CONTRACT AND PROJECT DELIVERY METHOD STRATEGIES
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Questions and Answers

What is the role of Ernie Becklesten in the Avocet Island Project?

  • Owner (correct)
  • Track Designer
  • Main Contractor
  • Project Manager

Which role is primarily responsible for design aspects within the Avocet Island Project?

  • Contractor
  • Owner
  • Designer (correct)
  • Project Coordinator

What is a factor that the Project Delivery and Contract Strategy (PDCS) Tool assesses?

  • Employee satisfaction
  • Owner's reputation
  • Preference weights (correct)
  • Market conditions

How does the project delivery method impact the project?

<p>Affects contractual relationships (A)</p> Signup and view all the answers

Which of the following is NOT a selection criterion for the project delivery method?

<p>Labor market trends (B)</p> Signup and view all the answers

What is the primary focus of the PDCS Tool when evaluating decision-making alternatives?

<p>Project’s objectives and execution environment (D)</p> Signup and view all the answers

Which role is assigned as the main contractor for the Avocet Island Project?

<p>Monisha Klarewill (D)</p> Signup and view all the answers

What might changes to the project delivery method influence?

<p>Cost modifications (C)</p> Signup and view all the answers

What is the primary legal feature of a construction contract?

<p>It outlines roles, responsibilities, and is legally binding. (A)</p> Signup and view all the answers

Who typically selects the contract type for a construction project?

<p>The owner, guided by engineers and legal advisors. (C)</p> Signup and view all the answers

Which of the following is NOT a commonality addressed in built environment projects?

<p>Establishing unachievable requirements. (C)</p> Signup and view all the answers

What supports project objectives and details project constraints?

<p>Contract type considerations. (C)</p> Signup and view all the answers

According to the Engineering Joint Contract Documents Committee, what does a construction contract delineate?

<p>Roles, responsibilities, and work specifics. (A)</p> Signup and view all the answers

What is a key consideration when closing out a contract?

<p>Verifying project alignment with initial objectives. (A)</p> Signup and view all the answers

Which phase directly follows contract proposal processing in project management?

<p>Contract execution. (C)</p> Signup and view all the answers

What role do engineers and legal advisors play in contract type selection?

<p>They provide advice to the owner for selection. (B)</p> Signup and view all the answers

What is the primary method used for establishing payment in a time and materials contract?

<p>An agreed hourly or daily rate (C)</p> Signup and view all the answers

Which factor is considered when an owner selects a contractor?

<p>The contractor's bid rating (D)</p> Signup and view all the answers

What does the owner do after prequalifying a subset of bidders?

<p>Negotiate with the lowest bid submitted (C)</p> Signup and view all the answers

What defines the selection criteria used by the owner when identifying contractors?

<p>Competitive bid ratings and qualifications (A)</p> Signup and view all the answers

What type of contract agreement is secured based on the best value bid?

<p>Negotiated agreement (D)</p> Signup and view all the answers

In the bidding process, what is the first step taken by the owner?

<p>Identifying selection criteria for bidders (C)</p> Signup and view all the answers

What is a significant disadvantage of a time and materials contract?

<p>It can lead to unlimited costs without a cap (D)</p> Signup and view all the answers

What is the goal of the owner when selecting bidders?

<p>To negotiate the most competitive bid awarded (B)</p> Signup and view all the answers

What is the purpose of indemnification in a contract?

<p>To allocate risks associated with uncertain work conditions (B)</p> Signup and view all the answers

Which of the following best describes liquidated damages?

<p>A pre-determined amount of money for specific breaches (C)</p> Signup and view all the answers

When considering project delivery methods, which criterion is most important?

<p>The complexity and scale of the project (B)</p> Signup and view all the answers

What is typically included under the 'sufficiency of contract documents'?

<p>All necessary information for project execution (D)</p> Signup and view all the answers

Why might delaying events in a project be considered a risk?

<p>It can lead to increased project costs and extended timelines (A)</p> Signup and view all the answers

What is a key feature of the design-build (DB) project delivery method?

<p>Combines the designer and contractor into one unit (D)</p> Signup and view all the answers

Which project delivery method emphasizes collaboration and shared ownership of risk?

<p>Integrated project delivery (IPD) (D)</p> Signup and view all the answers

In the construction manager at risk (CMAR) method, what is the role of the construction manager?

<p>To oversee the project and provide a guaranteed maximum price (D)</p> Signup and view all the answers

Which contract type requires design to be completed before construction begins?

<p>Design-bid-build (D)</p> Signup and view all the answers

What is a defining characteristic of the build-operate-transfer (BOT) method?

<p>The project is transferred to the owner after construction and operation (A)</p> Signup and view all the answers

What does the professional construction manager (PCM) do in project management?

<p>Coordinates design and construction efforts (B)</p> Signup and view all the answers

In which delivery method does the owner appoint a construction management entity?

<p>Construction Manager at Risk (CMAR) (D)</p> Signup and view all the answers

Which statement accurately describes the design-bid-build project delivery method?

