Choosing a contractor involves more than the low bidBy Gregg Oblinger
For most business owners, interviewing contractors for new facility construction conjures up images of a fast-talking auctioneer, in this case angling for the lowest bid.
Legend has it that as the much anticipated Mercury 7 awaited launch on Feb. 20, 1962, just before delivering the famed line “Godspeed, John Glenn,” a NASA engineer reminded the iconic astronaut, “Remember, John, this was built by the low bidder.”
Choosing a contractor for your commercial project is much more than selecting the low bid, or what is commonly referred to as the traditional design-bid-build method. Recent trends involve a focus on “alternative delivery methods,” a blending of tactics owners may employ to gain efficiencies throughout the project.
For years alternative methods of project delivery have been reserved for private industry. Recent legislation has been enacted to allow for the use of alternative delivery methods by public entities.
The most common alternative delivery methods are:
• Construction manager at risk, where the construction manager holds all of the subcontracts and risk while providing the owner with a guaranteed maximum price.
• Construction management agency, when the construction management agency acts as the agent for the owner with no risk or contractual obligation other than the construction manager contract.
• Design/build, when the contractor also serves as the designer on the project.
Of these three methods, the construction manager at risk method has become very popular, its primary advantages being that it allows the construction manager to provide expertise early in the design phase and hold primary accountability throughout the entire building process. When interviewing construction managers, a key attribute to consider is the company’s ability to problem-solve with a diplomatic touch. A worthy construction manager is a bridge-builder who works well with a variety of personalities. Serving as the team lead on the project, the construction manager must be a strong communicator with excellent negotiating and organization skills.
Construction managers should provide valuable knowledge concerning market conditions, and construction means and methods to the project team. Having this information early in the design phase enables the team to make informed decisions about the project design as it relates to the budget. Furthermore, as the project proceeds through design, the construction manager will keep the team abreast of the overall construction cost. This is an advantage construction management has over the traditional design-bid-build method. A construction manager avoids over-budget issues that could cause delays. In addition, rework of design is minimized because the construction manager is giving input early and often.
Upon completion of the design, the construction manager develops tailored work scopes for each subcontractor phase of the job to ensure apples-to-apples bidding for the subcontractors. The clearly defined bid instruction enhances subcontractor participation by leveling the playing field, thus increasing competition and providing the most competitive bid environment for the owner. The construction manager markets the project to the construction community, gathers the bids and hires the best subcontractors for the job.
A construction manager provides business owners with service beyond what a low-bid contract provides. Throughout the entire process, the construction manager serves as the key point of contact and is charged with keeping the project on time and on budget. The construction manager builds relationships focused on collaboration among all parties of a project team – owner, architect and contractor – turning the owners’ building experience from dreadful to enjoyable.Gregg Oblinger is executive vice president for Simpson Construction Services and vice president of Associated General Contractors of Kansas.
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