disadvantages of Construction Manager-Agent 1. CM-Agent is added cost. Owner is at risk for final construction cost; actual construction costs are not known until design is complete. 3. Multiple prime contracts increase paperwork and administrative time, and increase potential for construction disputes and claims. 4. CM-Agent typically has less clout to resolve design-construction issues than a general contractor and serves only as a mediator. Opportunities and Constraints of Project Delivery Methods Design-Build negotiation between agencies, officials Advantages of Design-Build In the Design-Build delivery approach, and constituent communities is expected 1. Generally fastest project delivery the owner contracts with a single entity or required, a vendor led project delivery system. for both design and construction. The process may minimize the opportunities 2. Single entity responsible for design owner has one contract assigning single- for user involvement. The design-build and construction. point responsibility for the project. The entity is focused on the delivery of a 3. Early cost and scheduling commitment. Design-Build entity may be a single contractually defined product. Since single 4. Conflicts between project professionals organization with both architectural and point responsibility leaves no independent internalized; may not involve owner. construction staffs, or a construction orga- agent representing the owner’s interests, nization that hires or affiliates with an the owner will often be required to engage Disadvantages of Design-Build architect as part of a Design-Build
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