<p>The construction phase can only start once the design is fully approved (B)</p> Signup and view all the answers

What is one of the risks associated with poorly defined contract types?

<p>Increased costs and time delays (A)</p> Signup and view all the answers

What is a common misconception about risk allocation in contracts?

<p>It is generally not necessary to allocate risks (C)</p> Signup and view all the answers

What risky practice might owners and contractors engage in regarding insurance compliance?

<p>Passively reviewing certificates of insurance (C)</p> Signup and view all the answers

What might happen if general conditions in contracts are not clearly defined?

<p>Increased chances of claims and disputes (D)</p> Signup and view all the answers

What is a consequence of improperly managing pricing risks in contracts?

<p>Underbidding to win contracts (B)</p> Signup and view all the answers

What is a potential issue stemming from increased contract complexity over time?

<p>Challenges in managing arising risks (A)</p> Signup and view all the answers

What is a consequence of assuming costs in a contract?

<p>Less accountability for the owner (C)</p> Signup and view all the answers

What can lead to misaligned incentives among contract parties?

<p>Improperly defined contract types (C)</p> Signup and view all the answers

Flashcards

Project Owner

The individual responsible for the overall project, defining goals, and approving decisions.

Project Designer

The individual responsible for designing the project deliverables, ensuring they meet specifications and requirements.

Project Contactor

The individual responsible for executing the project tasks, managing resources, and ensuring the project is delivered on time and within budget.

Budget

A project delivery method selection criterion that considers the financial resources available for the project.

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Design

A project delivery method selection criterion that evaluates the effectiveness of the proposed project design in meeting the project objectives.

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Risk

A project delivery method selection criterion that assesses the potential risks associated with the project and their impact.

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Schedule

A project delivery method selection criterion that considers the timeframe for completing the project.

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Owner Expertise

A project delivery method selection criterion that assesses the expertise of the project owner in managing similar projects.

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Contract

A contractual agreement between two or more parties that outlines their obligations and commitments.

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Direct Execution

A project delivery method where the owner directly executes projects, assuming full responsibility for design, construction, and financing.

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Construction Management (CM)

A project delivery method where the owner appoints a construction management professional (PCM) to manage and coordinate design and construction activities. The owner still retains ownership of the project.

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Build-Operate-Transfer (BOT)

A project delivery method that involves a public-private partnership (PPP) or a private finance initiative (PFI), where a private business entity assumes responsibility for design, construction, and operation of a project for a specific period, after which it is transferred to the owner.

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Design-Bid-Build

A project delivery method where design must be completed before construction can begin.

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Design-Build

A project delivery method where the owner contracts with a single entity to design and build the project, assuming full responsibility for both phases.

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Construction Manager at Risk (CMAR)

A project delivery method where the construction manager provides a guaranteed maximum price (GMP) and oversees all aspects of construction, offering a fixed price for construction-related costs.

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Integrated Project Delivery (IPD)

A collaborative project delivery method that emphasizes shared ownership of risk and encourages collaboration among all stakeholders throughout the project lifecycle.

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Termination Clause

A clause that specifies the conditions under which a contract can be terminated, often due to unforeseen circumstances preventing contract fulfillment.

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Indemnification Clause

A clause that protects one party from liability for damages caused by the other party's negligence or breach of contract.

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Liquidated Damages Clause

A clause stating that a specific amount of money will be paid as compensation for a breach of contract, agreed upon in advance.

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Sufficiency of Contract Documents

A common disclaimer clause specifying that the project scope is limited to what is explicitly stated in the contract documents.

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Delaying Events

Events that cause delays to a project, which are beyond the control of either party.

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What is a Construction Contract?

A legally binding document outlining roles, responsibilities, and work details under the construction contract, ensuring clarity and accountability for both the Owner and Contractor.

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What is Contract Type Selection?

The process of selecting a suitable contract type based on project needs and objectives, including considerations like contract type, closeout procedure, discovery, and execution.

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What is Owner-Selected Contract Type?

A contract type where the Owner selects the contractor based on advice from engineers and legal advisors, ensuring expertise and alignment with project goals.

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What is Scope Definition?

The process of defining and documenting the scope of work, including deliverables, milestones, and timelines, ensuring clear understanding of the project's boundaries.

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What is Contract Language?

Ensuring clear and detailed contract language that addresses potential risks and defines responsibilities, creating a robust and defensible agreement.

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What is Contract Management?

The process of managing and executing the contract, including monitoring progress, resolving disputes, and ensuring compliance with contract terms.

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What is Contract Closeout?

The process of closing out the contract, including final payment, handover of deliverables, and documentation of completion, bringing the project to a successful conclusion.

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What are the Commonalities of Built Environment Projects?

A set of common challenges in built environment projects, including managing complexity, solidifying administrative procedures, and establishing attainable requirements.

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Competitive Selection

A contract award method where the owner prequalifies bidders, assigns weights to selection criteria, and selects the bidder with the highest score.

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Negotiated Selection

A contract award method where the owner negotiates with a pre-selected bidder to reach a mutually acceptable agreement.

