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ACH 231 Lecture 06 (Project Delivery)
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ACH 231 Lecture 06 (Project Delivery)

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ACH 231 Lecture 06 (Project Delivery) ACH 231 Lecture 06 (Project Delivery) Presentation Transcript

  • Project Delivery Determinants Owner Sophistication Type of Project Delivery Methods
  • Why Project Delivery?
    • Owner’s approach to organizing the project team
      • Manage the entire design and construction process
      • Owner’s desire to deliver the project ON TIME, WITHIN BUDGET and will meet the owner’s needs most effectively
  • Determinants
    • Common Elements to Defining Projects:
      • Scope, Quality, Schedule & Budget
      • Site
      • Planning Approach
      • Financing
      • Delivery Process
      • Aspirations
  • Determinants
    • Which Delivery Process to Recommend:
      • Size & Complexity of Project
      • Schedule vs. Budget Driven
      • Global Economy / Bidding Climate
      • Owner Sophistication
  • Owner Sophistication
    • Constantly Building
      • Large Developers
      • Large Government Agencies
    • Infrequent Building
      • Small Developers
      • Small Government Agencies
    • One-Time Builders
      • Individuals
  • Owner Sophistication
    • Constantly Building
      • Great experience & knowledge of design & construction
      • Identify specific project requirements
      • Require little educating by architects and contractors.
      • Usually have their own contracts, etc.
  • Owner Sophistication
    • Infrequently Building
      • Some experience & knowledge of design & construction
      • Need help in identifying specific project requirements
      • Require moderate educating by architects and contractors.
  • Owner Sophistication
    • One-time Builder
      • “ Kamikaze” Clients
      • Require large amount of education
      • Need Architect to define requirements
      • Usually involves pre-design services by Architect (as Additional Services).
  • Who are the Players in a Construction Project? AKA The “Golden Triangle” Financial Marketing Legal Property Managers Users Owner
  • Who are the Players in a Construction Project? AKA The “Golden Triangle” Engineers Consultants CADD Design Development Specifier Owner Architect Contract
  • Who are the Players in a Construction Project? AKA The “Golden Triangle” Subcontractors Suppliers Estimating Procurement Scheduling Field Operations Owner Architect Contractor Contract
  • Project Delivery Methods
    • Design-Bid-Build
    • Design/Build
    • Fast Track
    • Construction Management
  • Project Delivery Methods DESIGN-BID-BUILD
    • Most Common Method Used in U.S.
      • Most “Traditional” Method
      • Linear Progression
      • Construction cost determined after all bids are received & accepted
      • May have multiple contractors
  • Design-Bid-Build Project Timeline A need for a facility is identified by the owner Owner hires Architect to complete design and documentation Project is solicited for competitive bid Owner Selects Contractor based on submitted bids Owner awards contract to winning bidder and construction commences
  • Project Delivery Methods DESIGN-BID-BUILD
    • Contractor is solely responsible for delivering the completed project
      • Must comply with contract documents
      • GC may subcontract much of the work (TYPICAL)
    • Owner has A/E administer the contract
      • or can have in-house people administer contract
    • Still the most popular method of delivery but not predominant method.
