Q3 2023: Industry Updates

Sep 1

There is an overall greater interest in alternative construction project delivery methods this year as owners and builders seek out ways to approach common issues that contribute to today’s project cost fluctuations and delays.

There is a growing need to prequalify all subcontractors for financial and workload capabilities and to manage projects with the use of detailed and reliable schedules.

In a traditional project delivery, the owner must manage two separate contracts which can create unforeseen circumstances causing cost overruns and schedule changes which often lead to litigation and delays that add to the overall project cost. In a design-build approach, the owner manages only one contract with a single point of contact. The designer and contractor work together from the beginning, as a team to provide unified project recommendations to fit the owners schedule and budget. Companies are evolving to offer clients end-to-end integrated services that maximize project efficiency.

Another popular approach is the Construction Manager at Risk (CMAR) method which entails a commitment by the Construction Manager (CM) to deliver the project within a Guaranteed Maximum Price (GMP) which is based on the construction documents and specifications at the time of the GMP agreement. [3]

“In many cases, a negotiated
GMP or design-build budget
can provide a better
experience and product than
the lowest price lump-sum
approach which can often
lead to delays and large
claims.”

-STO Building CEO Bob Mullen

[3] Adolphus, E & Keller, J. (2023, Jun 14). The Top 100 Project Delivery Firms: Risk Sharing is Necessity. https://www.enr.com/articles/56626-the-top-100-project-delivery-firms-risk-sharing-is-a-necessity
[4] Design Build Institute of America. (2023). https://dbia.org/what-is-design-build/
[5] Design Build Institute of America. (2023). https://dbia.org/what-is-design-build/