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By Duane Craig
October 16, 2017
Getting your project started off right and seeing it through to completion depends on a huge number of correct decisions as well as following best practices. However, the most critical decisions are those you make in the initial planning stages. For better or worse, they will follow you through the project from beginning to end. And, if you didn’t choose well, these decisions will still deliver surprises long after the project’s completion.
Picking the design team and defining the project’s scope make up the critical first steps. Once that is done, the details for design can get started, and it is time to decide on the delivery method and a builder.
Pick the Best Delivery Method
Just because design-bid-build is the traditional way of delivering construction projects, it does not mean it is the best. In fact, the adversarial relationships engendered by DBB often add more stress, cost, and risk to project outcomes. For projects with few unknowns that are using traditional building methods and materials, DBB can at least provide owners with a fixed price contract to start. Whether that price prevails throughout the project depends on many factors you cannot know from the start. Nevertheless, the greater the risks at the beginning, the greater the chance for additional costs.
A wide variety of other delivery methods today makes it possible to fashion a contract appropriate to the unique aspects of the project. The factors you must consider include the project’s size, your own abilities and available time, contractor availability, project goals, project timeline, unique project aspects, and unique project risks.
This important first step of carefully considering delivery methods is often overlooked by owners who simply choose the most common one. Keep in mind, though, that the delivery method you choose will determine how much control you have, and how much you can influence the project outcomes. It will also determine who you can choose from in the field of available contractors.
Pick a Complementary GC
The best general contractor for the delivery method and project type is usually the one with the most experience in both. Of course, they must also have a solid business track-record, a great degree of ethics, and their financial “ducks in a row.” There is also chemistry to consider. Getting into a long-term construction project contract with someone you dislike or don’t feel comfortable with is dangerous. Honest, forthright communication between the two of you is needed to see you through the challenges that lay ahead.
Ideally, your GC will also fit well with your design team, your engineering team, and others who act on your behalf. You, on the other hand, should feel comfortable with the experience of the project managers who work for your GC. They and the superintendents will make daily decisions about the schedule and how things get done. That last thing you want is to be second-guessing decisions that get made three levels removed from you.
Carefully Structure the Contract
The best contracts are fair, and allocate risks to those who have the best opportunity to manage them. To structure contracts any differently is a recipe for expensive legal headaches, projects that devolve into warfare, and serious quality and schedule issues.
A well-structured contract will also anticipate problems. Construction projects do not unfold problem-free. There are too many assumptions and too many participants to expect anything more than controlled chaos. So the contract should address as many potential problems as imagined and specify methods to resolve them.
Faithfully Administer the Contract
A major source of construction disputes is “not administering the contract.” Whether you are ignoring aspects of the contract or reading into it, you are opening up chances for misunderstandings. Before construction gets underway, and after the contract is negotiated and signed, you should set up contract reviews based on project phases. Preferably, the reviews will happen before the phases begin. During reviews, look backward to confirm that everyone followed contractual requirements, and then look forward to anticipate where potential contract issues could arise. Doing it by phases means you will regularly administer the contract, and that you will assess potential problems in light of the most recent information.
If you liked this article, here a few more you may enjoy:
Project Management Guide: Part 3- Project Controls
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