CEE 266 Construction Management Lecture 2 PDF

Who am I? CEE 266  Existing parties are:  Owner/developer, A/E Designer, Contractor,...

Who am I? CEE 266  Existing parties are:  Owner/developer, A/E Designer, Contractor, CONSTRUCTION Construction Manager MANAGEMENT  I am looking in to hiring a design firm. Lecture 2. Project Organization  I have the role of hiring contractor(s). and Contracting  I put together the bid package. a) Delivery Methods  I am overseeing the translation of design to Prof. Pervizpour construction x8-2137  I prepare shop drawings [email protected]  I need to review a change order request  I carry the risk of dealing with labor strikes Outline Common Delivery Methods  Contract components  Contract components Traditional Design/Bid/Build Design/Build  Project Delivery Method  Contracts  Understand owner’s need and establish objectives Owner Owner Traditional Prequalification & RFPs and performance requirements Designe Pure Construction Management Key elements General r A/E Design/Build Firm Construction Management At Risk Standard contract forms  Involve all keyContractor personnel Design/Build AIA, IPD, CMAA, AGC, DBIA, Lean  Payment Scheme and EJCDC  Sub‐contractor AsSub‐contractor required by type of contracting Sub‐contractor arrangements Contractor Contractor Contractor Administrating Contracts General points Pay Estimates & Payments  Identify milestones, need for contingencies Lump sum Claims Construction Management (CM) Owner/Agent Unit prices Remedies Bonds  Arrangements for proper communication Owner and Cost plus percentage fee Owner Cost plus fixed fee Insurances establishing methods to control changes Guaranteed maximum price In‐house Contract Incentive  Communicate A/E CM plan and responsibilities Design clearlyDesign  Award Mechanism Owner’s Contract Bidding Coordinator Negotiation Contractor Contractor Contractor Best value Contractor Contractor Contractor  Pure (Agency) Construction Example: Central Artery / Big Dig Management Pure Construction Management (PCM)  Most complex highway project in US history Owner  161 lane miles of urban highway, about half A/E CM underground in a 7.5 mile corridor  1982, Planning began  100 Section Design  1987, Congress Consultants Contractor Contractor Contractor approved funding and  Consists of 118 separate Contractual Relationship Communicational Relationship basic scope construction projects & 26 Flexibility in schedule and for changes  Construction Geotechnical drilling contracts Market competition for subcontracts Small financial risks of PCM but high risk of loss Schedule: 1991 –  During peak of construction of reputation 2006 (1999‐2002): PCM generally paid a fixed fee  Estimated Cost: Work completed/day: $3M Take over work of designer, GC, owner PCM as facilitator/Mediator in conflicts $14.624 Billion Workers on site: 5,000 Example: Central Artery / Big Dig Construction Management at Risk Owner Fort point channel: CM at Risk  Modern Continental got notice to MTA proceed on 3/7/1997 Owner Section Design CM  Expected completion 3/13/2002 Consultants B/PB  Estimated cost $301,377,284.10  Modified estimated cost A/E CM $403,929,276 Trade ‐Contractors  Modified date of completion Contractual Relationship December 2004 Contractor Contractor Contractor Communicational Relationship  100 Engineers + Consultants Contractual Relationship  800 workers on the site Communicational Relationship MTA – Massachusetts Turnpike Authority  Priorities = schedule – cost - B/PB – Joint venture of Bechtel & Parsons technical CM usually Guaranteeing Maximum Price Brinkerhoff (GMP) to give owner security (set at 95% design, fee typically 10‐15%) Reduced owner risk Halfway between DBB and PCM in terms of risk Contractual relationships between CM & Subs Howstuffworks Performance bonds typical  Example – Allentown Art Museum Design / Build  Contract established in 2006, for larger project. Design/Build One contractual team responsible for D&C function Owner  Difficult time to expand-donations retracted, other Owner emphasis more on schedule despite less control & uncertainty of projects on hold, however significant State grant Design/Build Firm