  • Project Delivery Methods DESIGN-BID-BUILD $ Bid Price $ Owner Architect Contractor $ Design Fee $ Contract Documents Engineers/ Consultants Informal relationship Subcontractors/ Suppliers
  • Project Delivery Methods DESIGN-BID-BUILD
    • ADVANTAGES
      • Well-defined relationship
      • Procedures and contractual rules have been worked out; well understood
      • Reduces risk, no uncertainty
      • Considerable contractual protection for owner
      • Owner benefits from open market competition
      • Owner not heavily involved in construction process
    • DISADVANTAGES
      • Contractor does not start construction process until design is complete
        • Design features that could be built more economically often result in higher costs
      • Timeline is linear & sequential; no way to overlap tasks
        • May raise interest expenses and be subject to inflation
      • All parties are self-governed
        • Provides little opportunity for interaction and team building
  • Project Delivery Methods DESIGN/BUILD
    • Single point of contact for Owner through entire project (design to construction)
    • Owner must specify exact project requirements
    • Typically Contractor has lead role
    • Architect relinquishes control
    • Contractor controls costs & quality
    • Architect is selected by Contractor
  • Architect Contractor Subcontractors Suppliers Estimating Procurement Scheduling Field Operations Engineers Consultants CADD Design Development Specifier Formed Design-Build Owner
  • Project Delivery Methods DESIGN/BUILD
    • Firm hired will complete both design and construction
      • Design/Build Firms with in-house design and construction services
      • Joint venture Firms that contractually come together
      • Both entities can hire subcontractors to complete the work
  • Project Delivery Methods DESIGN/BUILD Project team is established at start of design Contract Award Completed Project Owner Design/Build Firm Engineers/ Consultants Subcontractors/ Suppliers
  • Project Delivery Methods DESIGN/BUILD
    • ADVANTAGES
      • Good communication between design team and construction team
        • Tasks can overlap; project can be fast-tracked
        • Construction input early in design phase
          • Constructability analyses
          • Value engineering
          • Subcontractor pricing
      • Easy incorporation of changes
      • Owner involvement minimal in day-today communication between A/E and contractor
    • DISADVANTAGES
      • Owner can not obtain “real” pricing; design and construction costs can not be determined until later
        • Firming up costs too soon puts constraints on scope of work; could effect quality to protect profit
      • D/B works very fast, Owner needs to stay involved
        • Owner could make decisions without fully understanding the issues
      • No checks and balances
  • Project Delivery Methods FAST TRACK
    • Process of administering multiple construction contracts for the same project
    • Construction phases are staggered
      • Portions of work are started as soon as design is completed
      • Shortens construction timeline considerably
        • Used when Schedule is most important
      • Design and construction overlap
  • Project Delivery Methods FAST TRACK
    • Design/Build works best for Fast Track
    • Requires early design decisions to be adhered to, or very costly to change
    • Construction cost management is RISKY
      • If project runs late, project will incur huge cost overruns
      • Design Fees
      • Management Fees
      • Changes
  • Project Delivery Methods FAST TRACK Design Fast-tracked Phased Construction Project Complete Project Complete Contract Package 1 2 3 4 -Bid -Build Design Procurement Construction Design Procurement Construction Design Procurement Construction Design Procurement Construction Design Procurement Construction Time Saved
    • Two Types:
      • At-Risk
      • Advisor
    Project Delivery Methods CONSTRUCTION MANAGEMENT
  • Project Delivery Methods CM-AT RISK
    • Also known as “CM-Constructor”
    • Often uses GMP (Guaranteed Maximum Price) – construction cost based on early (pre 100% CD) documents
    • Owner hires design firm and construction firm early in the preconstruction phase
      • Often CM is also hired during design phase – early decisions have direct affect on CM’s costs
  • Project Delivery Methods CM-AT RISK $ Bid Price $ Completed Project Contract Award Contractor Fee Owner Architect Contractor $ Design Fee $ Contract Docs Engineers/ Consultants Subcontractors/ Suppliers Contracting Services
    • ADVANTAGES
      • Good communication between owner, design team and constructor
        • Encourages collaboration and allows construction people to critique and influence the design before it’s bid
      • Allows for good value-engineering
      • Allows for fast-tracking
      • Owners receives cost benefit of competitive bid from subcontractors
      • Changes are worked out more easily
    • DISADVANTAGES
      • Everyone has to remain amicable throughout project
      • Owner has to be involved; requires a knowledgeable owner
      • Fast-tracking is usually required, but can be risky if the firm does not have the organizational sophistication to handle it.
    Project Delivery Methods CM-AT RISK
    • CM hired during design
    • Provides services in support of design process:
      • Cost Estimating
      • Constructability
      • Scheduling
      • Phasing/Logistics
    • CM may assist during Construction as an Advisor (not at risk)
    Project Delivery Methods CM-ADVISOR
  • Project Delivery Methods CM-ADVISOR Project team is established at start of design $ Design Fee $ Contract Award Completed Project Owner Architect Contract Documents Engineers/ Consultants Subcontractors/ Suppliers Management Services
  • NEXT LECTURE Contract Documents The Bidding Process Construction Contracts