Project Delivery Methods Lecture Notes PDF

Arch 6315-4315 Project Delivering Methods August 31, 2023 Ingeborg Rocker Stuart Romm Traditional Roles and Contractual Relationships | Delivery Finance & Insurance Architect Engineers Architect’s activities Prog. General Contractor’s activities SD Reviewing Authority Owner General Contra...

Arch 6315-4315 Project Delivering Methods August 31, 2023 Ingeborg Rocker Stuart Romm Traditional Roles and Contractual Relationships | Delivery Finance & Insurance Architect Engineers Architect’s activities Prog. General Contractor’s activities SD Reviewing Authority Owner General Contractor Consultants DD CD Sub BA BA Sub Construction Administration Management of Construction Traditional Roles and Contractual Relationships | Delivery Finance & Insurance Program Manager Architect Engineers Architect’s activities Prog. SD Construction General Contractor Manager Consultants DD CD Sub BA BA General Contractor’s activities Construction Manager’s activities Reviewing Authority Owner Pre-construction Activities Sub Construction Administration Management of Construction Management of Construction Program Management Program M a n a g e m e n t • i s the overall planning, co-ordination a n d control of a project or a series of projects from inception to completion aim ed at meeting a client’s requirements in order to produce a functionally a n d financially viable project that will be completed on time within authorized cost a n d to the required quality standards. Program Management Categories of Responsibilities Program M a n a g e m e n t • • • • • • • Project Management Planning Cost Management Time Management Quality Management Contract Administration, Safety Management CM Professional Practice which includes specific activities like defining the responsibilities and management structure of the project management team, organizing and leading by implementing project controls, defining roles and responsibilities and developing communication protocols, and identifying elements of project design and construction likely to give rise to disputes and claims. General Contractor | Construction Manager General Contractor • A firm, group, or individual that contracts with another organization or individual for the construction, renovation, or demolition of a building, structure, or other type of real project (roads, bridges, c a n a l s , etc) Construction Manager • A firm, group like the General Contractor except it prefers different design delivery methods, and a CM agency negotiates the procurement • Often involved during the Design • Increased professionalization of construction is associated with emergence of CM General Contractor | Construction Manager Responsibilities General Contractor (GC) | Construction Manager (CM) • A general contractor i s responsible for the m e a n s a n d methods to be used in the construction execution of the project in accordance with the contract documents a n d for s a f e t y on the site. Responsible for supplying all: • material • labor • equipment, (engineering vehicles a n d tools) • a n d services necessary for the construction of the project Traditional Contractual Relationships & Associated Families of Documents Owner O B101 B102 B103 B104 C401 Consultant A102 General Conditions A101 A102 A103 A107 A401 A C Architect Contractor SC Sub-Contractor Traditional & Recent Contractual Relationships Project Delivery Methods “Project Delivery Method” is a term used to describe a formal, defined way of accomplishing a building (or infrastructure) project. The chosen method will describe the contractual relationships among the major participants, the timing of the entry into the project of each of the participants, the role of each participant, and the manner in which the participants are expected to interact on the project Project Delivery Methods There are many variations of these methods, but most are some version, tweaked or modified, on the following: 1. The traditional method (Design-BidBuild or D/B/B) Design-Bid-Build Design-Build 2. Construction Manager at Risk (CMAR) 3. Construction Manager as agent (CM Agency) 4. Design/Build (D/B) 5. Bridging (really a variant of design/build) 6. Integrated Project Delivery Construction Manager-at-Risk Integrated Delivery Traditional Roles and Contractual Relationships | Delivery Finance & Insurance Architect Engineers Architect’s activities Prog. General Contractor’s activities SD Reviewing Authority Owner General Contractor Consultants DD CD Sub BA BA Sub Construction Administration Management