Contract documents

August 30, 2023

Undertaking a construction project is a complex endeavor that requires careful planning, strategic decision-making, and effective execution. One of the critical decisions in the early stages of a construction project is selecting the most suitable project delivery method. The project delivery method plays a pivotal role in determining how the project will be organized, managed, and executed. This article aims to provide a comprehensive guide to choosing the best construction project delivery method, considering various factors and options available to project owners and stakeholders.

Understanding Project Delivery Methods:

Project delivery methods are frameworks that define the roles, responsibilities, and relationships among the key parties involved in a construction project. They influence the project’s timeline, budget, risk allocation, and overall success. There are several project delivery methods to choose from, each with its own advantages and disadvantages. The four primary categories of project delivery methods are:

1. Design-Bid-Build (DBB): In this method, the project is divided into separate phases – design, bidding, and construction. The owner first hires an architect or designer to create project plans, which are then put out to bid. Contractors submit bids, and the lowest qualified bidder is awarded the contract.
2. Design-Build (DB): Here, the design and construction phases are combined into a single contract. The owner hires a design-build team, usually consisting of a design firm and a construction company, to handle the entire project from inception to completion.
3. Construction Manager at Risk (CMAR): The owner hires a construction manager during the design phase to provide input on constructability, cost estimation, and scheduling. The construction manager then takes on the role of the general contractor during the construction phase, assuming responsibility for project delivery and managing risks.
4. Integrated Project Delivery (IPD): IPD is a collaborative approach that involves all key stakeholders – owner, architect, contractors, and suppliers – working together from the early design stages to project completion. This method promotes open communication, shared risk, and joint decision-making.

Factors to Consider When Choosing a Method:

Selecting the best project delivery method requires a thorough evaluation of various factors to align with the project’s goals, complexities, and constraints:

1. Project Complexity: The complexity of the project, including design intricacies and technical challenges, can influence the choice of method. More complex projects may benefit from collaborative methods like Design-Build or IPD.
2. Budget and Cost Control: Different methods have varying cost implications. Design-Bid-Build can lead to lower initial costs, but Design-Build and CMAR may offer better cost control due to early contractor involvement.
3. Timeline and Speed: If time is of the essence, methods like Design-Build and CMAR can expedite the construction process due to their overlapping design and construction phases.
4. Risk Allocation: Consider how risks are distributed among the parties involved. Design-Build and CMAR methods allow for risk sharing between the owner and the contractor, while DBB places more risk on the contractor.
5. Quality Control: Methods that promote collaboration and early involvement of contractors can lead to better quality control and fewer change orders.
6. Owner’s Involvement: Owner’s Involvement: Some owners prefer a more hands-on approach, while others seek a more streamlined and collaborative process.
7. Experience and Expertise: The familiarity of the project team with a particular method can impact its successful implementation.
8. Legal and Regulatory Considerations: Different delivery methods may have varying legal and contractual requirements.

Conclusion:

Choosing the best construction project delivery method is a critical decision that directly impacts the project’s success. Each method has its own merits and challenges, and the optimal choice depends on the project’s unique characteristics and goals. By thoroughly evaluating factors such as project complexity, budget, timeline, risk allocation, and stakeholder preferences, project owners and stakeholders can make informed decisions that lead to efficient, cost-effective, and successful construction projects. Whether opting for a traditional approach like Design-Bid-Build or embracing more collaborative methods like Design-Build or Integrated Project Delivery, a well-chosen project delivery method sets the stage for a smoother and more successful construction journey.

AIA Contract Documents has provided this article for general informational purposes only. The information provided is not legal opinion or legal advice and does not create an attorney-client relationship of any kind. This article is also not intended to provide guidance as to how project parties should interpret their specific contracts or resolve contract disputes, as those decisions will need to be made in consultation with legal counsel, insurance counsel, and other professionals, and based upon a multitude of factors.