A Guide to Construction Management
There are a number of different procurement options available including the traditional Lump Sum method, Design & Build method and Construction Management method. Each method varies in terms of risk allocation including: the stage at which cost certainty is achieved; the point of financial commitment; the experience and input required by the Client; and the overlapping of the stages.
Main features of Construction Management
The main identifying feature of Construction Management is that the Client enters into separate contracts with each of the Work Package Contractors. He also appoints a Construction Management Team along with his Design Team on a fixed fee basis. The Construction Manager is responsible for co-ordinating the design and construction programmes to ensure the interfaces between the various packages and the design are properly managed.
The contractual links under a Construction Management arrangement can be seen below:
Advantages of Construction Management
The advantages associated with Construction Management include:
- This method can allow for a quick start on site and fast track projects
- Flexibility - design can extend into the construction period
- Control of change - the procurement of the building in packages allows process engineers requirements to be incorporated with minimal impact on the construction work
- There is a direct Client relationship with the Work Package Contractors. This is attractive to the Contractors and can lead to improved performance and prices
Key considerations when considering Construction Management
Other points to consider include:
- The final cost is not known until the works are almost complete. Very close cost control and reporting is required
- Programme certainty will not be achieved until all package contracts are agreed
- The Client will be required to participate to a higher level in the rolling decision making process throughout the construction period
- There is a higher level of Client administration that requires careful consideration and planning
Project Stages
At the beginning of a project an outline design will be prepared that will identify the main scope and scale of the project. Using this design as a basis for costing, an elemental cost plan will be prepared that identifies estimated allowances for all aspects of the project.
The next stage will include separating the cost plan in the proposed Work Packages Contracts and the production of the initial programme of works. These documents will form the base line for monitoring the progress of the project.
Individual Work Package Contracts have their design element progressed and then are procured to obtain the best contractor and price to complete the works. Recommendations to proceed are made to the Client including comparisons with the project base budget and programme.
Direct contracts are entered into between the Client and each of the Work Package Contractors. These contracts are administered by the Professional Team on behalf of the Client.
During the construction works regular progress payment recommendations will be made by the Professional Team in favour of each of the Package Contracts. These will need to be administered carefully by the Client to ensure prompt payments are made direct to each of the Work Package Contractors. This helps to ensure the contractors deliver the improved performance and cost savings.
Each of the proposed package contracts are closely monitored during design and construction. This information is then fed into updates to the Client at regular intervals that cover cost and programme issues. Any issues requiring specific attention will be discussed in detail and the necessary actions agreed to achieve the project objectives.
