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Text Box: Project Delivery Systems

 

 

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Text Box: BENCHMARK's Project Management delivery system utilizes the Design-Bid-Construct delivery method.  Project Management allocates resources, shapes priorities, coordinates interactions with customers and users, and generally keeps the project team focused on the right goal. The project manager also establishes a set of practices that ensure the integrity and quality of project artifacts.    This is separate from the Construction Management in both who does it and what they actually do.  Project Management provides total oversight on all aspects of the project, including design, budgeting, overall project target schedule, bidding out contracts, contractor coordination, invoice verifications, budget tracking, schedule tracking, change order resolution, punch list completion, and contractor’s contractual obligations.    The Construction Management performed by the Builder (general contractor) manages the day-to-day construction site, materials delivery, construction staffing, work load, safety, and specialty contractors construction activities.  The Project Management acts as an independent Owner’s Representative to ensure a coordinated, on-time and on-budget project delivery, and ensures that the owner’s needs and quality are met.    The whole premise of BENCHMARK's Project Management delivery system is the break the project down into manageable and controllable components that can be designed, modified, cost controlled, put on hold or even eliminated if the owner wants.    CONSTRUCTION MANAGEMENT (CM, CM at Risk): In the last 10 years or so, Construction Management has changed its definition and now has two general meanings in the construction industry:  1. It is a field of study generally covering the managerial and technological aspects of the construction industry. 2. It is a type of project delivery system whereby a "construction management" company serves as a construction consultant (to the owner), providing both design (typically in the architect/engineer purview) and construction advice (typically in the construction company's purview).  Typically, the construction industry includes three parties: an Owner, a Designer (architect/engineer), and the Builder (general contractor or constructor). Traditionally, these three parties work together to plan, design, and construct the project. In construction management, an additional party is engaged to act as an advisor to all three parties. The role of the construction manager is to provide construction advise to the designer (assuming that the designer needs such advice), and design advice to the constructor (again assuming the contractor needs such advice). In addition, the construction manager may provide and purchase some of the materials, and some of the subcontracts thus acting as a Builder (general contractor).   In BENCHMARK's Project Management delivery system allows the owner controls the budget through the bid process.  This allows the owner to modify, deduct or add to the project as necessary based on bid prices, and savings realized are a direct cost savings to the owner.   The truth is both project delivery systems (CM & Design Build) have a guaranteed maximum price (GMP) called the budget, the only question is who gets to know the real costs of the project and control the spending of the budget.       DESIGN BUILD: The most common project delivery system from the contractor is the Design-Build concept that acts to group everything together into one bundle.  The Builder (general contractor) will control all aspects of the project (architectural & engineering design, budget, schedule, construction management, work tasks, invoices, materials, labor, contractors & subs, and specialty items, and final cost of the project).  The owner only has to sit back and wait until they turn over a complete project then pay the bill.  The design build objective is to produce a final complete project for a base price with a guaranteed maximum price, GMP.  In the Design-Build system, the Builder (general contractor) who is performing the design build gives a base price and a guaranteed maximum price (GMP), but still has to follow the same process of design, bid and construct.  Since the general contractor has to bid  the job out (get pricing) to subcontractors (including the planning & design), and the Builder (and the subcontractors) cannot know the final pricing until they have a design to price.  So the initial base price of the design-build from the Builder must have a built in percentage of contingency to ensure his base price guess will not be below the final costs of the project.  Then when the Builder has all the costs from the bids, any savings from the bids are kept by the Builder as profit since the design build project has a base price and a guaranteed maximum price and the owner does not know or have any control of the final costs other than the GMP.   In BENCHMARK's Project Management delivery system the Owner has the cost advantage for specialty project components (certain work items that can only be performed by a specialty contractor that only does this work i.e. fencing, landscaping, field turf, light towers, running tracks, gym floors etc.) that can be broken out of the Builder's general construction bid and bid directly to the specialty contractor.  The Builder (general contractor) cannot perform this type of work and will only hire the same specialty contractor and mark up the contractor’s price (15% to 30%).  In the design build process, every contractor and subcontractor (including design) has their costs marked up by the Builder (general contractor).  This inherently inflates the entire design build price up 15% to 30%.   VALUE ENGINEERING: Lastly, Builders (general contractors) provide a great service called Value Engineering.  It is true that contractors do have a good understanding on construction practices and methods that can save time and money, since they are building every day and becoming more efficient.  Design-build stresses this ability since the contractor is in ultimate control of the entire project (design, scope, budget & schedule), but again any savings are typically absorbed as general contractor profit since the owner has no real cost controls.    In BENCHMARK's Project Management delivery system, we have value engineering as well, performed by the Builder (general contractor) or any contractor on the job.  In our case the value engineering is submitted with or after the bid, where it is evaluated to ensure that the design is not compromised in any architectural or engineering manner, and then we can issue a change order deduction to lower the contractor’s bid/contract price since the contractor will not have to spend as much money to accomplish the job; the owner gets to keep the savings provided by the Builder’s value engineering.                      

 

 

 

 

 

 

 

 

 

 
 

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