Project Delivery Systems (PDS) are the ways which projects can be contracted and the assignment of risks. Olicon offers many options to its customers. This allows the owner to tailor the contract responsibilities, risks and how the costs will be accounted for, to fit their needs.
Lump Sum Contracts
These contracts are used primarily in a competitive bid situation, when the owner has engaged design services and has plans ready for bidding and construction.
Cost-Plus Contracts
These contracts provide the owner with the assurance of the costs on the project. These contracts may have a “guaranteed maximum” costs and usually stipulate the percentage mark-up and reimbursable costs that the contractor may charge.
Construction Management
This delivery method is broad based and can range from “no risk” to “at risk”. The construction manager may act as the owner’s agent, providing oversight for another contractor, a role that would be very similar to that of a cost-plus contact.
Fee and General Conditions
This system allows the owner to select a contractor before plans are completed, or even started, allowing the contractor to be a vital part of the project team. The contractor will provide pre-construction services ranging from estimating, scheduling, due diligence reporting, and value engineering.
In this PDS, the contractor stipulates the percentage of markup for overhead, profit, insurances to be applied to all project costs throughout the project, as well as the general conditions that will be charged for the determined construction schedule.
Design-Build
Traditionally, the “master builders” who constructed the world’s classic architecture assumed total accountability for construction projects, from architectural design all the way through the building process. More recently, however, this project delivery method has been supplanted by what is, ironically enough, called the “traditional” method, or the “design-bid-build” method, in which a building contractor bids on a project based on construction documents that an architect has already completed with little or no input from construction professionals. Too often, the result is bids that exceed the budget and unclear or contradictory construction documents. The ensuing “value engineering” process can devolve into a mere cost-cutting exercise in which the architectural design integrity suffers as much as the owner’s pocketbook.
There is an alternative these days, though. In the “design-build’ approach, the construction process is simplified and returned to its roots. As design-builders, Olicon offers a multi-disciplinary single source for all construction-related services. This translates into multiple benefits for our clients, not the least of which are substantial savings in time and money. In fact, it has been estimated that design-build has the potential to save customers 5 to 10% in hard costs and 20 to 30% in time on construction projects [1].
This is accomplished by integrating all design and construction skill sets under one roof, resulting in a streamlined process from conceptual design through the completion of construction. This high level of integration virtually eliminates surprises during construction, allowing Olicon to guarantee the maximum cost on every design-build project while typically achieving an earlier completion date. Offering a single, expert source on all aspects of design and construction saves our clients many headaches and makes for a far more enjoyable project development experience.
[1] “Design-build alternative to regular bidding can save time and money,” by Brad Carlson; Daily Record and the Kansas City Daily News-Press; May 26, 2006.