BUILDING YOUR TEAM
Options For Delivering Construction Projects
TERMS TO KNOW
Construction Management at Risk (CM@R)
Early in the process, the Owner hires both an Architect and a Construction Manager to plan, design, and build the structure together.
Construction Manager
Firm hired by the Owner early in the planning/design phase to act as the Owner’s advocate during both the preconstruction and construction phases of the project. In many cases, the CM also acts as the Contractor during the construction phase of the project.
Contractor
A builder who enters into a contract with the Owner for the construction phase of a project, and who takes full responsibility for the successful completion of construction. A Contractor may also enter into subcontracts with others to perform specific parts or phases of the project.
Delivery Method
The type of relationship, or team, chosen by the Owner to design and build a construction project.
Design-Bid-Build
The Owner hires an Architect to design the building, then invites General Contractors to bid on building it exactly as drawn, then hires the lowest bidder.
Design-Build
The Owner chooses a General Contractor who then selects an Architect to partner during design/construction.
Designers
Architects and/or Engineers responsible for planning and ultimately producing drawings and specifications for buildings.
Guaranteed Maximum Price (GMP)
The total cost that the General Contractor promises not to exceed without authorization from the Owner.
Preconstruction
The stage of planning a construction project prior to starting construction which includes constructability, cost, and schedule reviews. At this stage, challenges are identified, solutions offered, and predictability and success are improved.
Scope
The complete range of construction drawings and specifications that will be considered in the process of calculating the construction costs and schedule.
Subcontractor
A specialized contractor who enters into a contract with the General Contractor to perform specific parts or phases of the construction project.
Design-Bid-Build
Best Suited For:
Design-Bid-Build is ideal for simple new construction projects where the schedule is not a priority, and there is little likelihood of scope changes. It is typically used for projects that prioritize a clear design and competitive bidding process.
Schedule
Advantages of Design-Bid-Build Delivery Method
► Both Designers and Contractor accountable to the Owner: The Designers are directly responsible for design, and the Contractor for construction, ensuring separate accountability.
► Designers are the single point of contact in Preconstruction: The Owner deals only with the Designers during the planning and design phases, simplifying communication.
► Fully defined construction scope during design: A complete design is finished before bidding, ensuring clarity in scope and reducing ambiguities for Contractors.
► Simple Contractor selection process: Contractors are chosen based on competitive bidding, making the selection process straightforward.
► Competitive bidding for a defensible low cost: The bidding process drives Contractors to submit the lowest possible price, often providing the Owner with a lower initial cost.
Disadvantages of Design-Bid-Build Delivery Method
► Longest project delivery time frame: Since design, bidding, and construction occur sequentially, the overall project takes longer than other delivery methods.
► No Preconstruction input from the Contractor: The Contractor is not involved during the design phase, leading to potential issues with constructability, scheduling, logistics, or budgeting that could have been addressed earlier.
► Owner warrants error-free drawings: The Owner is responsible for ensuring the accuracy of the construction documents, meaning they may face additional costs for any design errors or omissions.
► Limited control over Contractor and Subcontractor quality: The low-bid process limits the Owner’s ability to choose Contractors based on qualifications or quality, potentially leading to performance issues.
► Potential for redesign and cost overruns: If bids exceed the Owner’s budget, redesign may be required, which adds time and cost to the project.
► Adversarial relationships and disputes: The separation between design and construction often leads to conflicts, increasing the potential for disputes or litigation between the Designers, Contractor, and Owner.
Summary
Design-Bid-Build is best for projects where time is not critical and the Owner seeks a clear, competitive bidding process. However, it can be slower and more prone to disputes due to the lack of Contractor involvement during design and the separation of responsibilities between the Designers and Contractor. While it may produce a lower initial cost, it often results in higher overall costs due to change orders and other inefficiencies.
Construction Management at Risk
Best Suited For:
More unique or challenging new construction or renovation projects that are schedule sensitive, subject to change, require preconstruction services, or require a high level of coordination, such as tight sites, occupied sites, ongoing business operations, unusual products, LEED® certification, or regulatory agency compliance.
Schedule
Structure
Advantages of CMAR Delivery Method
► Advocate relationship: A more collaborative relationship between the Owner and CM reduces the likelihood of disputes.
► Qualifications-based selection: The Construction Manager (CM) is chosen based on their expertise and fee structure, ensuring a capable partner.
► Designer and Construction Manager accountability: Both parties are responsible to the Owner, promoting collaboration and reducing disputes.
► Fast-track construction: CMAR allows for overlapping design and construction phases, speeding up the overal process.
► Preconstruction services: The CM conducts reviews of constructability, logistics, scheduling, and budgeting, reducing design errors and achieving lower project costs.
