Overview

Clients have several delivery methods available to them when they are planning a project. The five basic types include: Design-Build, Design-Build Development, Design-Bid-Build, Construction Management At Risk and Construction Management As Agent.

Some methods, such as Design-Bid-Build, offer no flexibility once the project is awarded, and delay the start of construction since the project has to be completely designed and developed prior to going out to bid. The bid process itself is a lengthy procedure. A more favorable delivery method is Design-Build since it allows for team dynamics, single-source responsibility, and cost control.

The majority of JJH’s work reflects Design-Build and Design-Bid-Build delivery methods. We are also experienced in Construction Management At Risk and Construction Management As Agent.

Design-Build
Design-Bid-Build
Construction Management At Risk
Construction Management As Agent

The basic delivery methods can include various types of contract methods. Following are definitions for some of the more familiar contract methods.

Contract Methods

Negotiated – The client selects a contractor and negotiates both the scope of the project and the price of the work. Negotiated is used primarily in private work due to public procurement laws.

Hard Bid or Low Bid – This method is utilized by owners when price is the over-riding factor. In low bid, the lowest submitted bid is awarded the project. This is used with the traditional delivery method of design-bid-build.

Cost Plus a Fee – This method provides the contractor with a reimbursement for contractually defined costs and establishes a fee for profit and indirect costs. A Cost Plus a Fee contract may be time consuming and requires that the parties carefully consider important issues such as:
• determining what the reimbursable costs are
• deciding when to set a guaranteed maximum price
• agreeing on a formula and timing for the sharing of savings
• identifying and assigning contingencies

Lump Sum – The contractor provides a price to the owner for services called for in the contract and will receive that price regardless of the actual costs. Lump sum is widely used in design-build when the owner procures the project through competitive means.

Guaranteed Maximum Price – The owner selects a contractor before the project is fully developed so they can work together to define the project more completely. Guaranteed Maximum Price is essentially a hybrid approach combining the cost reimbursement features of a Cost Plus a Fee contract with the cost certainly of a lump sum contract.