Page 239 - Urban Construction Project Management
P. 239
194 Chapter Nine
• All allowances must be clearly defined.
• Design concepts must be “frozen” early, thus reducing design flexibility.
• Large contingency will be required by the CM/GC to protect the GMP.
• Any contingency money left over after the job is completed must be negotiated
between the owner and the CM/GC.
• The owner may require an audit.
• Changes to the project have to be defined as to where the associated cost will
be taken from (either from the contingency or additional change order cost).
d. Suggested use
• When construction has to be expedited and drawings are not complete.
• In an inflationary market.
• When the owner wants to know the cost exposure early in the project.
• Large base building projects in an urban environment.
• Cost plus contracts is sometimes converted to a GMP.
4. Construction management (no risk)
a. Procedures
• Owner retains the services of a second party to act as the owner’s agent.
• Usually works on a CM’s out-of-pocket expenses plus a fee basis.
• CM is the “owner” of the project.
b. Advantages
• Construction documents are reviewed and evaluated for constructability, cost,
and schedule.
• Subcontractors for bidding are selected on a pre-qualified basis.
• Construction cost is based on subcontractor’s cost without a CM’s mark-up.
• Professional CM organization is used for the management of the project.
• Value engineering and cost control can be maintained throughout the project.
• Fast track method of construction can be utilized.
• Pre-ordering of long lead items can take place early.
• Coordination of all drawings is accomplished throughout all phases of the project.
• Change orders should be kept to a minimum.
• Quality control (QC) should be higher.
c. Disadvantages
• No cost exposure except reputation.
d. Suggested use
• Expediting of project is required.
• Owner does not have the resources to manage the project.
• Large projects.
• Complicated projects.
• When you have critical long lead items.