Project Delivery Methods
What is a Project Delivery Method?
A project delivery method is a system used by an owner for organizing and financing design, construction, operations, and maintenance services for a structure or facility by entering into legal agreement with one or more general contractor or construction management company.
General Contractor/Construction Manager
As substantial portions of the documents are completed, the General Contractor/Construction Manager will solicit bids from qualified subcontractors. These may be bid openly or via an alternative subcontractor selection process (e.g. M/E CCM for a mechanical/electrical contractor/construction manager).
Subcontractors and sub-CCM’s are frequently contract with the general contractor/construction manager for construction manager/general contractor but may be contracted directly to the owner. This may allow for accelerated construction and confirmation of pricing, sharing of risk between owner and contractor(s), and flexibility in construction investigation, sequencing, and procurement.
With this deliver method the Construction Manager acts as a consultant to the owner in the development and design phases, but assumes the risk for construction performance as the equivalent of a general contractor holding all trade subcontracts during the construction phase.
The Construction Manager at Risk (CMAR) is a delivery method which entails a commitment by the Construction Manager (CM) to deliver the project within a Guaranteed Maximum Price. (GMP) which is based on the construction documents and specifications at the time of the GMP plus any reasonably inferred items or tasks.
The CMAR provides professional services and acts as a consultant to the owner in the design development and construction phases. Often times, the CMAR also provides some of the actual construction of the project depending on the availability of bidders and the expertise the company has. In addition to acting in the owner’s interest, the CMAR must manage and control construction costs to not exceed the GMP because contractually any costs exceeding the GMP that are not change orders are the financial liability of the CMAR.
Integrated Project Delivery (IPD)
A project delivery method in which interests of the primary team members are aligned in such a way that the members can be integrated for optimal project performance resulting in collaborative, value – based process delivering high – outcome results to the entire building team.
A project delivery method that contractually requires collaboration among the primary parties – – owner, designer, and builder – – so that the risk, responsibility and liability for project delivery are collectively managed and appropriately shared.
Each of these project delivery methods carries a different level of risk for the owner. Generally, the level of control retained by the owner correlates with the level of risk, and those levels typically have an inverse relationship to the risk and control levels of the contractor.
No delivery method is right for every project. For each situation, there will be advantages and disadvantages in the use of any specific delivery method. The owner needs to carefully assess its particular project requirements, goals, and potential challenges and find the delivery method that offers the best opportunity for success
What does “Project Delivery Method” mean?
Project Delivery Method is a term often used in commercial construction. Below I have created an extensive list of Project Delivery Methods. I have also written separate blog posts on each of these topics and so if you clink on the pertinent.
Design-Bid-Build (DBB) or Design-Award-Build (DAB)
The Design-Bid-Build project delivery method is considered as the traditional method by experts in the industry. An owner develops construct documents with an architect or an engineer constituting of a set of blueprints and a detailed specification. Bids are solicited from general contractors based on these documents; a contract is then awarded to the lowest responsive bidder with the most experience.
DBB with Construction Management (DBB with CM)
With partially completed contract documents, an owner will hire a construction manager to act as an agent on its behalf. As substantial portions of the documents are completed, the construction manager will solicit bids from suitable general and sub-contractors. This allows construction to proceed more quickly and allows the owner to share some of the risk inherent in the project with the construction manager.
Public – Private Partnership (PPP, 3P, or P3)
A public private partnership is a cooperative arrangement between one or more public entities and typically the owner and another typically private-sector entity to design, build, finance and at times operate and maintain, project for a specific period of time on behalf of the owner.