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Lowest Bid Selection

A contract award method where the lowest bid is selected, with the owner ensuring the bidder meets minimal qualifications.

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Best Value Bid

A contract award method where the owner selects the bid that offers the best combination of price, schedule, quality, and other factors.

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Time and Materials (T&M)

A contract award method where the owner and contractor agree on an hourly or daily rate for work, with no fixed scope or timeline.

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Fixed Fee

A contract award method where the owner pays the contractor a fixed fee for completing the defined scope of work, with the contractor absorbing any potential cost overruns.

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Shared Savings

A contract award method where both the owner and the contractor share in any savings that are realized due to efficiency or cost reduction.

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Cost Plus

A contract award method where the owner pays the contractor a percentage of the project's total cost.

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Misaligned Incentives

When different parties involved in a contract have conflicting goals or incentives, it can lead to issues like delays, budget overruns, and disagreements.

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Undefined Contract Type

Contracts that lack clarity about the type of agreement can cause uncertainty and make it difficult to determine responsibilities and expectations.

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Inappropriate Risk Allocation

When the distribution of risks and responsibilities among parties in a contract isn't clearly defined, it can lead to disputes and potential financial burdens.

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Passively Reviewing Insurance Certificates

The practice of passively reviewing insurance certificates without proper scrutiny can create risks as it may not guarantee actual insurance coverage.

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Risks in General Conditions

Contracts with unclear or incomplete general conditions can result in conflicts, claims, and disputes between parties.

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Increased Contract Complexity

Long-term contracts with evolving needs can become complex and require flexibility to adapt to changing circumstances.

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Underbidding Risks

When contractors underestimate costs to win a bid, they might face financial issues later in the project, potentially affecting project performance.

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Inadequate Insurance Requirements

Poorly defined requirements for insurance coverage can lead to confusion and potential gaps in protection, increasing the risk of financial loss.

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Study Notes

Construction Contract and Risk Management

  • This presentation covers contract and project delivery strategies for construction projects.
  • The whole is greater than the sum of its parts (Aristotle). This means that understanding the connection between project parts is key to effective project management.

Project Delivery Methods

  • Project delivery method defines contractual relationships, so selecting the correct method is critical.
  • The process needed to execute and complete a construction project
  • This requires reviewing various project delivery methods and introducing different contract structures.

Project Delivery Method: Selection Criteria

  • The criteria for selecting a project delivery method include:
    • Budget
    • Design
    • Risk
    • Schedule
    • Owner expertise

Project Delivery Method: Impact

  • Establishes engagement
  • Affects contractual relationship
  • Influences ownership
  • Impacts changes and modifications to cost

Project Delivery and Contract Strategy (PDCS) Tool

  • A quantitative assessment of 12 decision-making alternatives
  • Focuses on the project’s objectives and the execution environment

Project Delivery Methods - Specific Methods

  • Presentation listed several project delivery methods including:
    • Design-bid-build (DBB)/traditional
    • Design-build (DB)/turnkey
    • Construction manager at risk (CMAR)
    • Job order contracting (JOC)
    • Multiple-award task order contract (MATOC)
    • Construction management multi-prime (CMMP)
    • Public-private partnership (PPP or P3)
    • Integrated project delivery (IPD)
    • Build-operate-transfer (BOT)
    • Professional construction management (PCM)

Contract Types/Structures

  • These are the different ways contracts are structured
    • Lump sum
    • Cost plus a fee
    • Guaranteed maximum price (GMP)
    • Unit price
    • Admeasurement contract
    • Target cost contract
    • Time and materials (T&M)

Contract Award Method

  • Negotiated selection:
    • Owner identifies an entity to hire.
    • Owner negotiates a mutually accepted agreement directly.

Contract Risks

  • Built environment contract risk refers to any potential for loss at any time.
  • Some risks include:
    • Contract type and misaligned incentives among parties
    • Increased contract complexity
    • Inadequate insurance certificate
    • Pricing risks
    • Risks in general conditions of contracts
    • Inappropriate risk allocation.

Common Disclaimer Clauses

  • Some common clauses in construction contracts that help mitigate risk include:
    • Uncertainty of work conditions
    • Delaying events
    • Indemnification
    • Liquidated damages
    • Sufficiency of contract documents

Standard Form of Contract (SFoC)

  • Predetermined by authoritative bodies or alliances
  • Focuses on rights, obligations, and duties
  • Provides contractual guidance, and conditions

Purpose of an SFoC

  • Starting point for the contracting process
  • Customizable to suit project needs
  • Holds all contractual parties accountable
  • Allows owners to amend or adjust as necessary

Avocet Island Project

  • The slides include discussion points for the Avocet Island project concerning project delivery methods and contract type.
  • A map of the island was included
  • Questions included considerations for determining an appropriate delivery method and contract type.

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Built Environment Contract and Risk Management PDF

Description

This quiz explores the vital roles and tools involved in the Avocet Island Project. Test your knowledge on project delivery methods, contract strategy, and the key responsibilities of team members. Understand the legal aspects and criteria that influence construction contracts within the project.

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