Who's the Boss
Provides early cost estimating & value analysis, completes project scheduling, assists with contract negotiations, manages multiple construction contracts & fast-track construction, makes early material purchases & gives, in some cases, guaranteed price & completion date
Construction Manager as Adviser
Owner pays actual cost of construction (direct & indirect costs) plus a fee that is agreed on before construction begins & the CM guarantees a maximum price; if the project is completed for less than this amount, the client receives the cost savings
Cost+fee with GMP
Agreement between Owner and Design-Builder
AIA Document A141
Temporary association of two or more people to achieve a project.
Used by multiple architects for a large project.
Set up through a formal agreement process
Treated like a partnership but cannot be sued.
Joint Venture
total indirect expenses/ total direct labor dollar
Overhead Rate
Single source of responsibility
Team works together for best value
Fixed Price early in the process
Generally lower costs
Total design/construction time is less.
Design-Build
Construction process is allowed to begin before design process is completed; possible because architectural & engineering documents are issued in stages, often through bid packages
Fast-tracking
General Conditions of the Contract for Construction
A201
partners share in the management, profits, and risks of the business.
Income is shared and reported on personal tax forms.
Each partner is personally liable for business debts and liabilities.
all liquid assets/liabilities. Measures firm’s ability to meet obligation. The higher the better. 1.5 is healthy business. 1.0 is barely making it.
Current Ratio
Construction manager is part of the contracting firm, which has a single agreement with the owner concerning the construction management services as well as the construction services provided
Construction Manager as Constructor
Specialty subcontractors or trades are included early in the design and construction document phases to help with the development of complex or unique portions of the building
Design-Build Contracting
Standard form of Agreement between Owner and Construction Manager as Advise
AIA Document C132
Formed like a partnership
Not a separate entity like a corporation.
Those who invest are members and those who manage, managers.
Non-Member can be a manager (unlike partnerships)
Members have no personal liability
LLP or Limited Liability Company
net operating revenue/total direct labor
Net Multiplier
Establishing a GMP before all details, specifications, & drawings are complete puts this party at risk
CM at Risk
All participants collaborate closely from the projects earliest conceptualization to move in. Owner has multiple agreements with independent design and construction firms
Integrated Project Delivery
Contract Administration and Project Management Forms
AIA Document G-series
Association of individuals that exist as a separate legal entity apart from its members
Goverened by state
Taxed lower than individuals but taxed twice
C Corporations
total cost of operations / money spent on direct labor
(2.3-2.5 range)
Break Even Rate
-once contract is signed, owner has less control over design & construction
-May be disagreements about what should be included in the design
- entity in charge has control over quality of materials & construction methods used & may substitute lower-quality, less-expensive materials to stay within budget
Cons of Design-Build
1. Transitional forms
2. Multi-party agreement
3. Single purpose entity
Ways of establishing contractual relationships for IDP
Combines the advantages of the traditional design-bid-build process (someone to represent the owners interests throughout the process with a fixed cost) and the design build approach (a single source responsibility for construction)
Bridging
Does not retain profits, allocated income and losses directly to shareholders who report losses/profits on personal federal tax.
Limited to small businesses
S Corporations
Indirect expenses/direct labor (1.3-1.5 is good)
Overhead rate