Project Execution Planning And Management: Design-Build, Financial Contract, And Procurement Method

Design-Build Process

Discuss About The Project Execution Planning And Management?

Design-Bid-Build – the design-bid build consists of three different phases where the designing phase, bidding phase and the building phase. The designing phase consists of steps, which corresponds to the creation of the project plan and architectural design of the project (Park & Kwak, 2017).. The owner hires an architect who is given the task of creating the architectural design of the project. If the owner of the project the architect goes on to approves the design produce the bid document that will be the basis on which, the bidding from the contractor will be happening. The requirements of the design has to be met by the architecture to fulfill the criteria of the project objectives (Ramsey, El Asmar & Gibson, 2015). After the bid document is created the document is analyzed and the bidding phase starts. Different contractors come for the bidding auction of the project. They place their bidding for them to buy the tender for the project. After the completion of the bidding the owner along with the architect can either select one of the bidders based on the criteria he had put forward, reject all the bidders or start a new bidding process at a later date. After the complete selection of the contractor the project is assigned to them to work on (Park & Kwak, 2017).. The contractor has to then start collecting all the permits that are required for the completion of the project. The contractor then produces a detailed timeline for the working of the project and delivers it to the owner for successful authorization. The architect hired by the owner works as a representative of the owner and looks after the working of the project timeline and the quality of the project (Ramsey, El Asmar & Gibson, 2015).

Design-Build – In this process, the owner has to hire a general contractor who would look after the working of the project and an architect who would be in charge of the designing and implementing project in a correct manner (Minchin et al., 2013). This project delivery method lacks the process of bidding procedure, which selects the contractor who would be working on the project tender. These type of projects are mainly the act of joint venture or are completed in partnership with the owner and the architecture or the contractor who is given the contract (Minchin et al., 2013).

Financial Contract Types

CM @ Risk – the constructor is provided with a project report during the designing phase or when the design has been completed (Fehling et al., 2014). The constructor is then selected based on the past working experience and the lowest bid set forward by the constructors. The company is then assigned and has to complete the whole project from there forward. The project is approved based on the risks taken by the contractor manager (Fehling et al., 2014).

The three processes has been critically evaluated and the case study has been studied with care. Upon successful evaluation, it has been found that the best project delivery system to select for the given case study would be the design build process. As the construction time line for the case study is 7 years so the design build would be the best method to be used by the construction company. The tender has many risks and has to be completely evaluated by the contractor who has taken the job. The marking score provided in the table above has been provided based on the case study.

Lump sum contract – the contract is of a stipulated amount that is confirmed between the owners of the project and the contractor who has agreed to work on the project (Minchin et l., 2014). The major risks, which will be considered during the execution of the project, will be left for the contractor to resolve. The payment is paid in full with the consideration of over head costs, profit margin and the labor costs.

Guaranteed Maximum Price Contract – this contract is evaluated based on the actual cost compensation of the contractor with the addition of the profit margin of the contractor being added to it (Lee & Rao, 2015). The contractor is responsible for the expenditures that will be applicable for the project completion. If there is a shortage in the funds provided then the owner has to evaluate the project again and then provide the money required for the task (Burr, 2016).  

Cost plus Fixed Fee Contract – the contractor is paid an amount of money and a separate nominal amount for tasks provided by the contractor (Chen et l., 2015). This in turn provides a margin of profit for the contractor to earn an extra amount of money. The expenses which will be calculated based on the work which will be provided by the contractor. The tender is settled only when both the parties agree on the said statement (Chen et l., 2015).

Procurement Methods

The best recommendation for the case study will be to follow the lump sum contract. As the project is of large deadline the owner will be paying the contractor a handful amount of money and will be done with it. The contractor will then have to go on with the project execution plan. The contractor has to work on all the working procedures and complete the task with the best quality. Higher the marking given to a criteria the higher involvement it has in the project execution.

Competitive – the use of fair and ethical method of bidding provided by the contractor who are willing to take up the project (Fong, Avetisyan & Cui, 2014). The process provides a platform for all the different contractors to provide a bid on the tender and acquire it. The process is targeted to provide an equal shareable platform for all contractor to come and get the tender (Fong, Avetisyan & Cui, 2014). This process is helpful for the owner of the project to acquire the best kind of contractors for the work. The interested contractor fill out the form and then places a bid on the tender. The contractor is chosen based on the evaluation of the form-filled out by them and the amount of money quoted by them (Bajari, Houghton & Tadelis, 2014). After the successful evaluation, the owner selects the contractor and is provided with the tender contract. The owner can be of price oriented or can be or best quality oriented. Based on these properties the contactor is chosen. The owner also evaluates the past experience and project delivery before giving the tender (Bajari, Houghton & Tadelis, 2014).

