The Four Types of Projects Organizations in Construction
There are FOUR major types of project organizations (and contract delivery methods) on construction projects. We will provide a detailed review of the benefits and shortcomings of each type in upcoming blogs.
1. Design Bid-Build (DBB) – This is the traditional model wherein the Owner, A/E and General Contractor (GC) are three separate entities.
- The GC (also known as the Prime Contractor) performs under a firm, fixed-price contract. The GC is selected via a competitive bid process; the project
- Design risk is borne by the Owner because the A/E works for the Owner.
- Subcontractors work directly for the GC
2. Construction Management at Risk (CMAR) – The CMAR holds the construction contract and is responsible for project delivery.
- CMAR is brought on board early in the design process.
- Subcontractors work for the CMAR.
- Design risk is borne by the Owner because the A/E works for the Owner.
- The Owner and the CMAR negotiate a Guaranteed Maximum Price (GMP) prior to the start of construction.
3. Agency Construction Management (CM) – CM acts more in an advisory capacity to the Owner.
- The Owner holds separate contracts with the CM and the A/E.
- The CM is NOT responsible for the design.
- The CM is paid a fee for professional services.
- The Owner holds all trade contracts directly.
4. Design-Build – The Design Builder (DB) is the prime contractor and its team includes the A/E.
- The DB is responsible for both design and construction.
- The project is awarded using either a one-step Request for Proposal (RFP) or two-step Request for Qualification/Request for Proposal (RFQ/RFP) process.
- Project award is based on multiple criteria including cost, team experience, technical merit and schedule.
We encourage the CBG community to relate their thoughts about this important topic.