PROJECT DELIVERY - cdn.ymaws.com

1This presentation is protected by US and International copyright laws.

Reproduction, distribution, display and use of this presentation without written

permission of the speaker and The Construction Specifications Institute is prohibited.

© CSI 2020 www.csiresources.org

PROJECT DELIVERYMethods and Contracts

“You can get there from here.”

The Construction Specifications Institute is a Registered Provider with The American

Institute of Architects Continuing Education Systems. Credit earned on completion of

this program will be reported to CES Records for AIA members. Certificates of

Completion for non-AIA members available on request.

This program is registered with the AIA/CES for continuing professional education.

As such, it does not include content that may be deemed or construed to be an

approval or endorsement by the AIA of any material of construction or any method or

manner of handling, using, distributing, or dealing in any material or product.

Questions related to specific materials, methods, and services will be addressed at

the conclusion of this presentation.

Learning Objectives

• To understand the 4 basic project delivery methods

• Learn the basic structure of AIA contracts

• Understand the benefits and limitations of each method

• Identify the challenges to A/E performance with each method

• Review recent trends in construction delivery

Continuing Education Resources

• AIA "Project Delivery" search at www.AIA.org (video and articles)

• AIA Handbook of Professional Practice; Ch. 9 & 17

• CSI Project Delivery Practice Guide, 3rd Edition. Ch. 7

• Whole Building Design Guide; www.Wbdg.org

What is the CDT?

• Study in the preparation and execution

of Construction Documents

• Taken from the CSI Project Delivery

Practice Guide

• An exam

• A Professional Certification

• A prerequisite for advanced CSI

Certifications

Who pursues a CDT?

– Owners

– Designers (Architects/Engineers)

– Contractors (including subs)

– Suppliers

– Manufacturer’s Representatives

CDT benefits?

Increases your confidence in understanding the

design and construction process

Raises the confidence of clients by

demonstrating your knowledge

Differentiates you from others by your

achievement of Certification.

Assists in preparing for the Professional Practice

A.R.E

Search "CDT" at www.csinet.org

8This presentation is protected by US and International copyright laws.






Where is “there?”

...misunderstanding of

contractual obligations continue to

be a primary cause of disputes.

“Global Construction Disputes Report 2019, Arcadis

It matters how you get there.

What is Project Delivery?

• AIA: “a process that allocates

roles and responsibilities...”

• AGC: “the assignment of

responsibilities, establishing

performance, building trust”

• CSI: “..sets contractual

relations in a sequential

process from project

conception to completion.”

What is Project Delivery?

• the design and construction

process that

• assigns responsibilities

• sets performance requirements

and conditions

• by a sequence of procedures

• in the form of a written contract

Selecting a delivery type

Owner influences on selection

Experience with a type of construction

Risk assessment

Use of planning specialists:

Programming

Scheduling

Estimating

Funding

Not always a choice PublicFunding from taxation

Method controlled by law

Pre-qualification

Public / Private Partnerships

PrivateFunding from capital, loans

& donors

Individuals

Private Institutions

Developers

Businesses

Advance Preparations

Project Conception / Description

Owner team formation

– Owner's experts

– CM or contract advisors

– Planning Professional

Clarify program / constraints

Establish budget

Select project delivery method

Hire Design Architect

Project Delivery factors affecting A/E

• Organization

– Selecting team members

– Establishing quality control /

workplan

• Execution

– Design

– Production of construction

documents

• Quality Assurance

– Communications

– Coordination of documents

– Administration during

construction

– Extent (scope)

– Cost

– Time

Delivering a balance

The main choices

Design – Bid - BuildB101 (Architect-Owner), A201 (Owner-Contractor), A101 (General Conditions)

Construction Manager at Risk or CM as AdvisorB133 (Architect-Owner with CM), A133 ( Owner-CM), A232 (General Conditions-CM)

Design – BuildC141 (Consultant – Owner) for concept design, bridging documents), A141 (Owner -

Design Builder), A142 (Design Builder – Contractor), A143 (Design-Builder – Architect)

*DBIA No. 535 (General Conditions)

Integrated Project Delivery IPDB195 (Multi-Party Agreement), A195 (Owner-Contractor IPD), A295 (General Cond.)

