Planning & Delivery Systems Construction Engineering 380 Engineering Law.

Planning & Delivery Systems

Construction Engineering 380

Engineering Law

Planning and Delivery

• Quality, speed, and cost form the management triangle of construction (and other design and delivery systems)

cost

timequality

Balanced job

time

cost

quality

Time constrained job


• Project constraints affect choice of planning and delivery system

• Business judgment, engineering judgment, and legal judgment are all involved in the management triangle, and decisions must be made with an understanding of risk, project goals, and constraints


• Direct legal controls- registration, licensing, award process, standards, claims process

• Indirect legal controls- loss of efficiency, contract and control ambiguity, cost of collection, risk management


• Contract award– Public contracts- usually competitive bid

process of some kind– Private contracts- market governed

• Contract pricing– Fixed price (lump sum)

• Risk is with the contractor• Contractual method for increasing price of contract• Allows owner to better plan financing IF the plans

and specs are sufficiently complete & coordinated


– Cost (Cost plus) contracts• Beneficial when design conditions are uncertain or

incomplete• Can be a problem for financiers of the project• No incentive for designer or contractors to manage

cost• Can put in a guaranteed maximum amount (G-Max

or GMP) and a cost-savings split option• Jobs are usually open book• Value engineering- is a gray area because of

intellectual property issues and bid-shopping


– Unit price contracts• Used when material estimates are impossible or

unreliable (soil excavation, remediation, asbestos)• Good for repetitive work easily categorized• How to handle “general conditions” needs to be

addressed• Can be combined with other forms of contracting

(for instance, LHI on development projects)


– Allowances• Set a fixed amount for certain categories of work to

be included in the contract but final choices have not been made (used frequently for equipment and finishes)

• Variances are handled through change orders• Must spell out net vs., gross, and how shipping,

OH, and other related costs are handled


– Contingencies• Unallocated money set aside in a contract for

uncertainties and other unforeseen (latent) conditions.


• Traditional delivery– Design and construction are separated– Design-bid-build sequence– Wider range of design possibilities– (theoretically) better quality control– Contractor left out of the design process– Adversarial relationships develop– Cost “designed-in” early, hard to fix


time

$

Cost of changes

Cost of design


• Early design decision fix cost parameters and constrain subsequent decisions

• Construction Management- three party contracting

• Design-Build- single party contracting

• Fast-tracking (design-assist)

• Multiple Primes

• Turnkey contracting (land, financing, eq)


• Partnering and teaming– Becoming more formalized– Set goals and expectations– Develop trust and commitment to the project– Build, operate, transfer– Build, operate, own

• Privately financed infrastructure• More common in lesser developed countries with

insufficient capital for water systems, sanitation

Planning & Delivery Systems Construction Engineering 380 Engineering Law.

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