CVNG 1012 Contract Procurement Selection Criteria

D Outridge

The Traditional Method

Advantages of the Traditional Approach
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Completion of design prior to tender provides good time and cost control.

Involvement of the designer throughout the construction process gives

good quality control.

Well established and familiar to all everyone knows how it works.

Extensive provision for client changes and well defined processes for the
evaluation of variations.

Disadvantages of the Traditional Approach

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Can be long-winded. The process is very sequential and efforts to reduce

the overall time frame by tendering on incomplete data tend to lead to an
increased risk of higher prices and time over-runs.

Divided responsibility for design and construction may lead to postcontract disputes over defects. The designer may have limited ability to
assess scheduling and cost ramifications as the design is developed which
can lead to a more costly final product.The approach tends to promote
more adversarial relationships rather than cooperation or coordination
among the contractor, the designer and the Owner.

Limited opportunity for the contractor to input skills and ideas on

constructability issues during the design phase, thus enhancing overall
value for money. May be improved through use of the accelerated route,
but this then poses other difficulties as described above.

The Design & Build Method

Advantages of the Design and Build Method
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Speed of construction.

Single point of responsibility.

Specialisation and know-how.

Certainty of cost.

Continuity.

Improved communications.

Disadvantages of the Design and Build Method

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Not so good where high quality design is required. It has been said that
design and build contracts build down to a price not up to a quality.

Lack of independent advice to client.

Quality control in hands of contractor.

Cost of variations.

The Construction Management (CM) Method

Advantages of Construction Management Method

the CM also provides advisory professional management assistance to the owner

prior to construction, offering schedule, budget and constructibility advice during
the project planning phase. Thus, instead of a traditional general contractor, the
owner deals with a hybrid construction manager/general contractor.

the CM scenario offers the opportunity to begin construction prior to completion

of the design. The CM can bid and subcontract portions of the work at any time,
often while design of unrelated portions is still not complete.

the CM and owner negotiate a guaranteed maximum price (GMP) based on a

partially completed design, which includes the CMs estimate of the cost for the
remaining design features.

Furthermore, CM may allow performance specifications or reduced specifications

to be used, since the CMs input can lead to early agreement on preferred
materials, equipment types and other project features.

Disadvantages of Construction Management Method

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The primary disadvantages cited in the CM system involve the contractual

relationship among designer, CM and owner once construction begins. Once
construction is underway, the CM converts from a professional advisory role of
the construction manager to the contractual role of the general contractor. At that
time, tensions over construction quality, the completeness of the design, and
impacts to schedule and budget can arise. Interests and stake holding can become
similar to the traditional design-bid-build system, and adversarial relationships
may result.

While the fixed GMP is supposed to address the remaining unfinished aspects of
the design, this can in fact increase disputes over assumptions of what remaining
design features could have been anticipated at the time of the negotiated bid.

since a commitment is made to a contractor earlier in the process, a premium is

placed on the proper selection of the CM to provide the best value to the owner.

The Partnering Method

The potential benefits of Partnering to the client of successful partnering therefore are:
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Better value for money.

At least the same level of quality.
Less confrontation and therefore speedier delivery.
Less risk, greater certainty of satisfaction.
Fewer claims.
Less bureaucracy.
Better communications, understanding and tolerance of problems.
Faster construction.
Continuous improvement.

And the benefits to the contractor:

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Increased profit potential.

Less confrontation.
Greater certainty of workload.
Better communications and understanding from clients.

Some problems that can occur include:

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Key personalities fall out, resulting in acrimony.

Client begins to wonder if he is paying too much because of the non-competitive
pricing.
Reducing the risk may affect the competitiveness of the contractor or his ability to
innovate. The contractor becomes too comfortable and reliant upon too few
clients.
The client expects too much, and so becomes disillusioned.
The arrangement fails owing to a lack of understanding by one partner of the
other partners business.