Defining the elements

Extent (Scope)

Defined by...

Magnitude

Form

Function

Complexity

Simple:

limited extent of work, simpler documents, fewer team members, and a more linear sequence of short duration

Complex: (small or large):

Many diverse elements, phased documents, many teams, specialties, bid packaging, scheduling challenges.

“Fee accordingly”

Cost

Decided by...

– Stipulated / Lump sum (traditional)

– Cost (of the Work) plus a fee

• Fixed percentage of construction

• Service fees (Advising, multiple contracts)

• Guaranteed maximum price (GMP)

• "Soft costs" are planning, design or advisory fees.

• "Hard" cost to buy labor and materials

Cost controls

– Penalties, incentives

– Unit pricing, allowances, alternates

– Contingency funding

Time

Time (duration & sequence)

“Time is of the essence”

expressed in:

Specific date(s)

Duration (calendar or working)

Sequencing of Activities:

Linear or Concurrent (overlapping)?

Scheduling

"Fast –Track"

Not a delivery method, but a technique

Separates work into multiple contracts

Based upon project scheduling

Ensures completion in a condensed period of time

NOTE!

» A/E may be involved in design, construction documents,

contract packages, bidding, negotiation, and contract

administration simultaneously.

Pre-Qualification

"IDIQ" Indefinite Delivery, Indefinite Quantity

For multiple projects of simpler scope

Aimed at retaining A/E services over time

Can use any delivery method to build

Allows flexibility to local Owners using public funds

"MATOC" Multiple Award Task Order Contract

Federal and Military

Aimed at retaining Contracting services

The Structure of Contracts

Tripartite Relationship• The essence of any Project contract is between three parties

AIA Contracts

Design-Bid-Build Family

Design-Build Family

Construction Management Family

Integrated Project Delivery Family

Basic provisions (AIA Contracts)

Article 1. Definitions: Basis of performance and changes

Article 2. Define the “Work”

Article 3. Time. Start and End dates

Article 4. Cost of the Work

Article 5. Forms of payments

Article 6. Dispute resolution

Article 7. Termination provisions

Article 8. Special provisions (insurance, bonds, etc.)

Article 9. Renumerate the (binding) documents

Article 10. Signatures

Conditions of the Contract

• Defines basic rights,

responsibilities, and

relationships of parties

involved in performance

of Contract. Read it!

• Inherent part of (most)

Owner-Contractor

Agreements

• Follows the same order

of provisions / topics as

the Agreement.

3

0

Conventional contract roles

Benefits of standard contracts

Familiarity of use across A/E/C industry

Standard order and location of provisions

Standard use and definition of terms

A balance of roles, rights and responsibilities

33

Important Legal ConceptsContracts are standardized, but projects are unique

• A/E obligations extend beyond their contracts:

– Professional Standard of Care

– Compliance with codes, laws and regulations

• Professionals are NOT

required to be perfect,

but contracts include “remedies.”

– Change process

– Termination

– Financial recompense (Damages)

Putting it together

Facility Types SimplerOne Function

Single building system

Limited services

Limited specialites

Fewer trades

Few constraints

ComplexMultiple functions

Multiple materials &

systems

Highly specialized services

Diverse trades

Cost & time controls

Parking GarageResearch &

Development

Office

Sitework

Single system

SimplerConcrete frame

Lighting, drains

Elevators

Priority of constraints:

Extent (# of cars)

Cost (per stall)

Time

Parking Garage

Familiar construction

ModerateConcrete foundations, Steel

frame, light gauge studs

Typical MEP + IT

Multiple Finishes

Common floor plan


Time (relocate staff)

Extent (least s.f.)

