WHY DOES CONSTRUCTION MANAGEMENT MAKE SENSE?
- Allows for “BUDGETING” to meet the Customer’s Budget prior to placing trades out for bids.
- Should the initial cost estimate be over or below the Customer’s budget, it allows for “Value Analysis” to reduce costs & affords the Customer the opportunity to make upgrades & purchase at bid prices.
- Provides a “CHECK & BALANCE” system between the contractor & architect. (The contractor can advise the Customer &/or Architect when a more economical design could be utilized & when construction documents may be lacking certain required information. Conversely, the Architect can review the progress & quality of the work that the contractor performs).
- Increase the “QUALITY” of the project, as it allows the Customer, Architect & Manager team to solicit bids from pre-qualified subcontractors.
- Provides for a “LESS LITIGIOUS & ADVERSARIAL” relationship, as the Contractor acts as an extension & agent of the Customer.
- The Customer has more “CONTROL” as a Construction Management Contract allows more flexibility for modifications & revisions to the design.
- The Customer can select the “BEST CONTRACTOR” for the project as it can solicit Request for Proposals (RFP’s) & select the successful Contractor based on the criteria it establishes.
Construction Management/Pre-Construction Services
- The Customer can select the best Contractor for the Project.
- Provides a strong checks & balances system between the Architect & Contractor during design.
- Provides for timely preconstruction & budget input by the Contractor.
- Provides accurate budget input, system evaluation & value engineering.
- Breaks down bid packages to develop maximum competition & quality.
- Costs savings revert back to the Customer.
- The Contractor has the Customer’s interest foremost when dealing with subcontractors.
- The Customer’s budget is established during preconstruction.
- The Customer exercises “total control” of the project & can make changes in a non-adversarial format.
- The Contractor monitors ADVANTAGES OF CONSTRUCTION MANAGEMENT:
the schedule and cash flow to the advantage of the Customer.
- The Contractor works for a “fixed” fee.
- Allows the project cost to be verified & guaranteed prior to the Architect completing design documents.
- Allows the Customer an opportunity to make changes once the project cost is fixed.
- Allows for an early start of construction (fast tracking) and subsequent savings in escalation and time.
DISADVANTAGES OF LUMP SUM GENERAL CONTRACTING:
- Does not guarantee the lowest cost. General Contractor’s interests are the opposite of the Customer’s.
- Costs are not defined until built.
- There is no preconstruction input.
- Overalll project duration is longer due to the sequential process.
- No control by the Customer.
- Assumes that all General Contractors are “Created Equal”.
- No savings are returned to the Customer.
- Assumes that a perfect set of documents are prepared by the Architect.
- Customer has to work with whoever the “Low Bidder” is and has no say in the selection of the contractor.
