What Construction Delivery Method Is Right For Me?

General Contracting

  • Both the Design Team and the General Contractor are individually accountable to the Owner.
  • Once bids are received, the Owner contracts with the lowest responsible General Contractor. The General Contractor awarded the project in turn contracts with his or her lowest responsible bidding Trade Contractors.
  • General Contracting typically results in highly aggressive pricing results due to competition among the bidding General Contractors.
  • General Contracting does not allow for contractor input during the design phase on project planning, scheduling or budgeting.
  • This linear design – bid – build process oftentimes means a longer schedule duration than other construction delivery methods.
  • The price is not established until bids are received from General Contractors; as a result, the schedule may be lengthened if bids exceed the budget and re-design and re-bidding are necessary.

Construction Management

There are two forms of Construction Management agreements:

Construction Manager as Constructor

  • The Construction Manager becomes involved early in the project’s design process to consult on constructability and to perform budgeting and scheduling services.
  • The Construction Manager as Constructor delivery method is also known as Construction Manager at Risk
  • Contracts are between the Construction Manager and Trade Contractors
  • The Construction Manager is responsible for Trade Contractor performance (similar to that of a general contracting agreement)
  • The Construction Manager is responsible for monitoring the budget / schedule / project cost
  • Construction Manager fees are typically based on their level of risk
  • There are two types of Construction Manager as Constructor contracts:
    • Guaranteed Maximum Price: The Construction Manager guarantees the price of the project. Fees for this type of agreement are commensurate with the risk level for guaranteeing that price.
    • Cost of Work + Fee: The Construction Manager charges a fee percentage based on the cost of the work. Because there is less risk for the Construction Manager in this arrangement, fees are lower.

Construction Manager as Advisor

  • The Construction Manager becomes involved early in the project’s design process to consult on constructability and to perform budgeting and scheduling services.
  • The Construction Manager as Advisor delivery method is also known as Construction Manager as Agent.
  • Contracts are between the Owner and the Trade Contractors.
  • The Construction Manager acts as an “advisor” to the Owner as it relates to the Owner’s management of those contracts.
  • Because the Owner holds each of the Trade Contractors’ contracts, it is imperative that the Owner has the administrative capacity to process each contract, any changes that could occur during the course of the project, as well as the project close-out process.
  • The Construction Manager is responsible for monitoring the budget / schedule / project cost.
  • The Construction Manager as Advisor does not guarantee the cost.
  • The Construction Manager as Advisor fees are typically less than those in a Construction Manager as Constructor agreement.

Design/Build

  • Contract is between the Owner and a single entity: the Design/Build Team. This results in a single source of accountability for the duration of the entire project.
  • Design/Build project delivery is ideal for a project under tight schedule circumstances. This is because construction scheduling for the project can begin before the design is finalized. Additionally, bid time is reduced and potential construction issues that could occur in the field are typically uncovered and mitigated earlier in the process.
  • Owners entering into a Design/Build agreement should have a well-defined scope and concept prior to selecting their Design/Build Team to capitalize on schedule benefits.
  • Design/Build project delivery is most effective for Owners with smaller decision-making committees or for Owners that foresee minimal mid-course design changes.
  • In a Design/Build agreement, the Owner receives a comprehensive design and construction project cost early in the process (as opposed to the traditional design-bid-build method where the Owner must wait for bid results).