Page 250 - Sustainable On-Site CHP Systems Design, Construction, and Operations

CHP Construction 223

organizational structure will greatly improve the success of the project and hopefully
avoid many of the risks including potential scheduling and other trade issue conflicts
normally involved in most construction contracting. Conversely, the lack of strategic
planning and preparation can be counted on to make the CHP project more difficult,
increase the likelihood of conflict, and reduce, or possibly preclude, the project’s chances
for success.
There is a variety of contract delivery methods available to an owner-operator or
development firm involved in a CHP construction project. Accordingly, the construction
delivery method must be chosen with a great degree of care to ensure that the overall
goals of the owner are being achieved. Set forth below are among the most common
construction contracting delivery methods used when the construction of CHP facilities
of any scale are under consideration.
Traditional Design-Bid-Build Processes
Under a traditional method of competitive bid, negotiated contract with or without a
guaranteed maximum price (GMP), either the CHP owner-operator or project devel-
oper hires an experienced prime engineering firm(s) to prepare the contract construc-
tion documents (plans and specifications) for the proposed CHP project. When the
latter design services are completed, the CHP owner-operator or developer then hires a
general contractor to construct the CHP project in accordance with above referenced
construction documents.
The successful general contractor may choose to use some or all his own employees
and/or also hire other laborers, general construction or specialty trade subcontractors
and suppliers to perform portions or all of the work. During construction, the general
contractor’s field superintendent, specialty trade or general trades foremen, trained
safety personnel, engineering professionals and the CHP owner-operator representa-
tives monitor the ongoing construction work progress in a timely manner to ensure that
the successful contractor is in general compliance with the design intent of the contract
documents plans and specifications, which have been previously reviewed and approved
by the local, state, or federal agencies having jurisdiction (see Chap. 12 for details).
Because of the technical complexity of most CHP construction projects, it may prove
challenging to use the above traditional method of contracting. Owners want to have a
facility that is guaranteed to achieve certain objectives related to output and emissions.
Design professionals do not provide such guarantees in formulating designs, partly
because this is outside the scope of their insurance coverage. On the other hand, the
traditional general contractor does not provide such a guarantee only instead war-
ranting that it will construct the project in accordance with the design tendered by the
design professional.
Another concern is that because of the fast-track nature of the construction of an
energy project, it may be difficult to have a design complete before construction starts.
As a result, a contractor might be asked to bid off a set of plans and specifications that
may be less than 100 percent complete, thereby, resulting later in disputes over whether
items specified in the final design should have been assumed by the contractor in the
original bid. This can result in major claims at the end of the project.
Design-Build Process
As a means of resolving the issue of guarantee, many CHP projects are constructed
under the design-build form of contracting. Design-build also known as “turnkey” and