► Early involvement in design: The CM’s early participation minimizes the chance of costly change orders during the construction phase.
► Subcontractor financial monitoring: Subcontractors are vetted and monitored for their financial strength to ensure they complete the project and fulfill warranties.
► Inclusive participation: This method supports greater outreach to Historically Underutilized Businesses (HUB), encouraging diversity in contracting.
► Competitive Subcontractor bidding: All work phases are competitively bid, ensuring high-quality and costeffective subcontractors are selected.
► Owner control of construction team: The Owner has direct influence over selecting both the CM and subcontractors, enhancing project quality.
► GMP: This can be set earlier compared to the Design-Bid-Build delivery method, giving the Owner greater cost certainty.
► Efficient change processing: The open-book approach allows for timely and cost-effective handling of scope changes.
► Open book estimating and accounting: The Owner has full transparency into construction costs, ensuring no hidden fees or expenses.
Construction Management at Risk
Disadvantages of CMAR Delivery Method
► Longer project delivery time than Design-Build: While CMAR can be faster than the Design-Bid-Build delivery method, it is generally slower than the Design-Build delivery method.
► GMP set later than in Design-Build: In CMAR, the GMP is typically established after a portion of the design work is completed, which is later than the Design-Build delivery method, where the price is often set earlier due to a more integrated approach.
► High reliance on the Construction Manager’s preconstruction abilities: The success of this delivery method depends on the CM’s expertise in creative thinking, cost estimation, scheduling, and constructability reviews during Preconstruction. A lack of expertise in these areas could negatively impact the project.
► Need for designer collaboration: The Designer must be open to working closely with the CM during the planning and design phases. Without strong collaboration, design conflicts or inefficiencies could arise.
► Incomplete construction documents may lead to cost increases: If key details are missing from the construction documents, the project might incur additional costs due to scope changes or design clarifications during construction.
► Owner reliance on Construction Manager’s pricing: The Owner must trust that the CM’s pricing is both thorough and competitive. While open book estimating provides transparency, the Owner has limited control over the actual pricing process, which can lead to concerns about cost efficiency.
Summary
CMAR is well-suited for complex projects where cost certainty, schedule efficiency, inclusion and quality control are priorities. To ensure success, Owners must work with seasoned professionals and maintain open, transparent communication.
Design-Build
Best Suited For:
Simple new construction projects that require fast delivery and have minimal scope changes. Projects that prioritize speed and efficiency benefit from this streamlined approach.
Schedule
Advantages of Design-Build Delivery Method
► Shortest project delivery time frame: Since design and construction often overlap, this method is the fastest.
► Qualifications-based selection: The Owner can choose a Design-Builder not just based on price, but on their overall value and experience.
► Single point of contact: The Design-Builder is responsible for both design and construction, simplifying communication for the Owner.
► Lowest design costs: Integrated design and construction can reduce the overall cost of design services.
► Fast-track construction: Phases can be compressed or performed simultaneously, speeding up project completion.
► Preconstruction services: Early involvement of the Design-Builder allows for insights into budgeting, planning, and constructability, improving project outcomes.
► GMP set early: This gives the Owner cost certainty very early in the planning and design process, unlike other delivery methods.
► Open book estimating and accounting: The Owner has full transparency into construction costs, ensuring no hidden fees or expenses.
► No change orders for design errors or omissions: Since the Design-Builder is responsible for both design and construction, they bear the risk of any errors or omissions in the design.
Design-Build
Disadvantages of Design-Build Delivery Method
► Must have well-defined budget and performance requirements: Owner must have clear, upfront requirements, as changes are harder to accommodate later in the process.
► Only Design-Builder is accountable to Owner: The Designers work for the Design-Builder, meaning the DesignBuilder is the party responsible for delivering the project.
► Owner has limited control over quality of Designers: The Owner cannot directly select the Designers, as this is the Design-Builder’s decision.
► Incomplete scope during design: The construction scope may be less defined in early design stages, leading to adjustments during construction.
► Quality could be compromised due to cost focus: A heavy emphasis on cost efficiency might result in compromises on material or design quality.
► Reduced time for user group reviews: The accelerated schedule may limit input from user groups, affecting project customization or stakeholder engagement.
► Limited flexibility for scope changes: The Design-Build delivery method typically struggles with significant changes once the project has started.
► Designer construction administration often omitted: Since the Designer works for the Design-Builder, there will be limited Designer oversight during the construction phase.
Summary
Design-Build is ideal for projects where speed is critical, and scope changes are minimal. However, the Owner must prioritize trust in the Design-Builder, as they have limited control over Designer and Subcontractor selections. While it can save time and money, it requires clear upfront requirements to avoid compromising quality.
