What Are The Advantages And Disadvantages Of Design And Construction Contract

A project manager can be appointed by the client (especially if it was an inexperienced client in the construction industry where the majority of clients in the UK fall into this category), in order to help him build up his business needs case for the project development, find alternatives and options that are more suitable in order to achieve his business needs, work out the investment appraisals and risk assessments, choose the most suitable procurement method for the project, select the project team, establish and supervise the performance. An important task the project manager must perform before adopting the procurement method is to approach the client, and understand specifically what does he requires and what the outcomes from the new construction building are, more specifically the objectives and the products of the building. After

Key outputs in this phase are the Projects Requirements definition, the capability and capacity assessment, project delivery strategy and the Project Management plan. The role of the construction/ project manager in this phase is, once project authorized, it is the project manager’s responsibility to implement the project. In terms of the Project Requirements Definition the, the project manager refines and details the project authorization and details what the project is required to accomplish in terms of the products/services the project will deliver and the scope of work that needs to be done. The project manager must provide project team members, corporate sponsors, and other stakeholders with a common understanding of what the project is all about, and is the authoritative reference document that defines the project.

Over the past few years, the construction industry has been changing dramatically. One of the most important stages in the construction management and business management is the planning phase. They share similar two main levels of planning which are the strategic and operational planning. However, business management planning to decide in advance what should be done, and how to do it, when you do and you are done. On the other hand, Construction management strategic planning is to deal with selection on a high level of overall objective of the project, including the scope, procurement methods, schedules and financing options but the planning of operations, including the

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

Fixed-price contracts use a fixed total price for the defined product, service, or result to be provided. The seller has the most risk in this contract type because they are obligated to complete the contracts and they will have to pay financial damages if they do not complete it. In the cost-reimbursable contracts, cost reimbursements are involved with additional fee that represents seller profit. This contract type is flexible especially when the project scope changes. Buyers have the most risk in this contract because it is possible that sellers increase prices and fees in the process. The time and material contracts is a hybrid of the fixed-price contracts and cost-reimbursable contracts. Buyers have the most risk in this contract type because the contracts can be open-ended allowing the sellers to increase the price of materials or services.

The project manager who is also the customer will have total authority in the project as this is a projetized organization. Since this project is not part of a program within the organization there is no defined process for the project. As such the project manager will make decisions on the project management processes used throughout the project.

A cost plus, is a fixed-price contract where the contractor paid for all the allowed expenses to certain limit

Direct contracting is an arrangement between employers and health care providers that circumvents intermediary personnel in order to provide healthcare services at a negotiated fixed rate. With various types of contracts currently being utilized, the approach depends upon the employer and provider negotiations. Direct contracting is considered a cutting edge method toward reducing cost in the healthcare industry. Few may find that there are some disadvantages to direct contracting, for example, the expense and risk a company can accrue may be overwhelming. However, companies such as Boeing and Intel have found ways to make direct contracting successful.

The main purpose of the lump sum payment provision is to reduce the design and administrative costs incurred with the unit price contract (1). The lump sum contract is the most basic form of agreement between a contractor and the STA (1). Here, the STA will estimate the project cost by breaking down the work into several construction pay items and applying current average unit prices. The contractor uses the same method when developing the bid but adds up a contingency to cover for the risks that it bears (1).

The contractor will then sign the written contract agreement documents. The contract agreement is a legal binding document that shows contractual commitment to the

A design and build project allows the low risk factor as for the client has the contractor takes on the risk by offering a fixed cost contract. The web address designbuild-network.com states the original provision for a building cost was around £352m, with total project costs of £757m. A

Client and the contractor have same priorities. Basically, contractor will make the decision in turnkey approach and client will just accept in silent. In this project, the contractor and the client have the same focus and priorities therefore the relationship between the contractor and client is good and there is no overruns or communication problems between both sides.

terms of time can be managed in this scenario, as there is no specific delivery

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.

Design and Build – The contractor is single point responsibility with the contractor, where they put across a design with a tender and if they are successful they win the tender.