Cost

Office Building

Corporate Identity

ComplexSteel, Concrete, Curtainwall

Sustainable Design

Multiple labs and uses

Security, Data Networks

Phased build-out

Alternate energy

Specialized equipment

Extensive planning

Main constraint: Extent

Research &

Development

Infrastructure

ModerateUnderground services

Earthmoving

Plantings

Site design


Time

Cost

Extent

Sitework

Tripartite Relationship• The essence of any Project contract is between three groups

Project Delivery factors for the A/E

• Organization / Relations

– Selecting team members

– Establishing management

procedures

• Execution

– Project design

– Production of construction

documents

• Quality Assurance

– Meetings

– Communications

– Coordination of documents

– Administration during

construction

Design-Bid-Build (D-B-B)

Extent:

Limited complexity best, but all project types

Single contract

Cost:

Advance Estimating can be detailed

Competitive pricing, but less freedom to negotiate

Cost is fixed, known quantity

Lowest tolerance to changes

Time:

Linear sequence of events

Historical Familiarity, delays better understood


Benefits

Organization / Relations:

Familiarity across participants

Owner has greater control, can develop trust in A/E.

Execution:

Linear sequence of documents

Better client agreement of scope

Architect is main influence in design

Quality Assurance:

Fuller document coordination possible

Fewer cost controls needed

Architect – Contractor communications limited.


Factors for A/E


– Inherently adversarial

– Client experience level may not match

Execution

- Document coordination & completion are critical

- Contractor entitled to rely on documents

- Redesign a real possibility to meet budget

Quality Assurance

– “Bid Day Surprise” when bids exceed budget

– Unknowns cause more changes, numerous RFIs.

– Owner has no input on quality of subs or management of work.

– A/E Duty to adminster project is higher.

Design-Bid-Build (D-B-B) Limitations

Facility Types

Parking Garage

D-B-B

Research &

Development

Office

D-B-B

Sitework

Construction Management, CM at

Risk (CMc)

Click to add text

Extent:

– Typically used for complex projects needing cost controls

– CM’s advanced knowledge decreases Owner risks with:

• Coordination of construction / constructability

• Cost management

• Time management

• Quality controls

• Safety (I.e. Owners liability)

Execution:

– CM’s provide services beyond A/E’s basic services.

– Earlier CM involvement influences on A/E's design activities

– Documents prepared in stages, longer work plan. Some backtracking

– Greater opportunity for Owner input and agreement

– Team communications may improve to potentially lessen change orders

Construction Management (CM at

Risk) Benefits

Time:

– Typically CM have expertise in Fast Tracking sequence

– Delays lest costly overall due to overlapping activities

– Long lead items taken into account earlier

– Owner's long range planning can be more effective.


Risk) Benefits


– Some competition with Owner's attention.

– Need additional layer of A/E leadership to coordinate with CM

Execution:

– Earlier involvement / assistance to A/E during design activities

– Documents prepared in stages, longer work plan

– Greater opportunity for Owner input and agreement

– Team communications improved to potentially lessen change

orders


Risk) Factors for A/E

Quality Assurance

- Communications can be more open, less adversarial

- Schedules can be completed with greater accuracy

- Cost management can aid material choices, fewer surprises

- Document coordination becomes a team effort

Trends

- "Design Assist:" Earlier involvement of CM with cost / constructibility advice

- A process similar to "bridging documents" in Design-Build during project schematics

but uses Suppliers and Specialty Contractors to provide design input and pricing,

including early shop drawings.

- CM's are proposing limited General Conditions to control overhead management

expense


Risk) Factors


• Not typically suitable for simpler, one contract projects

• Owner surrenders some control for added expertise

• Owner often pays more in professional fees

Execution:

• Document control more challenging with multiple contracts

• Disadvantage for project no time constraints

• Additional layer of authority can reduce efficiency and communication

Quality Assurance:

• Potential exists for conflict of interest in CM cost control vs Owner needs

• CM may limit A/E communications with Owner, causing undue

compromises

Construction Management

(CM at Risk) Limitations

Facility Types

Parking Garage

D-B-B

CMc

Research &

Development

CMc

D-B-B

Office

D-B-B

CMc

Sitework

CMc

Owner with CM as Advisor (CMa)

CM Advisor

Extent:

- Suitable for simple to moderate complexity, especially remodeling.

- Design of higher quality with tolerance for customization.

Cost:

- Negotiated pricing common.

- Use of contingencies to avoid change costs.

- Design Options used to verify best cost approach.

Time:

- Multiple overlapping Contracts. Shortened duration possible

- Contracts can be released with partial information.