cost still dedicated. Contractor Contractor Contractor Loss of control over design and flexibility in changes  Project downsized - $18M construction to $7.5 Owner develops 20‐30% design. Owner with sufficient knowledge Hires D‐B firm that will complete D & about D&C to establish initial  Contract AIA 121 CMc GMP – Fixed General C parameters, review proposals and conditions, CM fee, GMP is established by D/B company may hire subcontractors monitor the process Dominant method early US amendment CMc = http://www.aia.org/contractdocs/AIAS076698 Solicit work with RFP (honorarium, Recent drivers: downsizing of phased) corporations (outsourcing D), desire Can be good for complex projects‐ but for single source of responsibility, need phased design to shield parties time pressure, Limiting architect role Comparison: AIA 121 CMc 2003 vs. AIA 133-2009 from risk (constructability, D oversight) Example Design / Build: I15 Other Delivery Methods  Originally slated as DBB, but made DB to fast‐track Modified CM Design/Build: CM Oversight Design/Build Design Subcontracted (hard deadline due to Salt Lake City Olympic Games) Owner Owner  US DOT as owner agency CM CM A/E  Bidded project (with rights to use unsuccessful, Design/Builder Design/Builder unsuccessful bidders became contractors) Subcontracto Subcontracto Subcontracto Subcontracto Subcontracto Subcontracto r r r r r r  Reputation foremost CM serves as CM Provides Agency (200 subcontractors, few reviews) Design/Builder and Oversight on Owner’s Behalf Subcontracts Design “Completed in December 2012, Fastest billion‐dollar public highway project built in U.S.” http://www.dbia.org/awards/2013-Design-Build-Project-Awards/Pages/I-15-Corridor-Expansion-I-15- CORE.aspx  BOT – The Channel Tunnel, England‐ Other Delivery Methods France  Multiple Primes  50 Km undersea/underground tunnel  Separateprime contracts, Owner control schedule and  Two main tunnels and one service tunnel in the center management, Allows owner time to raise money, Owner can save on markups  Construction schedule: 1987‐1994  Estimated Cost (1987$s): $9.1Billion  Turnkey (Like DB but Contractor Financed)  Actual cost on completion (1994 $s):  Very common in residential housing $21Billion  Design‐Build‐Operate‐Transfer (BOT)  Eurotunnel, a consortium of Channel Tunnel Group (British Contractor) and  Financed, designed, built & operated by private France Manche (French Contractor) is developer, Legal way to “lease” government‐owned the owner and operator of the channel facilities, returned at end to owner  The English Channel Consists of  Owner/Agent (owner does part of design) Multiple Construction Projects Winch, 1998 Advantages of the 3 Most Common Disadvantages of the 3 Most Delivery Methods Common Delivery Methods Gould and Joyce, 2002 Modified Gould and Joyce, 2002  Comparisons (CM@Risk, DB, Comparisons (CM@Risk, DB, DBB) DBB)  Design & construction cost growth:  Construction Industry Institute (CII) Study on 350 (Final Proj Cost - Contract Award Cost)  100 construction projects Contract Award Cost  DBB has highest cost growth  Feedback on delivery method selection (4.83%)  Project data for delivery systems collected:  DB has lowest cost growth at 2.17%  Design & construction cost growth  Design & construction schedule growth  Design & construction schedule  Construction Speed (Sq. Ft. / Month) growth: (Total As Built Time - Total As Planned Time) 100  Quality/Turnover: startup difficulty, call backs, Total As Planned Time operations & maintenance  DBB has highest schedule growth (4.4%) CII, 1997  DB & CM@R have zero CII, 1997 Comparisons (CM@Risk, DB, Comparisons (CM@Risk, DB, DBB) DBB)  Quality / Turnover (after construction): startup difficulty, call backs, operations & Maintenance  Responses are sought with great objectivity  Responses are from facility owners  Quality is represented on a scale of  Construction Speed (Sq. Ft./Month) = 1-10 [Area/ (Total As Built Time in Days/30)]  Higher scores represent lower difficulty in start-up and fewer call  DB & CM@R have median in 8,000 – 9,000 ft2/month backs  DBB has median in 5,000-5,500 ft2/month  DBB provides least quality level CII, 1997