Contractual Relationships in Construction

  • Owner has separate contractual relationships with the architect and engineer.
  • A/E stands for Architect Engineer.
  • In building projects:
    • Architects or engineers typically work under the architect.
    • For projects like bridges or roads, engineers work without an architect.
    • Full design is completed before contractors bid.
  • Example: Most state Department of Transportation (DOT) work follows a design-bid-build approach.
    • The West Approach Bridge North project is an example of design-bid-build.
    • Seattle Department of Transportation projects generally follow this model.
    • Example of cost: Northeast 43rd Street improvements project cost $2,680,000.

Design-Bid-Build Process

  • Design is completed before bidding begins.
  • Owner selects design consultant to create a design, based on specific parameters.
  • Completed design goes out for competitive bids.
  • Contractors submit bids based on the same design plans and specifications.
  • The owner selects the contractor with the lowest bid.

Competitive Bidding

  • Competitive bidding is common for selecting contractors but rare for selecting designers in the U.S.
  • Designers are typically selected based on qualifications and negotiated prices, rather than bids.
  • The selection process involves:
    • Owners creating a shortlist of design firms based on qualifications.
    • Interview process to determine the best fit.
    • Negotiation of design prices after selection.

Construction Phases

  • Design-Bid-Build Method:
    • Owner has contracts with design and construction firms.
    • Prime contractor manages overall construction.
    • Subcontractors are hired for specialized tasks.
  • Construction Management (CM) Method:
    • Owner contracts a CM to oversee construction.
    • Two types of construction management:
    • Agency CM: Acts as the owner’s representative; owner still contracts directly with design and construction firms.
    • At-Risk CM: Takes on risk of construction; owner does not contract directly with builders.
  • General Contractor Construction Manager (GCCM) is a special form of CM at risk:
    • Selected during early design phases to provide input and assist in construction management.
    • Acts as both CM and prime contractor when construction begins.

Example of GCCM

  • The University of Washington used GCCM for the Burke Museum project.
    • Contractor input can help optimize design for buildability and cost efficiency.
    • Cost estimates are provided while the design progresses.

Design-Build Method

  • Involves a single contractual relationship between owner and design-build entity.
  • Design is not fully completed before construction may begin, as designer and builder are the same entity.
  • Example: State Route 99 Tunnel and 520 Portage Bay Bridge projects.
    • Skanska won a $1,375,000,000 contract for the latter project, with AECOM as the designer.
  • Subcontracting can still occur, where the design-build firm hires other firms for specific tasks.

Advantages and Disadvantages of Design-Build

  • Advantages:
    • One point of responsibility simplifies communication and coordination.
    • Potential for a faster schedule due to overlapping design and construction phases.
    • Better risk management as the contractor manages both design and construction risks.
  • Disadvantages:
    • More complex contracts.
    • May lead to less owner control over the project details.
    • Perception of decreased fairness due to lack of competitive bidding for price.

Public-Private Partnerships (PPP)

  • Projects may utilize private entities for financing, design, construction, and maintenance.
  • Varieties of PPP include:
    • Design-Build-Finance
    • Design-Build-Operate
    • Design-Build-Maintain
    • Design-Build-Finance-Maintain

Comparison of Project Delivery Methods: Advantages and Disadvantages

  • Design-Bid-Build
    • Advantages:
    • More owner control over both design and construction.
    • Well-known process; provides familiarity to all parties.
    • Perceived fairness in bidding.
    • Disadvantages:
    • Longer project schedule due to sequential nature.
    • Higher likelihood of disputes between designer and contractor.
  • Construction Management
    • Advantages:
    • Good for owners lacking time or expertise.
    • Better input from contractors during design.
    • Disadvantages:
    • Additional costs to hire a CM.
    • Complex relationships can arise between parties.
  • Design-Build
    • Advantages:
    • Faster project delivery; single point of contact.
    • Improved coordination between design and construction.
    • Disadvantages:
    • Complex contractual arrangements.
    • Less owner oversight of design specifics.

Example of a Design-Build Project: 520 Portage Bay Bridge

  • The project is a design-build, competitively bid, best value selection, and stipulated sum project.
  • Skanska responsible for both design and construction.
  • Engineer estimates costs factored into overall bidding process.

Procurement Process for Complex Projects

  • Projects generally follow a two-step procurement process:
    • Initial request for qualifications to determine interested parties.
    • Shortlisting selected firms before requesting proposals to minimize bidding investment.
  • Technical issues and qualifications are highly scrutinized during the evaluation process.

Bid Results and Analysis

  • Noted significant differences between engineer's estimates and actual bids by contractors.
  • High costs can be attributed to the complexity and size of projects, leading to tight bidding environments.

Overall, understanding these project delivery methods is crucial for effectively managing and executing construction projects, as each method carries specific responsibilities and implications for all stakeholders involved.

Conclusion

  • Knowing the project delivery methods will help in determining the best approach for future infrastructure and construction projects.