Complete Proposal for Construction Project - PowerPoint

Document Sample
Complete Proposal for Construction Project - PowerPoint Powered By Docstoc
					    Methods of
 Project Delivery
 for Construction

“Lessons Learned”


   November 2007

   Presented by:
 Mary K. Crites, AIA
Parkhill, Smith & Cooper, Inc
Introduction
Owners Desired methods for:
    Faster time
    Less Cost, and earlier confirmation of cost
    Improved quality
    Less Conflicts/Litigation

Major variables in delivery selection include:
    Time sensitivity
    Cost
    Quality
    Allocation of Risk

Lesson #1: No single “best” method for all projects

Lesson #2 : Impact of each variable is different depending on the
            method and NO Method delivers fastest, cheapest, &
            highest quality.

Lesson #3: Selection of Delivery Method should occur
           before A/E selection
Competitive Bidding (design-bid-build)
Advantage
    Potential for lowest construction price because:
       Contractor Competition
       Defined Scope during bidding because design complete


    Separate contracts enables A/E to be Owner Representative
     during Design & Construction
Competitive Bidding (design-bid-build)
Disadvantages
    Construction price not finalized until after design & bid
       Re-design & re-bidding may be required to meet budget
       Early change order can reduce scope


    Provides “lowest” price WITHOUT respect to Contractor
     qualifications or Contractor workmanship

    Linear schedule, Construction difficult prior to design completion

    Limited contractor input during design
Competitive Bidding (design-bid-build)
Least Suited when:
    Project is complex &/or large
    Scope subject to change
    Quality is important factor

Best Suited when:
    Project is not subject to change
    Lowest price is most important
    Quality is less important
    Project is small in scale & not complex


 Lesson #4: Quality is important- don’t have a dirt Contractor build a
              Courtroom!!
Competitive Sealed Proposal (CSP)
Advantages
    Defined scope during bidding w/design complete

    Separate contracts enables A/E to be Owner representative during
     Design & Construction

    Potential for “best value”-combination of price and qualifications

    Owner determines what selection criteria are important

    Owner may negotiate with selected GC prior to award
Competitive Sealed Proposal (CSP)
Disadvantages
    Construction Price not finalized until after design & bid
       Re-design & re-bidding may be required to meet budget
       Negotiation prior to award can reduce scope


    Linear schedule, Construction difficult prior to design completion

    Limited contractor input during design
Competitive Sealed Proposal (CSP)
Least Suited when:
    Scope subject to change

    Cost is most important


Best Suited when:

    Scope less subject to change

    Price AND quality are both important

 Lesson #5: Selection Criteria can be very sensitive, and subject to

     interpretation. Determine point system prior to proposal
Construction Manager-at Risk (CM-R)
Advantages
    Separate contracts enables A/E to be Owner representative during
     Design & Construction

    Prime Contractor selection heavily based on qualifications

    Allows contractor input during design phase

    Roles & responsibilities = team approach (Owner, A/E, CM-R)

    Proposals/selection of sub-contracts open to Owner & A/E

    Can have non-linear schedule, construction can start prior to
     design completion

    Construction Cost can be established early with GMP
Construction Manager-at Risk (CM-R)
Disadvantages
    Difficult to determine validity of:
          Costs associated with general conditions
          CM-R may “self perform” portions of work, no
           competitiveness in pricing
          UT System now requires audit at completion to determine
           validity


    Contractor may increase GMP because of higher assumed risk


    Final Price usually not established until after completed design
Construction Manager-at Risk (CM-R)
Least Suited when:
    Project is small
    Cost is most important

Best Suited when:
    Project is large &/or complex
    Scope subject to change
    Price AND quality are both important




 Lesson #6: Contractors are risk averse, very early GMP’s result in
  less SF or higher cost.
Design-Build (D-B)
Advantages
    Single overall point of responsibility


    D-B selection usually weighted towards qualifications


    Heavy contractor input during design phase


    Can have non-linear schedule, i.e. construction can start prior to
     design completion


    Early cost guarantee may occur; could be higher cost- cover risk
Design-Build (D-B)
Disadvantages
     Difficult to determine validity of scope vs cost

     Contractor may increase budget/GMP or Price to cover risk

     D-B A/E unable to be Owner representative during design and
      construction. Contractor typically “controls” AE.

     Selection of sub-contracts not open to Owner

     Design Criteria package critical- or you may get no windows!

     Requires high level of sophistication in Owner staff
        Who will certify DB pay application?
        DB AE less involved during CA, & does not represent Owner
Design-Build (D-B)

Least Suited when:
  Scope is difficult to clearly define from the outset
  Cost is most important


Best Suited when:
  Scope clearly defined in Design
   Criteria Package
  Minimum quality is acceptable


 Lesson #7: Owner needs to realize impact of this method
  a. AE as a “sub” limited in role of “protecting Owner”
     b. Owner needs experienced staff/consultant to monitor project
     c. quality only as good a design criteria package

 Lesson #8: My preference is to be Owners AE, represent Owner,
            monitor DB
Job Order Contracting (JOC)

  Advantages:
    Potentially faster delivery time if JOC on-board
    Owner could augment their own maintenance staff




  Disadvantages:
    Cumbersome to verify cost when multiple trades/materials used
    May not be competitive
Job Order Contracting (JOC)
Least Suited When:
  Multiple trades required
  Large or medium or complex projects
  Price sensitive



Best Suited When:
  Schedule sensitive
  Small repairs
  Not price sensitive


 Lesson #9: Ronald Reagan’s rule applies: “trust but verify” -
           Detailed pricing MUST be reviewed for accuracy, or you
           too can be charged for stainless steel duct work!
Construction Manager-Agent (CM-a)
Advantages
    Could save Owner some General Contractor costs
    Allows Owner to phase construction
    Can evaluate each sub-contractor bid separately

Disadvantages
    Owner assumes higher risk, no guarantee of cost

Least Suited when:
    Owner is risk averse

Best Suited when:
    Owner willing to assume risk

 Lesson #10: Never ask client to assume more risk.
             Some clients to save money will assume this risk.
             My experience is that they usually regret it!
Most
Observations
Key points to remember:
    Selection of method should occur early


    More “unknowns” represent more risk,
     when Contractor assumes more risk = increased Price


    Crites Preference of methods:
         CSP (generally under $5 million)
         CM-R (generally over $5 million)
         Selection depends on size and complexity


No one delivery method is best for all projects!!

				
DOCUMENT INFO
Description: Complete Proposal for Construction Project document sample