Written by Ben Johnson on December 6, 2018
The number of project delivery methods in construction project management is expanding, leaving some confusion over their definitions. Here’s a quick “cheat sheet” explaining the top four methods commonly employed today:
This has been the traditional U.S. construction project management delivery system for many years. After several phases of planning, the owner’s design team completes construction plans and specifications to solicit competing bids from general contractors and their trade subcontractors. The construction contract is usually awarded to the lowest “responsive” bidder for execution of the project. The design-bid-build method leverages market competition, but it can create adversarial team relationships—and the builder isn’t involved until after design is complete.
2. Construction management at risk
To bring construction expertise into the design phase, a construction manager (CM) is engaged to take the general contractor’s role. They may work on an “agency” basis—providing assistance during the design phase and then bidding and managing separate trade contracts held by the owner —or “at risk” with cost liability based on a price negotiated as the design is completed. Either approach provides more collaboration between designers and builders. The agency option can leave the owner with more financial risk; the construction management at risk option can yield some of the conflicts found in the design-bid-build approach.
This approach has a single party contractually responsible to the owner for both design and construction of a project. The design-build entity can take various forms, including an integrated firm, a contractor- or design-led team, a developer or a joint venture. The design-builder encourages early participation by key trade contractors and awards other trade contracts as a general contractor would. The overall project cost structure may not be as transparent unless done on an “open book” basis. Competitive selection of a design-build team should focus first on qualifications and past performance.
4. Integrated project delivery
Some owners have adopted this innovative delivery approach to encourage alignment, collaboration and more efficient processes among all members of the design and construction team throughout the construction project management process. In general, IPD team members share mutual business incentives, risks and rewards for the entire team’s performance relative to explicit goals and objectives. Some IPD projects use multiparty contracts signed by all team members. In many ways, the IPD approach creates a business venture among the owner, designers and builders. There is no single IPD model.
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