of Construction The traditional method (Design-Bid-Build) • For many years, the traditional method (design/bid/build) was the overwhelming standard. • In virtually all public sector projects, this was the only legal way to organize a project. • Most private sector projects also used this method, perhaps following the example of the public sector. • This method is still in use though to a much lesser extent than previously. • Because of issues that developed in this method, alternative delivery methods have been developed in various attempts to deal with these issues. • You will no doubt be involved in projects employing at least two or three of these methods. • New ideas are always being developed. • This method can be viewed as a baseline for study of other methods that are “alternatives” to D/B/B. The traditional method (Design-Bid-Build) 1. 2. 3. 4. Owner develops a program of requirements Owner selects an Architect Architect hires engineering consultants A/E team develops a design in three phases 1. 2. 3. 5. 6. 7. 8. 9. 10. Schematic Design Design Development Construction Documents (working drawings and specifications) Project is advertised to General Contractors Project is bid Low bidder (GC) is awarded the contract Construction proceeds A/E team monitors performance and reports to Owner A/E certifies payment to the GC and substantial and final completion Traditional Method (Design-Bid-Build) 1. For many years, this was the only way to buy construction in the public sector and it was also popular in the private sector 2. This method is still employed in a great many projects 3. Dissatisfaction with the results of DBB have led to alternative delivery systems, even in the public sector Traditional method (design-bid-build) ADVANTAGES 1. 2. 3. 4. 5. Logical and orderly process, well understood throughout the industry. Thought to reduce the chance for cozy collusion. Easily meets all procurement procedure requirements. There is a direct professional relationship between the Architect and Engineers with the client (User and/or Owner). Contract price set by competitive bidding (or negotiation) prior to the Owner committing to the construction phase. Traditional method (design-bid-build) FLAWS 1. It takes too long and costs too much to get to the point of the Owner being protected with a total construction contract price that can be reasonably expected to hold up within a few percentage points. 1. At the point where bids are received, 80% of the architect’s fee will have been expended 2. If there is a cost overrun at receipt of bids, the options are costly and unattractive 2. Construction contracts are predicated on the drawings and specifications being free of errors and omissions, yet that is humanly impossible. 3. The method a s s umes that architects and engineers have the best knowledge of construction technology and cost effective construction methods, yet that is not true. 1. No involvement of GC or sub-contractors in design 2. Subs actually have the most current knowledge of technology/means and methods Traditional method (design-bid-build) FLAWS (2) 4. Architects are less able to monitor costs during design than others (GCs and sub-contractors) increasing likelihood of cost overruns before guarantee 5. Increasing complexity of buildings and increased use of off-site fabricated components calls for involvement of subs and manufacturers in design 6. Conflict and litigation are common due to financial pressures causing Owners to be caught in the middle between A/E’s and GCs New Delivery Methods • CM • at risk • agency • Design/Build • Bridging/Design Build • Integrated Project Delivery CM at Risk Method of Delivery Finance & Insurance Program Manager (optional) Construction Manager Architect Engineers Architect’s activities Prog. SD Reviewing Authority Owner Consultants DD Sub Sub Sub Sub Sub Sub CD Construction Administration Construction Manager’s activities Pre-construction Activities GMP Management of Construction Pricing & Sub BA **Note: AIA Standard Forms of Agreement exist for all these contracts CM at Risk Method of Delivery 1. 2. 3. 4. 5. 6. 7. 8. Owner develops a program of requirements Owner selects an Architect (often involving an Owner’s Rep or Program Manager) Architect typically has a complete design team assembled before selection Owner, with input from program manager and architect, selections CM. CM is selected on the basis primarily of qualifications, not price Architect commences design CM provides input to design team throughout design process At a pre-determined point (usually), CM provides guaranteed maximum price (GMP) to Owner 9. Most subcontracts are required to be competitively bid 10. Project construction proceeds with early packages being awarded first, such as: 1. 