Page 236 - Urban Construction Project Management

Contracts 191
Exhibit 9-2
1. Quality of construction
2. Anticipated cost of the project Selection on the
type of contract.
3. Schedule
4. Company policy
5. Construction market conditions
6. Availability of good contractors and subcontractors
7. Size of the project
8. Inflation rate
9. Insurance consequences
10. Critical nature of the work
11. Union considerations
12. Renovation vs. new construction
13. Availability of owner’s staff
14. Control of the project
15. Fast tracking (for better cash flow at the completion of the project)
16. Dictated by the legal department
17. Risk factors
18. Familiar with a form of contract
19. Lender’s requirements
20. Local municipality requirements

TYPES OF CONTRACTS

The following is a brief description of each type of contract from the owner’s prospective:

1. Stipulated sum (lump sum) (traditional method)
a. Procedures
• Drawings and specifications are complete (however, no construction docu-
ments are 100% complete).
• Documents are submitted to several contractors.
• GCs receive proposals from the various trade subcontractors.
• One price bid is received from each contractor.
• Contract is awarded for a lump sum (to the lowest responsible bidder) and a
definitive completion date is agreed upon.
b. Advantages
• GC is responsible for all related construction tasks of the project.
• Total cost of the project (without changes) is determined initially.
• Constant auditing of the project is not required.
• Schedule is defined based on the completed documents.
• Owner has the option of selecting the lowest price.