Managing the Project: The Supervisor’s Role Session 1: Understanding Project Delivery Systems

1. Managing the Project: The Supervisor’s RoleSession 1: Understanding Project Delivery Systems An AGC Construction Learning Tool

2. Project Delivery Systems and Contracting Methods • General Contracting • Design-bid-build (Hard bid) • Negotiated • Construction Management • At risk • Agent (not at risk) • Design/Build (and Assist) An AGC Construction Learning Tool

3. Special note regarding public (government) construction projects: • Statutes, rules and regulations vary from state to state and from type of public agency to type of public agency within a state • The following slides are intended to provide a general overview and do not pretend to cover every variation possible An AGC Construction Learning Tool

4. General Contracting Overview • Also known as design-bid-build • Most traditional method • Currently 45% of non-residential construction • Owner contracts separately with design firm and general contractor • Construction contract may be bid or negotiated An AGC Construction Learning Tool

5. General Contracting • Advantages: • If not negotiated, low bid is often sole selection factor • If not negotiated, owner receives best market price • Owner can know fixed price prior to start of work • Scope is defined prior to contractor pricing • Private sector owners can shortlist bidders list • Private sector owners can select a negotiated contractor based upon factors other than price • If negotiated, it is easier to pre-order long-lead items An AGC Construction Learning Tool

6. General Contracting • Disadvantages: • Owner (and possibly designers) are responsible for change orders • Owner often has little power to select contractor on criteria other than price • No input from contractor during design phase • Difficult to pre-order long-lead-time items • Fosters conflict amongst project team members • Overall project schedule is extended An AGC Construction Learning Tool

7. Construction Management (CM) Overview • Can have two forms: • CM at risk (CM may self-perform) • CM as agent (CM typically will not self-perform) • Currently 10% of non-residential construction • Owner contracts separately with design firm, CM and one or more prime contractors • CM contract may be negotiated or selected under Quality-Based Selection (QBS) • CM contract is never bid in the purest sense of the word An AGC Construction Learning Tool

8. Construction Management • Advantages: • Allows for fast-track construction • Owner avoids general contractor markup on major subcontracts • CM input to the design process • Cooperation between design and construction teams promotes value engineering • If CM as agent form, the owner receives all of the benefits of competitive bidding of subcontracts • Change-order management is smoother for owner An AGC Construction Learning Tool

9. Construction Management • Disadvantages: • Owner has multiple contracts to administer, with three the absolute minimum • Some argue that the owner pays double markup for little extra value, particularly if few prime contracts are awarded • Success depends largely upon cooperation and mutual respect of various parties to the project • High level of owner involvement often required An AGC Construction Learning Tool

10. Design/Build (and Assist) (D/B) Overview • Owner contracts with one company for single-point responsibility for both design and construction services • Currently 45% of non-residential construction • D/B contract can be negotiated, selected with QBS or quasi-competitively bid • D/B assist is a variant of D/B in which the owner has a separate contract with the design firm • Architect and/or engineer (A/E) is a consultant to design/builder (contractor-led) unless the A/E is the design/builder (designer-led) or a partner in a joint venture An AGC Construction Learning Tool

11. Design/Build (and Assist) • Advantages • Owner often knows the complete project price before detailed design work begins • Owner benefits from constructor input and management of design phase • Much faster overall project cycle time, as foundation work is often begun before anything else has been finalized in the design • Owner is responsible only for major scope change orders • Owner may still benefit from bidding of subcontractor work An AGC Construction Learning Tool

12. Design/Build (and Assist) • Disadvantages • Owner does not receive competitive bids at the general contractor level • Some argue that quality can be compromised due to lack of checks and balances • Complex procurement process for public (government) agencies may not be a legal option for many • Scope must be well-defined very early in project An AGC Construction Learning Tool

13. Basis for Understanding: Roles and Responsibilities of the Project Supervisor • In a broad sense, the project supervisor has three responsibilities on a project: • Manage tasks (scheduling, planning, etc.) • Manage relationships (motivate, lead, etc.) • Manage risk (safety, documentation, etc.) • How much time and effort is spent in each of these areas is largely a function of project delivery system and team characteristics An AGC Construction Learning Tool

14. Relationships Tasks Risk Basis for Understanding: Roles and Responsibilities of the Project Supervisor • The Performance Profile: The supervisor’s role, or his/her expected performance for managing relationships, tasks and risks, will change on almost every project PROJECT 1 PROJECT 2 Relationships Tasks Risk An AGC Construction Learning Tool

15. Basis for Understanding:Roles and Responsibilities of the Project Supervisor • In the previous slide, the project supervisor’s role is very different for Project 1 than for Project 2 • Project 1 could be a negotiated design-build job with a repeat client and a very experienced project manager and a field engineer assigned to the team • Project 2 could be a “hard bid” project with a public agency and an inexperienced project manager and limited field support due to tight budgets An AGC Construction Learning Tool