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.
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