Project Delivery Methods For Distinct Allocation Of Risk And Responsibilities Within A Construction Contract Essay

A basic definition for the procurement is “the way the building is realised” and “involves assembling and organising the skills and services of a team of construction professionals”. (the Construction Round Table, 1995). More precisely, the construction industry describes procurement as “a system that establishes the roles and relationships which make up a project organisation”; hence the overall organisation and communication structure for the management, administration and control of a project is established by the procurement system. (D.C.H Coles, 2010)

This document serves the purpose of critically analysing the differences that exist between managing construction projects and I.T Projects

The time frame alloted is an overall period of 2 years in which only 14 months is alloted for the construction processes. So CM at risk would be a better option since a construction manager can be appointed early on in the design phase and he can work closely with the client’s professional team and even offer advice on the project.

In this method, the design and the construction roles are combined into a single responsibility and the team is referred to as the Design Build Contractor. The architect is under contract to the contractor and not the owner. The advantages of this method are that the owner is dealing with one contract for the design and construction and does not get involved in the details of the design and construction. The design can be accomplished according to the budget and easily be changed if necessary. Since the maximum price is set in an early stage, this method is faster than the design-bid-build and the construction manager method. However, there are drawbacks to this approach. Since the architect and contractor report to the design/build firm, a conflict is created between the owner and the design/build firm. Also, as the design and construction roles are part of the same team, this can lead to a disadvantage. As the owner is no longer dependent on the architect, the architect’s judgement is no longer provided to the owner and this leads to quality control problems. (what I think if this is the best method or

1. Name and briefly describe each of the two basic types of competitively bid construction contracts. Which type would be most likely used for building the piers to support a large suspension bridge. Why?

In construction projects, mostly the firms (in this case the firms become client) do not have the skills or develop skills inside the firms to undertake the projects due to amount of the projects should be conducted or the complexity of the projects (Reve and Levitt, 1984). Therefore, the economic decision to conduct the projects is to procure them to third parties. However, more commonly the client agonize the final quality of the projects will meet standard requirements. Thus, impacts to involvement of complex contracts of construction procurement.

Choosing construction management as a procurement strategy means the client is responsible for leading the

Construction projects can be extremely complex and fraught with uncertainty. Risk and uncertainty can potentially have damaging consequences for the construction projects. Therefore nowadays, the risk analysis and management continue to be a major feature of the project management of construction projects in an attempt to deal effectively with uncertainty and unexpected events and to achieve project success. Risk is inherent on construction projects and disputes frequently arise. One in four construction projects results in a dispute that leads to arbitration or litigation. With large scale, complex projects the likelihood of serious, time-consuming and expensive claims increases.

Within a project, the project’s success and budget belong to and are the responsibility of the customer. The Customer should have the final say in regards to what is acceptable and unacceptable in regards to risk and the quantification of risk. It is however, the contractor’s responsibility to be the primary source of expertise on a project or what they are being contracted to do. The contractor should offer their opinion and recommendations, and the customer should take their contractors opinions and recommendations seriously due to their expertise in the area. Overall, collaboration between the customer and the contractor should be the ultimate way to resolve a matter of dispute. Members from both the customer and contractor side should meet discuss historical events, modeling and simulation to arrive at the appropriate answer. Also, with quantifying risk, the customer and the contractor should be able to go back and look at the data. With risk quantification, there should be very little room for opinion and judgment which should make it easy to base a decision or a resolution based on hard core data. If a solution or an answer is not able to be decided upon, a third party consultation

There are several types of construction delivery. The most used in contract of the construction is traditional lump sum. Traditional lump sum methods of handling project are the most common method used in construction projects in Malaysia. Based on Frederick and Nancy (2000) in this method the owners would hire a professional in the design to provide the design, including complete contract documents. This types of contract usually used when the work is small and straightforward, for example project with well-defined scope of work or project where the different of condition site is minimal and didn’t risk for the future problem. The Lump Sum itself called because the contractor needs to submit all total price

Risk allocation is performed as part of the development of the project structure, which takes into account the distribution of responsibilities and risks during the planning, construction, financing and operating phases (Corner, 2006). The aim is to identify an efficient and effective structure that optimises the costs of the project and ensures that the risk occurrences do not damage the project (Delmon, 2009). According to Grimsey and Lewis (2007) risk allocation has two elements: optimal risk management and value for money. The first implies that the

1. For the following types of undertakings, which contract modes are most appropriate? Be prepared to explain the rationale behind your choice.

The research takes a case study approach. The case study analysis dwelt on risk management by Contractors who work on energy and utility construction projects, including strategies and supporting structures for managing risks, complete with an analysis of how these strategies and structures are implemented and supported by the Contractors resources base. The researcher specifically chose utility contractors for this study as the Energy and Utilities sector play an indispensable role in the global economy and in the UK, industry employs around 2% of the UK workforce (AGCAS, 2012). Moreover, the UK government identified the Utilities companies as companies that are heavily involved in risky incidents affecting their sector thus playing a crucial role in the preparation and planning for emergencies responsibilities (UK Government, 2013). According to Yip (2003) construction is risky as it almost always certainly involves loss of time and money. Above all, any denial of service during outage result in impact on communities (Lindman, 2008) and utility services are no exception. Against this background, it could be argued that contractors working on construction projects undoubtedly play a significant role in managing risks in order to stay in business.

Another ‘fast track’ strategy where work can be carry out before the design is complete. Construction manager is appointed in early state may benefit to the client. For this strategy, client have direct contract with the trade contractor. Same as management contracting, the final cost for the project can not be identified until the final work has been awarded.

For this assignment the writer is going to discuss the nature and types of construction contracts and will explain the legal responsibilities of the various parties involved in the design and the construction process.