project delivery methods: pros and cons · project delivery methods: pros and cons michael kenig...

“Promoting the Value of Georgia‘s Higher Education Environments” Office of Real Estate & Facilities

FOC 2012

Project Delivery Methods: Pros and Cons

Michael Kenig Holder Construction Company

[email protected] October 26, 2012

1


FOC 2012 Typical Delivery Methods

2


FOC 2012 Typical Approaches in GA

Design-Bid-Build

CM at-Risk

Design-Build

DELIVERY METHOD Low Bid

Best Value:

Total Cost Best Value:

Fees

Qualifications Based

Selection (QBS)

Competitive Sealed Bid; Low Bid; Inv. to Bid (IFB)

CM/GC; GC/CM; CMc; ECI

Engineer-Procure-Construct (EPC)

n/a n/a

IPD Not Typical

Not Typical

n/a

Multi-party; Alliancing

Common Nicknames

X

n/a

X

X

X

n/a

n/a n/a n/a

n/a n/a


FOC 2012 OPEN BOOK VS. CLOSED BOOK

Design-Bid-Build

CM at-Risk

Design-Build


Best Value:


Fees


Selection (QBS)




n/a n/a

IPD Not Typical

Not Typical

n/a


Common Nicknames

X

n/a

X

X

X

n/a

n/a n/a n/a

n/a n/a

Closed Book

Open Book



Design-Bid-Build

CM at-Risk

Design-Build


Best Value:


Fees


Selection (QBS)




n/a n/a

IPD Not Typical

Not Typical

n/a


Common Nicknames

X

n/a

X

X

X

n/a

n/a n/a n/a

n/a n/a

1 2 3


FOC 2012

GA: Three “Questions”

1. Closed Book vs. Open Book?

2. If Closed: ITB or Best Value?

3. If Open: CM at-Risk or Design-Build?


FOC 2012

GA: Three “Questions” Discussion

1. Closed Book vs. Open Book?


FOC 2012

To be able to recommend the most appropriate option, experience with going through the thought process of applying the factors outlined in this chapter is essential. It is even better and widely considered to be good practice to use the counsel of a group of trusted advisers who can help to be sure that all the factors and their interrelationships can be as fully evaluated as possible. Your trusted advisors should be experienced not only with going through the thought process of applying the major factors, but ideally are also experienced with implementing all of the different delivery options.


FOC 2012

“Major” Factors

Regulatory/Legal or Funding Constraints

Owner’s Internal Resources

Necessity to Overlap Phases

Ability to Define Scope

Desire for Single Contract


FOC 2012

Design Planning Bid Construction Occupancy

NEED

Traditional Linear Process

Schedule

Design

Planning

Occupancy

Construction

Fast-Tracking Process


FOC 2012

2. If Closed: ITB or Best Value?




Design-Bid-Build

CM at-Risk

Design-Build


Best Value:


Fees


Selection (QBS)




n/a n/a

IPD Not Typical

Not Typical

n/a


Common Nicknames

X

n/a

X

X

X

n/a

n/a n/a n/a

n/a n/a


FOC 2012

3. If Open: CM at-Risk or Design-Build?




Design-Bid-Build

CM at-Risk

Design-Build


Best Value:


Fees


Selection (QBS)




n/a n/a

IPD Not Typical

Not Typical

n/a


Common Nicknames

X

n/a

X

X

X

n/a

n/a n/a n/a

n/a n/a


FOC 2012

“Major” Factors

Regulatory/Legal or Funding Constraints

Owner’s Internal Resources

Necessity to Overlap Phases

Ability to Define Scope

Desire for Single Contract


FOC 2012

NEED

“Fast Tracking” vs. “Warp Speed”

Design

Planning

Occupancy

Construction

Fast Tracking

Warp Speed or Flash Tracking

Design

Planning

Occupancy

Construction

“Design” Risk!!

Schedule! Performance!


FOC 2012 “Other” Approaches in GA?

Design-Bid-Build

CM at-Risk

Design-Build


Best Value:


Fees


Selection (QBS)




n/a n/a

IPD Not Typical

Not Typical

n/a


Common Nicknames

X

n/a

X

X

X

?

? ? ?

n/a n/a


FOC 2012

“Other” Factors Why aren’t these Major?

Size of Project ($)…small $ vs. large $

Type of Project… warehouse, research, office

Type of Construction…wood frame, steel, concrete

Economy…booming period?, recessionary downturn?


FOC 2012 Collaborative

Design-Bid-Build

CM at-Risk

Design-Build


Best Value:


Fees


Selection (QBS)




n/a n/a

IPD Not Typical

Not Typical

n/a


Common Nicknames

X

n/a

X

X

X

n/a

n/a n/a n/a

n/a n/a

Collaborative


FOC 2012

Mike Kenig:

1. Schedule?

2. Place a Value on Collaboration?

a) Ability to define the scope

b) Likelihood for changes (during construction)

NOT, the size of the project!


FOC 2012

Industry Perspectives

24

6th Annual FMI/CMAA Survey of Owners

Global Total Revenue by Project Delivery

(Includes Domestic and International)

0

20

40

60

80

100

120

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Rev

enue

(Bill

ion

$'s)

Design-Build

CM at-Risk

Source: ENR Top 100 Firms Ranking

US Domestic Total Revenue by Project Delivery

0102030405060708090

2004 2005 2006 2007 2008 2009 2010 2011

Rev

enue

(Bill

ion

$'s)

Design-Build- Domestic

CM at-Risk -Domestic


International Total Revenue by Project Delivery

0

5

10

15

20

25

30

35

40

2004 2005 2006 2007 2008 2009 2010 2011

Rev

enue

(Bill

ion

$'s)

Design-Build -International

CM at-Risk -International



FOC 2012

Project Delivery Methods: Pros and Cons

Michael Kenig Holder Construction Company

[email protected] October 26, 2012

31

Source: Construction Users Roundtable (CURT) User Practice #1001

Selecting the most Appropriate Project Delivery Method… Construction Strategy: Selecting Contracting Strategies

• Published by CURT

• User Practice #1001


FOC 2012

2. Analyze project, identify critical factors

Schedule requirements

Scope clarity

Likelihood of change

Level of Risk

Degree of owner control

Relative cost

Local Market conditions

Level of innovation

Concurrent projects

Corporate preferred strategy

Availability of owner personnel

Confidentiality

Specialized Work

Proprietary technology

Source: Construction Users Roundtable (CURT) User Practice #1001

Critical Factors to Consider

project delivery methods: pros and cons · project delivery methods: pros and cons michael kenig...

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