In our last e-Bits we told you about our client that hired PDMi to manage his capital project. At our kick-off meeting we reviewed the following standard Delivery Methods to determine which one best fit his project.
Design-Bid-Build. With this method, the Owner enters into a contract with a Professional Architectural/Engineering firm for the design. After a competitive bidding process, bids are analyzed and a contract is executed with the low bidder. The following are true about this method:
- Cost: Known after the design is complete
- Schedule: Linear/Sequential
- Relationships: Based on lowest Bidder
Construction Management. With this method, the Owner enters into two agreements for services. One with a Professional Architectural/Engineering firm for design based on using multiple Prime Contractors. The other is with the Construction Manager to manage the Prime Contractor process. The CM agreement can be “as agent” (Owner has contracts directly with Prime Contractors and assumes risk & rewards) or “at risk” (CM has contracts directly with Prime Contractors and assumes risk & rewards). The following are true about this method:
- Cost: Known after the design is complete
- Schedule: Simultaneously/Overlapping
- Relationships: Negotiated team
Design/Build. With this method the Owner enters into one contract to provide both design and construction. The following are true about this method:
- Cost: Established during the design process
- Schedule: Versatile/Fast Tracked
- Relationships: Trust but verify
Our client chose the Construction Management “as agent” method. His project was on a very fast track and he felt like this method gave him the best chance of completing the work on time and within budget. Different methods work for different projects and there is not a one size fits all. Give me a call and we can talk more about the truths of each method and see which method would best fit your next capital project.
In our next e-Bits I will unpack Contract Methods and the one after that we will look at the sequencing of Planning, Designing, and Implementing a project, in the meantime- Stay Tuned for the Rest of the Story…
A client of ours has been a tenant in a facility for years. Due to the “Up-Tick” in the economy he decided it was time to purchase a building and be his own tenant. He called us and said “As much as I would like to manage the capital improvements required for this building, I know what I don’t know. I recognize I have no experience in managing a design and build project and my time will be best spent doing what brings me income – my business”. With that said he hired PDMi to manage the capital improvement project.
Our first advice to him was to do three things:
- Determine which Delivery Method would be best suited for his project.
- Decide which Contract Method makes the most sense financially for him and his lending institution.
- Layout the sequence of Planning, Designing, & Implementing all the pieces and parts that make up the project.
In the next upcoming “e-Bits” I will unpack each of these and share how they impacted our client’s project. If we can help you plan your next capital Improvement project, give me a call, in the meantime- Stay Tuned for the Rest of the Story…
At a conference I was attending, I heard a speaker say “People mostly know what they are doing and how to do it, but they often do not know why”. This may be generally true on issues we face in our lives daily, but it made me stop and think about whether this is the case with facility projects. Our experiences show that many of our clients know why they need to expand their facilities or build new ones, what they do not know is what to do and how to do it. This is where the specific process of Planning, then doing the Detail Design, then doing the Construction comes into play.
When facing a facility project you need to answer the Why – What – How questions, in that order.
- WHY: The why question is answered during the Planning Phase of the project. The answer to the why question gives purpose to the project.
- WHAT: The what question is answered during the Detailed Design Phase of the project. The answer to the what gives definition to the scope and quality of the project.
- HOW: The how question is answered during the construction phase of the project. The answer to the how gives organizational context to the project.
When the process of Planning (the Why) then Detail Designing (the What) then Construction (the How) is followed you can be assured that your facility project will be a success. Give me a call; we would look forward to helping you answer these questions on your next project.
Batman & Robin – Night & Day – Salt & Pepper, these are all things that go together. They fit. One complements the other. It is the same with Design & Build, one completes the other. Too often today design and build are regarded as adversaries. They separately compete for the approval of the owner and/or the success of the project. This should not be! Just like Batman was not complete without Robin, the design of a project is not complete until it is built.
There are many benefits to the Owner when Design and Build are combined on a project. They include:
- A Team Relationship is established between the Design Professional and the Contractor which is built on trust and confidence.
- The Scope of the project is identified through the contract documents so that Cost and Schedule can be identified/verified/modified early in the process.
- The Design Professional becomes a Valuable Resource to the Builder during the construction process as the Builder was to the Designer during the document phase.
The Old Days of adversarial relationships which were formed by Architects/Engineers drawing blueprints for the Contractor to competitively bid must be reevaluated. If we, as Professionals and Contractors, desire to bring the best product to our clients then we must learn that Design and Build fit together.
Contact me about how PDMi’s Design Build team can bring value to your next project.
Have you ever been driving down the street and made a left hand turn only to come to the realization that you are headed east and all the oncoming traffic is headed west? In other words, “You are going the wrong way!” I am going to admit that this has only happened to me once (or maybe twice – but not more than three times) in my many years of driving. When this occurs multiple emotions come over you. Emotions like: fear that a head on collision is about to happen, embarrassment of being in the wrong place and the general feeling of stupidity. There are many absolutes in this world, even though we many times do not recognize them or choose not to follow them. One of them is driving the right direction on a one-way street.
You have heard the old saying “They did what seemed to be right in their own minds”. We have had some clients over the years that have applied that saying to their facility projects, but we have also had many clients that have not. One of our clients, that did not want to go the wrong way, called me last week. He said that they had been approached by a developer that wanted to purchase a portion of their site for future development. He admitted the easy answer to the developer would have been sure, we are not using all our land and we could use the money from the sale. Instead, the client took a step back and asked the questions; how much land do we have, how much land will we need for future expansions and how much land could be sold? The call to PDMi was to help them answer these (and many more) question before they responded to the developer.
Please give us a call so we can help you “go the right direction” on your next project.