Chapter 1: Understanding Owners and Projects PDF

# Understanding Owners and Projects ## An Owner's Role - the party responsible for a construction project. - can be a person, group, or company. - initiates and raises funding. - develops facilities to meet functional and business requirements. ## Public Sector Owners - develop facilities to...

# Understanding Owners and Projects ## An Owner's Role - the party responsible for a construction project. - can be a person, group, or company. - initiates and raises funding. - develops facilities to meet functional and business requirements. ## Public Sector Owners - develop facilities to meet federal, state, or municipal project needs. - funded through taxes or public revenue such as bonds. - include traditional owners as well as semi-public institutions such as utilities, regional airport authorities, and educational and research institutions. - spend about 80% of all funds on projects. ## Private Sector Owners - are not bound by public acquisition regulations. - have more flexibility in the procurement process. - subject to applicable federal, state, and local regulations such as building codes, zoning restrictions, and environmental requirements. - use relationships based on prior experience or other business motives to procure project teams. - limit risk with contractual relationships that share project risks and rewards. ## Public-Private Partnerships (P3) - a funding and delivery method that arose in response to federal, state, and municipal lack of funds to promote public projects. - involve a public sector entity seeking a private sector partner to fund, develop, and operate an infrastructure or facility project. - private sector partners typically provide design, build, and operational services. - compensated for their efforts via tolls or fees collected from project users. - combine elements of both public and private sector procedures. ## Project Delivery Methods - **Project Delivery** is the process of planning, designing, building, and completing a construction project. - **Project Delivery Method** refers to the chosen system for achieving the satisfactory completion of a construction project. ### Traditional Construction Manager Approach (Design-Bid-Build) - linear five-phase process: pre-design, design, procurement, construction, and post-construction. - owner hires a design consultant who prepares a complete design package. - the design package is presented to GCs who submit bids for the work and execute contracts with subcontractors. - the lowest responsive and responsible bid is typically chosen. - the contractor constructs the facility according to the design. - the designer maintains limited oversight of the work and responds to questions about the design. **Advantages:** - well-understood and widely applicable. - clear roles for all parties. - provides owner with control over the final product. **Disadvantages:** - time-consuming. - limited input by contractor in design. - owner exposed to potential contractor claims over design errors. - adversarial relationships among owner, designer, and contractor. - contractor pursues a least-cost approach, requiring increased oversight by the owner. ### Multiple Prime Contracting - owner holds separate contracts with contractors of multiple disciplines. - owner manages the overall schedule and budget. **Advantages:** - widely applicable and well-understood. - clearly defined roles for all parties. - provides owner with control over the project. - open price competition. **Disadvantages:** - owner assumes greater risk. - owner is responsible for project changes and schedule gaps. - increased oversight by the CM. ## Construction Manager At-Risk (CM at Risk or CMAR) - owner uses the CM as a consultant to provide advisory professional management assistance in the pre-construction phase. - CM transitions to the role of the GC and assumes risk by guaranteeing the project’s completion for a negotiated price (GMP). **Advantages:** - early development of working relationships. - cost security for owner. - transparency in subcontracting process. - potential cost savings/sharing incentives. **Disadvantages:** - owner has little control over cost contingencies. - lack of explicit duties of loyalty and care to the owner. - potential for adversarial relationships. ## Design-Build (D-B) - owner contracts with a D-B team to plan, implement, and control the entire project through completion. - D-B team negotiates a fixed price to complete the design and construction of the facility. **Advantages:** - simplicity of having one party responsible for the entire project. - decreased potential for disputes. - owner has a single point of responsibility. - fast-tracking and/or phasing options. **Disadvantages:** - owner has fewer checks and balances and less control over design, price, schedule, and technical matters. - difficult for the owner to verify the best value. - complex logistical planning, scheduling, and coordination. ## Considerations for Selecting a Delivery Method - **Type of Project:** gauge the level of complexity and uniqueness. - **Size of Project:** consider the amount of assistance and number of participants. - **Owner Capabilities:** make a realistic assessment of in-house expertise. - **Time Considerations:** consider if the project needs to be completed in a compressed timeframe. - **Likelihood of Changes:** evaluate the potential cost of changes. ## Construction Management - a discipline uniquely tailored to the planning, design, and construction process. - used successfully in all contracting methods and delivery systems. **Advantages:** - provides the owner with control over the project. - maximizes the owner’s control over scope, quality, time, cost, and safety. - adds predictability to the project. - increases the owner’s confidence in the success of the project. **Advantages of Using CM Services:** - most effective use of available funds. - enhanced control of the scope of work. - optimal project or program scheduling. - best use of individual project team members’ expertise. - maximum avoidance of delays, changes, and claims. - enhanced design and construction quality. - optimal flexibility in contracting or procurement options. - recommendations for emerging technology tools. **Key Tasks of Construction Management Services:** - development of a written scope of work. - development of thorough design criteria. - communication and management of risk. - design quality assurance. - consideration of material, systems, and process alternatives. - constructability reviews. - code compliance review. - matching construction spending to funds availability. - milestone cost estimating. - construction contract administration and compliance. - continuous schedule analysis. - program management. - project controls. - project management. - project monitoring. - quality management. - risk management. - energy and sustainability solutions. - inspection services. - operations and maintenance. - safety and environmental health management. - schedule management. - virtual design and construction services. ## Other Project Delivery Methods - Integrated Project Delivery (IPD) - Lean Construction - Engineering-Procurement-Construction (EPC) - Engineering-Procurement-Construction-Management (EPCM)