Negotiated – the owner chooses a contractor chooses a specific contractor based on their relation of past working experience on based on the reputation of the contractor (Miller, 2014). The cost to be paid out to the contractor is discussed and if the contractor agrees of the quotation of money then the tender is given to the contractor. The contractor then starts working on the project. If the quotation is not agreeable for the owners then a new contractor is called. This method has been avoided for much reason such as huge amount quotations (Yaqub et al., 2014).

Best Value – the factor of the lowest bidding is not the only criteria that is evaluated by the owner but also the experience of the contractor in working with similar projects (Ballesteros-Pérez et al., 2016). The quality of the work needs to be of high specification and the owner would not settle for less. The selection is made prior to the architectural design of the project. The values of the contractor is to be taken up and evaluated before accepting thee working tender. Due to the following of the procedure the owners has less risk involved in the project completion method. Many working owners for their project have used the system (Ballesteros-Pérez et al., 2016). This has been chosen due to the fact that there are minimum amount of risks to be considered when the work is being done. There is less amount of decision making to be done by the worker and the owners. There is a certain amount of money quotation from the previous experience then the contractor can quote the amount of money (Tran Molenaar & Gransberg, 2016). This would highly eliminate the process of bidding by the contractors for the tender acquisition. The method has been followed by many government agencies who wants to eliminate process of bidding on the project plans.

The recommended procedure to follow for the case study would be the best value method. The recommendation has been provided based on the evaluation of the case study. The quality of work to be provided by the contractor is very high for this project. The price of the project make it to be of cost effective type. The marks has been provided to the criteria based on the case study. The higher the marks provided the more involved the criteria is in the project.

References

Bajari, P., Houghton, S., & Tadelis, S. (2014). Bidding for incomplete contracts: An empirical analysis of adaptation costs. The American economic review, 104(4), 1288-1319.

Ballesteros-Pérez, P., Skitmore, M., Pellicer, E., & Zhang, X. (2016). Scoring rules and competitive behavior in best-value construction auctions. Journal of Construction Engineering and Management, 142(9), 04016035.

Burr, A. (Ed.). (2016). Delay and disruption in construction contracts. CRC Press.

Chen, Q., Xia, B., Jin, Z., Wu, P., & Hu, Y. (2015). Choosing appropriate contract methods for design-build projects. Journal of Management in Engineering, 32(1), 04015029.

Fehling, C., Leymann, F., Retter, R., Schupeck, W., & Arbitter, P. (2014). Cloud computing patterns: fundamentals to design, build, and manage cloud applications. Springer Science & Business Media.

Fong, C. K., Avetisyan, H. G., & Cui, Q. (2014). Understanding the Sustainable Outcome of Project Delivery Methods in the Built Environment. Organization, Technology & Management in Construction, 6(3).

Lee, H., & Rao, S. (2015). Nevada Demonstration Project: Construction Manager at Risk Contracting for Rehabilitation of I-80 Carlin Tunnels in Elko County, NV.

Miller, D. P. (2014). Subcontracting and competitive bidding on incomplete procurement contracts. The RAND Journal of Economics, 45(4), 705-746.

Minchin Jr, R. E., Li, X., Issa, R. R., & Vargas, G. G. (2013). Comparison of cost and time performance of design-build and design-bid-build delivery systems in Florida. Journal of Construction Engineering and Management, 139(10), 04013007.

Minchin, E., Ptschelinzew, L., Migliaccio, G. C., Gatti, U., Atkins, K., Warne, T., … & Asiamah, S. (2014). Guide for design management on design-build and construction manager/general contractor projects (No. Project 15-46).

Park, J., & Kwak, Y. H. (2017). Design-Bid-Build (DBB) vs. Design-Build (DB) in the US public transportation projects: The choice and consequences. International Journal of Project Management, 35(3), 280-295.

Ramsey, D., El Asmar, M., & Gibson Jr, G. E. (2015). Benchmarking the Procurement Performance of Single-Step Design-Build.

Tran, D., Molenaar, K. R., & Gransberg, D. D. (2016). Implementing Best-Value Procurement for Design–Bid–Build Highway Projects. Transportation Research Record: Journal of the Transportation Research Board, (2573), 26-33.

Yaqub, E., Yahyapour, R., Wieder, P., Kotsokalis, C., Lu, K., & Jehangiri, A. I. (2014, June). Optimal negotiation of service level agreements for cloud-based services through autonomous agents. In Services Computing (SCC), 2014 IEEE International Conference on (pp. 59-66). IEEE.

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