CONTRACTING METHODS

Which One Is Right For You?

By Mark Cladny, On Site Systems

CONVENTIONAL LUMP SUM

DESIGN/BUILD

NEGOTIATED GENERAL CONTRACTOR

CONSTRUCTION MANAGEMENT

 

CONVENTIONAL LUMP SUM

Lump sum competitive bidding is regarded by many as being the customary contracting method which yields the best competitive price for the job. In this method the project owner or developer hire an architectural firm to design the project and administrate the construction. The architect must be accessible and available to the builders, preferably on the project site, to clarify the documents and advise on problems once discovered. The architect has prime responsibility of reporting budget and schedule information to the owner in a timely manner so that adequate funds are available to complete construction. The architect typically administers the changes to the project and must therefor have adequate skills to negotiate price and schedule effects. Many times an adversarial relationship can develop, since typically the architect and contractors position early for later claims. The responsibilities for issues are foremost in the discussions and often much time and energy is spent on building cases rather than resolving conflicts.

There are many factors which determine if this method is suited to a project. They include:

  1. Is there a requirement to have lump sum competitive bidding due to public or internal policy concerns? Do these policies preclude other contracting methods?
  2. Have plans and specifications been developed by an Architect and related consultants that exactly depict the project requirements? With the competitive nature of the architectural industry, many architects and designers have come to rely on previously generated details and "canned" specifications, without thoroughly modifying them to depict the current project.
  3. Has sufficient time and resources been allocated to produce and final design prior to the start of construction?
  4. Does the owner or architect possess the expertise to issue partial documents and coordinate the design and construction process to allow concurrency of design and construction activities by the issuance of bid packages?
  5. Have the budgets and financing allowed consideration for the expected amount of scope and non-scope changes? Scope changes are ones regarded as different from the bidding documents due to any number of issues, including:

On Site Systems provides construction management and consulting services on an as needed basis including:

Construction Management | Owner Representation| Pre-Construction Planning | Construction Administration | Claims Management

On Site Systems Home Page | Who We Are| Construction Cams