Planning

1
Planning Delivery Systems

• Construction Engineering 380
• Engineering Law

2
Planning and Delivery

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

time
time
quality
quality
cost
cost
Balanced job
Time constrained job
3
Planning and Delivery

• 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

4
Planning and Delivery

• 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

5
Planning and Delivery

• 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

6
Planning and Delivery

• 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

7
Planning and Delivery

• 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)

8
Planning and Delivery

• 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

9
Planning and Delivery

• Contingencies
• Unallocated money set aside in a contract for
  uncertainties and other unforeseen (latent)
  conditions.

10
Planning and Delivery

• 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

11
Planning and Delivery
Cost of changes

Cost of design
time
12
Planning and Delivery

• 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)

13
Planning and Delivery

• 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