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Reproduction, distribution, display and use of this presentation without written
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© 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.
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.”
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
Priority of constraints:
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
Priority of constraints:
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
Design-Bid-Build (D-B-B)
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.
Design-Bid-Build (D-B-B)
Factors for A/E
Organization / Relations:
– 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.
Construction Management (CM at
Risk) Benefits
Organization / Relations:
– 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
Construction Management (CM at
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
Construction Management (CM at
Risk) Factors
Organization / Relations:
• 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
Organization / Relations:
- 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
Organization / Relations:
– 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
Organization / Relations:
- 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.
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
Greater St. Louis Chapter of CSI
PROJECT DELIVERYMethods and Contracts
“You can get there from here.”