The investment and construction process is a complex chain of different stages of investment and payback of finances in the creation of architectural commissions. With all the variety of needs and demands in this field, directors usually have a few basic steps in their decision-making process. The main one is the choice of the project path, which is based on extensive criteria. Chief among these is the answer to the question of what mechanism will most successfully compensate for the weaknesses of the original order. There are now many variations of project implementation, the most common are Design-Bid-Build, Multiple Prome Contracts and CM agency.
The manager chooses the contract model based on a variety of factors, including return on investment, time commitment, and innovativeness. Each type of project implementation can be quality and effective for different backgrounds. Design-Bid-Build is used when there is a need or opportunity to delegate management to a contractor (Chappell, 2020). The latter takes on the function of negotiating with the architects, the management of personnel and finances. In this case, the manager initially enters into separate contracts with the designer and the contractor, and is solely responsible for all financial risks. A clear advantage of this type is the time savings, because construction can begin before the approval of the final project (Halpin et al., 2017). Consequently, this type is relevant for urgent projects that are not significantly limited in price. The disadvantages are that this format involves a conflict of interest between the architects and the contractor, as well as the high costs of the entire process.
Construction Manager format is based on delivering a project to a specialist, which must be implemented under fixed terms that are not subject to adjustments. In most cases, the determining conditions are financial conditions that imply the need to keep within the maximum available cost of the project. The manager in this case is fully responsible for the loss of funds and usually has full and unconditional control over all phases. The advantage of such system is its high workability in crisis conditions, but it is important to understand that it is impossible to make global changes even in the early stages of construction. In the future, this will lead to the fact that the customer has almost no opportunity to influence the course of construction and make suggestions. Therefore, this type will be more relevant for projects in crisis and for types of construction on a small scale.
Multiple Prime Contracts bring together a lot of concepts related to the management of construction. This phenomenon is most often used when a project is based primarily on public procurement (Chappell, 2020). Under such conditions, the number of suppliers is reduced to a minimum and managers have the opportunity to simplify logistics and procurement processes, and therefore reduce the cost of construction (Halpin et al., 2017). The disadvantage of such format is that it is not always possible to implement the right price-quality ratio due to the fact that due attention is not paid to the certification of supplied materials. Moreover, such a mechanism gives considerable room for fraud. Nevertheless, Prime Contracts are quite relevant in various government or bidding projects.
In general, it should be noted that these models of construction implementation make sense only for large-scale customers, because only under these conditions it is possible to have access to all stages of the supply of materials. Under these conditions, the customer is no longer responsible for coordinating all phases of the procurement process. Moreover, such contracts create a fertile ground for further cooperation with large companies implementing logistics and material selection.
References
Chappell, D. (2020). Professional practice for architects and project managers. Wiley.
Halpin, D. W., Gunnar Lucko, & Senior, B. A. (2017). Construction management. Wiley.