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| Design/Bid/Build Negotiated Contract Design/Build Construction Management | ||
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Negotiated Contract Cost-plus Fee With or Without a GMP (Guaranteed Maximum Price) | |
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This form of project delivery is a blend of the traditional Design-Bid-Build and the Design-Build methods. In this method, the architect is selected by the owner first and starts the design process beginning with building programming and schematic design. The contractor selection process begins during schematic design with the architect’s assistance. Selection methods include requesting qualification statements from contractors, and formal interviews. (We suggest a limited or invited list). The designer will meet with the owner to decide on a general contractor. The design team of architect-contractor-owner will then work on developing project budgets and refining design to meet that budget. Design development continues using value engineering and design constructability. The construction documents are then completed for subcontractor and suppliers bids. | |
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NOTE: Some time during this process
one or both of the following types will be applied for by the general
contractor to work under. The general contractor is reimbursed for
all time (labor) and materials needed along with general condition
requirements, plus a fixed or percentage fee over and above actual
costs. This type of agreement is also known in the construction industry
as a T&M project.
The general contractor may also be asked to produce a guaranteed maximum price (GMP) for the project, which will not exceed the design team parameters. If this agreement is part of the general contractors contract there may also be a clause for the owner and the general contractor to share in any cost savings under the GMP. The general contractor will solicit bids for all labor and materials required to complete the project. The G.C. will usually self perform in any areas where he is qualified. The owner has the right to review all subcontractor bids and can choose preferred vendors for the project. The architect continues his responsibilities as the owner’s representative on site during construction to insure that construction is progressing according to plans and specs. The contractor’s involvement with the p roject begins with the owner’s selection of a contractor and concludes at the end of the warranty period. |
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| Advantages | ||
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The owner is assured of a project that is on budget by |
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the contractor’s involvement during the Design Development phase. The architect, owner and contractor work together to establish construction details within the established budget. |
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A good working relationship and sense of trust is |
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developed early on in the process between all parties. Changes during construction are fewer and more fairly priced because most issues have been resolved before bidding. |
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Construction can be started before all plans are |
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completed because foundation and site work bid packages can be awarded within the budget. |
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The owner has separate contracts with architect and |
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general contractor for more traditional roles during construction. |
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Construction cost savings below the GMP are |
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typically shared between the owner and general contractor. |
| Issues and Disadvantages | ||
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The contractor selection is made without a formal bid |
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based mostly on a fee proposal and qualifications in the particular building type. |
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Typically, 80% of the work is competitively bid with the |
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general contractor self performing 20% of the work. The critical components such as concrete, masonry, steel erection and carpentry may be self performed to keep the project on schedule. |
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The contractor and owner need to focus on both quality |
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and value during construction and not the possible cost savings on a GMP project. It will be an added bonus to an already great project. |
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The Negotiated Contract Method is Most Generally Suited for Projects Where: |  |
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The owner desires a Guaranteed Maximum Price (GMP) early in the design process. | |
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Saving time in the design phase and construction phase is important. | |
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A contractor’s known quality and performance are important. | |
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The owner understands the risk of beginning construction without a completely developed | |
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construction document package. | |
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