2. 3. Site work Foundations Long lead time elements CM at Risk Method of Delivery 11. While early packages proceed into construction, design team continues to complete the contract documents 12. Some elements, such a s low voltage packages, are intentionally placed last due to rapid changes in technology 13. Design team and construction team continue to work together until documents are 100% (or a s close a s possible) 14. Collaboration continues throughout construction Note: Since the design is completed in packages, 100% documents might never be achieved or might be achieved quite late. A s a consequence, involvement of the design team during construction is critical. CM at Risk Method of Delivery ADVANTAGES 1. 2. 3. 4. Brings CM (Contractor) in early to advise on costs, schedule, materials, methods, and logistics. CM provides periodic cost updates and “Guaranteed Maximum Price” (GMP) statements from around mid-point through completion of Contract Documents. Suited for “fast-tracking” (overlapped design and construction) Saves bidding time CM at Risk Method of Delivery DISADVANTAGES 2. Guaranteed Maximum Price issued on less than 100% Contract Documents are not readily enforceable. 1. Has similar “finger pointing” problem a s in Design-Bid-Build. 2. Often costly for Design Team 3. CM may have conflict with respect to same subs used at same time on other projects. 4. Significant risk is assumed by the Owner (so high levels of trust are important) CM Agency Method of Delivery Finance & Insurance Reviewing Authority Owner Program Manager (optional) Construction Manager Architect Engineers Architect’s activities Prog. SD Consultants DD CD Construction Manager’s activities Pre-construction Activities Subcontractors Pricing & Sub BA Sub Sub Sub BA Sub Sub Sub Construction Administration Management of Construction **Note: AIA Standard Forms of Agreement exist for all these contracts CM Agency Method of Delivery: 1. 2. 3. 4. 5. 6. There is no assumption of risk by the CM All (sub) contracts flow directly to Owner Owner carries much risk No price guarantee until the project is complete Requires a sophisticated Owner Usually involves an unusual building type (complex, one of a kind) 7. Typically would involve a strong trust relationship between Owner and CM/PM 8. Fairly rarely used 9. Sometimes adopted a s a typical method by organizations constantly doing construction (inhouse CM, in effect) Design-Build Method of Delivery Finance & Insurance Reviewing Authority Owner Program Manager* (optional) Design Build Firm with A/E Capabilities Sub Sub Sub Design Build Firm Prog. Sub Sub Sub Pricing & Sub BA SD DD CD Construction Administration *Note: Program Manager Optional…might be included in D/B organization or in Owner organization Typical Design-Build Approaches Finance & Insurance Reviewing Authority Owner Program Manager* GC or CM Firm Architect Engineers GC or CM Firms Prep Architects | Engineers Prog. Consultants Sub Sub Sub Sub Pricing & Sub BA SD Construction Administration DD CD *Note: Program Manager Optional…might be included in D/B organization or in Owner organization Design/Build (D/B) 1. The Design Builder assumes responsibility for both design and construction 2. There is a single contract between the owner and the d/b firm (no contract between the architect and the owner) 3. The D/B entity might be a firm that employs both builders and architects 4. The D/B team is often lead by a builder, with the architect a s a sub-consultant 5. Some D/B projects are lead by architects 6. D/B is good for project acceleration 7. Owner suffers some loss of design control 1. No direct relationship between Owner and architect 2. Commitment on price is often made well before the design is complete 3. Contract give considerable design control to the D/B team Typical Design-Build Approaches ADVANTAGES • Potential for better integration of construction “know how” into design process. • Single responsibility for all aspects of design & construction. Typical Design-Build Approaches DISADVANTAGES • Conflict of interest between the Architect/Engineers and the Owner. • Early loss of leverage for the Owner. • Difficult to have “apples to apples” competition on prices and performance. Typical Bridging Delivery Method Finance & Insurance Reviewing Authority Owner Owner’s Design Cons Program Manager* Design Build Firm Sub Sub Sub Sub Architect of Record Engineers Owner’s Design Consultant (ODC) Prog. Consultants SD BCD Owner’s Program Manager (OPM) CD GC or CM Design-Build Firm Construction Administration Pricing & BA *Note: Program Manager Optional…might be included in D/B organization or in Owner organization Bridging Delivery Method 1. The Owner's Design Consultant (ODC), also referred to as Design Architect or Bridging Architect, carries out Schematic Design (SD) in the traditional manner. 