Owner-CMa

Benefits


- A/E relationship with Owner may be limited.

- Owner has total control over project, and risk.

Execution

- Lengthy development phase must be carefully managed

- Documents plan should include creating alternates

- A/E risks increase the more contracts are issued on partial docs

Quality Assurance

- Early cooperation with pricing exploration is main advantage.

- Contractors get to know extent and expectations better.

Owner-CM as Advisor

Factors for A/E


– Significantly more risk to Owner, CM signs no contracts

– No recourse for errors and omissions

– A/E risks increased with customization and specialties

– Owner may limit A/E administration services

Execution:

– Document completion still critical, but heavier reliance

on delegated design

– Owners do not typically have trained staff to perform

construction or administer jobs. But use 3rd parties, not A/E.

– Owner-CMa pay CM significant fees to manage multiple

contractors.

Owner-CMa

Limitations

Quality Assurance:

– Heavier than usual reliance on contingencies

– Shortened time leads to quality compromises along way.

– Conflicts arise on apparent cost overruns from incomplete

information.

– Not always clear what is included or excluded in negotiated

prices. Gaps in scope.

– Communications are compromised.

– Limiting A/E administration of contract is common.

– Financial commitment without knowing final costs

Owner-CM as Advisor

Limitations

Facility Types

Parking Garage

D-B-B

CMc

CMa

Research &

Development

CMa

CMc

D-B-B

Office

D-B-B

CMc

CMa

Sitework

CMa

CMc

Project Delivery

Design-Build (D-B)

Option: Owner

contracts direct with

A/E, and creates

“bridging

documents”

Extent:

- "Forces" Owners to use advance planning

- Single contract with one entity

- Favors Simpler design and allows for scaling up extent

- Allows for Owner flexibility even when price is a priority

Cost:

- Cost controls as builder-designer are non-adversarial

- Bridging documents reduce risks.

- Subcontract pricing can still be competitive

Time

- Linear sequence, but may achieve overall project time reduction.

Design-Build

Benefits


- A/E role is bridging documents, limits risk.

- A/E still has influence on design and construction

- Owner has input up front, relying on DB for cost control.

Execution:

- Fast-track scheduling is an option

- Document preparation is linear, close to conventional

- Design-builders can often handle specialized services

Quality Assurance:

- Coordination is closer between Design-Builder and A/E

- DB takes responsibility for subs. Can use negotiation or other

methods to achieve results.

Design-Build

Factors for A/E

Execution:

- Preparation of project description may be difficult for Owner

- Increased risk for design-builder

- Less protection for Owner by A/E since he works for Contractor

- Documents may be less detailed and material selections

made be left to design-builder

Quality Assurance:

- Owner required to administer compliance with contract.

- Contract & dispute resolution may take longer

Design-Build Limitations

Facility Types

Parking Garage

D-B

D-B-B

CMc

CMa

Research &

Development

CMa

D-B-B

D-B

CMc

Office

D-B

CMc

D-B-B

CMa

Sitework

CMc

D-B

D-B-B

CMa

Campus

CMa

Integrated Project Delivery (IPD)Model of an Effective Team

• Mutual respect

• Open, direct communications

• Mutual benefit and rewards

• Collaborative innovation and

decision making

• Early involvement of key

participants

• Early goal definition

• Intensified planning

• Appropriate technology

• Organization and leadership

65

Project Delivery

Integrated Project Delivery (IPD)

All parties engaged, shared goals

Trends

� Materials and systems are becoming

more complex and specialized

� Specialty contractors contribute earlier.

� Advance pricing becoming contractual.

� Informal (no responsibility)

� Design-Assist (may take

responsibility)

� Delegated Design (must take

responsibility)

Mixing of methods

Where is “there”:

• Methods that provide mutual benefit

• Recognize and quickly resolve project difficulties

• Suppress short term self-interest for good of the project.

Contract delivery methods

that balance the influence of

the project conditions are

the basis of successful

projects.

As seen in a perfect world

Questions?

6

9

7

0

This presentation is protected by US and International copyright laws.




Greater St. Louis Chapter of CSI

