Pinnell/Busch: Project Management Consultants for the Design & Construction Industry

By Steve PinneIl, PINNELL/BUSCH, INC.

TRADITIONAL APPROACH -- DESIGN/BID/CONSTRUCT

This is what most public works agencies are using now:

1. Select an architect through a qualifications-based selection process without focus on fees.
2. Design by the architect/engineer with little input on costs and constructability.
3. Bid and award to the low bidder in accordance with state contracting procedures.
4. Construct by a general contractor with inspection and oversight by the architect/engineer or owner.

The primary advantage of the traditional process is that it guarantees competition and generally leads to the least cost. Another advantage is that costs are fixed when the construction contract is awarded, although design errors often lead to unanticipated costs and delays.

One of the biggest disadvantages of the traditional approach is the prevalence of change orders, claims, and litigation. There is also little construction expertise input to the design process, and little control of project cost during design. These problems can be alleviated, however, and litigation can be eliminated - by better management methods and alternative dispute resolution (ADR) techniques.

TRADITIONAL APPROACH WITH PROJECT MANAGEMENT SERVICES

This uses the traditional contracting process, but supplemented with special services for a variety of skills. These skills are provided by independent consultants or as additional services by the designer, if that firm has the expertise or brings in a subconsultant for those tasks. The services are tailored to the needs of the project and can include the following:

• Project Scheduling - from architectural programming through design, construction, commissioning, and move-in. We can identify critical pre-construction activities such a permits and land acquisition that could delay a project. It saves time and prevents delays during design through scheduling and tracking of the design process. For construction, it ensures that the contract duration is adequate, while ensuring completion as soon as possible. During construction, it includes assisting the owner's project manager in review and approval of the construction schedule, tracking of monthly updates, action to avoid delays and expedite progress when problems are encountered, and resolution of delay and acceleration claims.
  

• Cost Management - helps ensure a better quality project for a given budget while avoiding embarrassing over-budget bids and scope reductions. More importantly, it reduces the cost of all projects, while providing more project for the same dollars.
  

• Value Engineering and Constructability Reviews - which reduce project costs while maintaining functionality and to eliminate potential problems and expensive construction features.
  

• Partnering Facilitation - establishes a better job environment where the parties work together to avoid and resolve disputes. Although normally implemented before construction starts, it can also achieve significant successes when implemented midway through a troubled project.

• Mediation and Conflict Resolution - by either an independent third party paid by both parties, or one paid for by the owner, to resolve outstanding disputes
  

• Claims Analysis and Defense - when needed to analyze and help defend an owner from claims.

Project management services on an otherwise traditional project can provide substantial savings in time and cost, while maintaining the traditional contractual relationships.

CM/GC (ALSO CALLED CM/GMP)

In this process, the owner retains an architect/engineer under the traditional process but with the understanding that the design process is somewhat different. Selection of the contractor is negotiated, based on proposals that include contractor fees along with experience, qualifications, past successes, references, and proposed approach on the project.

After being selected, the CM/GC provides cost and constructability input to the designer. Upon reaching 30% design, the CM/GC prepares the Guaranteed Maximum Price (GMP) for the project. This is based on the then-current design documents and performance specifications for items not yet designed. The CM/GC bids the work to subcontractors, generally in an open competitive bidding process.

CM/GC can be very successful, saving both time and cost. One of its primary advantages noted by those owners promoting it is that it practically eliminates claims. On the other hand, however, negotiated change orders may well be substituted for the claim process. Equally important is that you don't have an agreement unless you agree on the GMP for the scope of project you feel is needed.

AGENCY CM

In this process, a consultant/contractor acts as an agent of the owner to procure construction. More importantly, the CM manages the process from planning through design, construction, and move-in. This results in substantial time savings, reduced costs while maintaining quality, and a minimum of change orders and claims. The CM provides overall scheduling and cost management, tracking of progress and corrective action if needed, and works to resolve disputes.

An agency CM often prepares a separate bid package for sitework, foundations and long lead materials. These are usually wrapped into the main construction contract when that is let. Sometimes, however, there is just one bid package, and occasionally there are multiple prime contracts which are maintained throughout the project. In all cases, the construction contract is between the contractor and the owner.

Agency CM can provide most, if not all, of the benefits of CM/GC, including: contractor input to the design process, better scheduling and cost management, fewer change orders and claims, etc. It doesn't have a firm, fixed price until the design packages are complete, but experienced cost estimating and the design-to-cost concepts can prevent unpleasant surprises.

DESIGN/BUILD

!n design/build, the contractor forms a team with an architect/engineer and proposes a firm/fixed price based on preliminary design documents and a performance specification. Usually, all proposers have the same price, which is the budget set by the owner and the proposals are differentiated by the quality of the design, the scope of the work proposed, and the experience and qualifications of the team.

Design/build provides an earlier commitment of funds than any other method. It requires, however, experience with the technique and good performance specifications.

TURNKEY

Turnkey construction is similar to design/build except that the contractor also provides financing and turns over a key to the owner upon completion. Variations of turnkey include design-build-operate in which the contractor also operates the facility for a number of years before turning it over to the owner.