Construction

Contracts
(CN-323)
Dr. Nida Azhar

Design-Bid-Build (DBB)Project Delivery Method

Design-Bid-Build (Traditional) Process

Typical Organization of
DBB

Salient Features of DBB

Role of each party clearly defined
Rigid and formal procedures are usually followed in
forming contract
This is the only method in which owner has firm idea of
the final cost of the project prior to construction phase.
Brokerage is when general contracts all the work on
project
DBB often extends the project duration
Owner doesn't have agent or friendly party involved in
the contractual agreement.
Less emphasis on quality to maintain low cost
Adversarial relationship between different parties.
Exposes owner to a greater probability of claims

Salient Features of DBB

As design is developed with contractors input there
are fewer changes due to design error.
Disputes arising between design and construction
firms are essentially eliminated
It is possible to start construction to begin before
completion of design
It is accomplished by designing the foundation first and
then developing the design as construction commences

There are fewer checks and balances built into this

process
Owner has lesser control
Laws and regulations may place serious restrictions
on the process.

Self-Performance Method

Worker

Worker

Owner

Archite
ct

Worker

Worker

Worker

Design-Build (DB) Delivery

Method
Single firm designs and constructs the building
(design- constructor or turnkey construction
cost plus
lump sum

Salient Features DB
Utilizes the construction firms experience in the
design phase
Higher degree of constructability
Contract can be awarded through competitive
approach (if scope is well defined).
Contract is generally established as a target cost
or guaranteed maximum price (GMP).
It is common to be written as a cost plus fee with
a GMP.
In public sector, owners prefer to keep all the
savings when the cost is below GMP.
On a private project, different mechanisms for
sharing the savings might be explored

Construction Manager as the

Owners Agent CMAA
Method
Also known as Professional Construction
Management Method

Salient Features CMAA

Owner hires a firm with construction expertise to
perform construction management
During design phase, CM periodically reviews the
design to see how the cost and time of the project
can be reduced.
Value Engineering is most cost effective during
design phase before any monetary commitments
have been made to construction.
CM payment may be based on flat fee, an
incentive payment method or cost plus a
percentage fee.

Construction Manager at Risk CMAR Method

Salient Features- CMAA

CM is an independent contractor
CM is at risk and responsible to owner to
complete the project by the established
substantial completion date and within the agree
budget.
CM expertise can be utilized during early phases
of construction.
Value Engineering can be effective.
Contract is generally established as a cost plus
fee with a GMP.

Fast-Track Project
Scheduling

The Integrated Project Delivery (IPD) Method

Intended as a fully integrated system for project
delivery

trust-based
collaborative
zero-blame
zero-litigation

Reduces waste in labor and materials

Technology for IPD Building Information Modeling

(BIM)

In an IPD method,
all stakeholders in
the project, such as
the owner, architect,
architects
consultants, general
contractor, and
subcontractors
contribute in
constructing the
virtual model.

Conventional vs. IPD