Project Delivery Methods

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What are project delivery methods?

The delivery of a construction project is a complex process involving a number of parties. The parties involved are owners or developers (commonly known in the industry as 'principals'), architects, engineers and other consultants and main builders (known as 'contractors') and their subcontractors and suppliers.

Project delivery methods are the methods used to take the design and construction of a project from its conception to its completion and handover to the principal.

Through an understanding of the different project delivery methods an informed decision can be made as to which is the best method for a particular project. Appropriate contractual arrangements can then be adopted.

Choosing the right project delivery method for a project will not guarantee success, but it should go some way towards avoiding disputes and time or cost blow-outs.

The main project delivery methods

There are a number of different methods of delivery used in the construction industry.

The following methods are 'traditional' and commonly used:

  • construct only (also known as 'fully designed' or 'fully documented')

  • design and construct


Construct Only

Overview

The principal engages:

  • first, design consultants to prepare a complete design (drawings and specifications) for the project; and

  • secondly, a contractor to build the project in compliance with that design.

This is considered to be the delivery method with the lowest risk for contractors and is a popular delivery method for small scale projects on domestic buildings, commercial buildings and infrastructure work.

Construct only is the most appropriate delivery method to use where there is little value to the owner for the construction contractor to be involved in the design process, particularly where the design is not complex.

Advantages

  • A very well known and understood method.

  • The principal retains control over the design.

  • Low risk for the contractor – only responsible for construction, not design.

  • Well established standard form contracts are available.

Disadvantages

  • The principal does not gain any design input from the contractor, which diminishes opportunities for cost saving and value (eg no buildability input from builder).

  • Preparing the full design before engaging a contractor may increase the time taken for the whole project compared to other delivery methods.

  • The principal does not have a single party responsible for both design and construction.

  • If the design has errors or inconsistencies, the contractor may be entitled to extra time and money over and above the initial contract sum as a result of variations.


Design and Construct

Overview

The principal engages:

  • first, a consultant to prepare a preliminary design; and

  • secondly, a contractor to complete the design and to construct the project.

This delivery method generally reduces the principal's risk and increases the contractor's risk.

The design and construct model is often used for large scale domestic buildings (eg apartments), large commercial buildings and infrastructure work (eg road and rail projects).

Advantages

  • The principal reduces its risk because the contractor is a single point of responsibility for design and construction.

  • The principal can utilise a contractor's full expertise, eg design responsibility drives design / construction efficiencies.

  • There is less scope for variations related to design.

  • Collaboration during the design and construction phases are enhanced.

  • The construction phase is fast-tracked (sign-off on the 'design and construct' is earlier than on 'construct only').

  • Well established standard form contracts are available.

Disadvantages

  • The principal has less control over the final design.

  • The contract sum may be higher to reflect increased contractor risks.

  • Design development may be difficult to distinguish from a variation which may be the source of disputes.

Source: MinterEllison

James Choi