2. The ODC and Owner's Program Manager prepare Bridging Contract Documents (BCD). 3. Proposals received for lump sum fixed price for a designbuild form of contract; contract award; CD authorization. Bridging Delivery Method 4. Contractor's architect/engineers prepare final Construction Documents (CDs) which the ODC and Owner's Program Manager review for compliance with the ODC's design and performance specifications. 5. The Owner has the right to terminate without cause. If the Owner chooses, construction is authorized. 6. The ODC carries out observation of the work. Owner's Program Manager administers the contract on behalf of and acts as the representative of the Owner. Bridging (D/B) Delivery Method Advantages 1. Clearly defines those things that are important to the Owner 2. Has advantage of D/B and traditional 3. Reduces conflict and litigation Disadvantages 1. Requires a clear understanding of process 2. Requirement for two architects is difficult to explain 3. Might take slightly longer than regular D/B or CM at Risk Traditional Roles and Contractual Relationships | Delivery Finance & Insurance Architect Engineers Owner Architect’s General Contractor’s Prog. Reviewing Authority Owner SD General Contractor Consultants DD Sub Sub CD BA Design & Construction & Opearation Interoperation Management of Construction Integrated Project Delivery 1. 2. 3. 4. Single contract among Owner, A/E and Builder Shared risk and reward proportionate to stake Considered most collaborative of approaches Typically, would involve a strong trust relationship between Owner, A/E and CM 5. Fairly new and difficult to compare to other methods (as are they all) 6. Currently primarily a west coast phenomenon Integrated Project Delivery Advantages 1. Motivates cooperation among parties 2. Reduces conflict and litigation 3. Allows project acceleration (fast-track) Disadvantages 1. Not well understood 2. Requires sophisticated Owner 3. Experience among team members is highly desirable 4. Contracts take a long time to negotiate (at least the first time) 5. New….somewhat untested Integrated Project Delivery You will often hear projects referred to as “IPD-ish” or “IPD light”. Generally, what is meant when these terms are employed is that the project is being conducted using a method other than IPD, but an unusually collaborative environment exists on the project. This is inaccurate and can be misleading but also fairly common. IPD as a method always employs a three-party agreement among the owner, the design team and the construction team. In fact, this is the defining characteristic of IPD. Some things to consider….. 1. All methods can succeed, and all can fail 2. People in our industry tend to become comfortable with one method and become proponents of that method to the exclusion of others 3. Most of these new methods are driven by dissatisfaction with previous methods 4. Every project is different and should be considered on its own merits 5. Some of the motivations for change are suspect….serving the interests of one party over others 6. Learning how to work within various methods can be critical…especially for architects 7. All parties are trying to lay off risk 8. All parties are trying to maximize “success” 9. Important to define success at the outset; achievement of program objectives, meeting the original schedule, and meeting the budget are all important 10. Defining project objectives is often (usually) underdone 11. The definition of success probably varies from party to party 12. There is a strong sense currently that increasing collaboration is likely to produce the best results overall 13. Recent studies indicate that the method is less important than the degree and quality of collaboration achieved 14. The degree of collaboration is driven by the Owner’s commitment to collaboration Atlanta Practice Talks II Howard Wertheimer “An Arm-Chair Overview of Project Delivery Methods At Georgia Tech … Pros, Cons & Pitfalls“ 8 | 31 | 2023 Hosted by Ingeborg Rocker & Stuart Romm GA TECH | 5:00 pm – 6:30pm | Reinsch-Pierce Auditorium