Assignment 3

Assignment - 3
1. Discuss briefly project delivery methods/ systems under

the category of outsourcing (including their merits and
demerits).
Introduction
Project Delivery Method is a system that determines the relationships between the different
project stakeholders and their timing of engagement to provide a built facility [1]. Better
understanding and ponderously choosing of project delivery methods are significantly important
in construction projects, for the selection of appropriate project delivery method can influence
the success of the project. The project delivery methods are basically divided into two main
categories: force to account and outsourced. This discussion will focus on the project delivery
method that comes under the category of outsourcing.
Project delivery methods under the category of outsourcing

In spite of the fact that there is no specific project delivery method better than others and suitable
for every project, there will be at least one method that is most appropriate to be used for each
project. Those project delivery methods under the category of outsourcing may be categorized
based on the criteria of segmentation (Deign-Bid-Build, Design-Build, Construction
Management, and Pure Operations & Maintenance), integration (Design-Build-Operate,
Design-Build-Operate-Maintain, and Design-Build-Finance-Operate) and financing methods
(Design-Build-Finance-Operate, Build-Own-Operate, and Build-Own-Operate-Transfer).
The most often used project delivery methods in construction industry are Design-Bid-Build
(DBB), Construction Manager at Risk (CM at Risk) and Design-Build (DB).
1. Segmented project delivery methods

a) Design-Bid-Build
Design-Bid-build is also known as
traditional method in which the design, Contractor Sub-contractor
bid, and construction were separated. Owner
In this method, the designers were
Designer
forbidden from being involved in
construction and, in the same way, the
contractors were excluded from design Figure 1: Design-Bid-Build
responsibility. This method rewards
individual success but disregarding the impact on project outcome and it was a
system that created difficulties and impossibility for project optimization.
Merits Demerits
- It is a linear process that easy for owners - Results in recurrent claims, argument
Designer
to understand and manage. between project team members and cost
- Contractors are familiar with process andOwner and time Designer-builder
overrun.
work well under this approach. - The owner could not considerSub-contractor
changing
- The total cost of construction was a user functions as the design plans were
Figure 2: Design-Build
determinant in the final selection of the locked before the procurement of the
contractor. contractor.
b) Design-Build
In the DB project delivery method, single entity such as integrated design-build
firm, contractor led, designer led, joint venture signed a single contract with the
owner for the performance of design and construction services. In this method, the
designer was not directly contracted with the owner, therefore owner had limited
control or influenced on the final design quality. This method encouraged team
collaboration and enable early involvement of contractor to give input and took part
in the budgeting, programming, financing, assessed the design for constructability
and cost of construction.
Merits Demerits
- Can produce project more quickly than - The criteria of the design is mostly
DBB cost-driven during the early design
- Single point of accountability for design stage in the context of quality and
and construction scope.
- Cost efficiency can be achieved since - It is difficulty to the owner in
owner and contractor-designer are working verifying the best value or
together. performance criteria achieved by the
project throughout the design
process.
c) Construction Manager at Risk (CMAR)

When considering the CM at Risk
method, commitment from CM is CM at Risk Sub-contractor
to deliver the project within a
Owner
specified schedule and price. The
CM has two roles in this method; Designer
as a consultant to the owner
during the pre-construction phase Figure 3: CM at Risk
and a general contractor in the
construction phase. This method also allows for team integration as the CM
integrates with the designer at the early stage of design.
Merits Demerits
- The owner gains the benefit of having the - If any contract documents have
opportunity to incorporate a contractor’s inconsistencies or are missing
perspective and input into planning and important factors, the owner may be
design decisions. liable for these excess costs.
- The CM at risk takes the burden off of the
Owner in managing and coordinating the
project.
d) Construction Management Agency (CMA)

Owner contracts directly with a design firm and each subcontractor. This method is
Similar to CM at risk, but guaranteed price. In this method, the construction
manager (CM) is responsible exclusively to the owner and acts in the owner's
interests throughout each stage of the project.
CM Agency Multi-prime Sub-contractors

Owner
Designer
Merits Demerits
- Projects can be delivered at accelerated - The CM has no contractual
2. or fast-tracked schedule. responsibility or control with
- The Owner can select subcontractor subcontractors.
- The CM responsible to deliver the - The owner must manage multiple
project on budget and schedule. contracts
Integrated project delivery method

a) Design-Build-Operate
A design-Build-Operate (DBO) is a project delivery model in which a single
contractor is appointed to design and build a project and then to operate it for a
period of time. This method is a public private partnership (PPP), in which a public
client (e.g. government or public agency) enters into a contract with a private
contractor to design, build and then operate the project, while the client finances
the project and retains ownership.
Merits Demerits
b) Design-build operate maintain (DBOM)

Design-build operate maintain (DBOM) is also referred to as ‘turnkey’ procurement
and ‘build-operate-transfer’) is a modified design-build method in which the main
contractor is appointed to design and construct the works. This differs from the
traditional procurement route where the client first appoints consultants to design
development and then appoints a contractor to construct the works.
Merits Demerits
- A single source of responsibility for - Owners lose much of the control they
usually disparate functions of design, usually have with traditional
construction, and maintenance. contracts.
- It relieves the owner of the time and - Prices can turn out to be excessive in
trouble spent on operational and the long term
maintenance issues.
c) Design-Build-Finance-Operate
A single contractor with design, construction, and facilities management expertise as
well as funding capability is appointed to design and build the project and then to
operate it for a period of time. The contractor finances the project and leases it to the
client for an agreed period (e.g. 30 years) after which the development reverts to the
client.
Merits Demerits
3.
financing methods
a) , Build-Own-Operate (BOO)
The build-own-operate (BOO) contract is a project delivery method frequently used for
large, complex public-private partnership (PPP) infrastructure projects. In a BOO
project method, a government department allows a private company to finance, build,
and operate infrastructure over a specified period, and the private company retains
ownership of the infrastructure in eternity.
Merits Demerits
b) Design-Own-Operate-Transfer (BOOT)
Build-own-operate-transfer (BOOT) is a type of public-private partnership or PPP.
Under this project delivery system, a private organization develops a large project under
the contract of a public partner. It is a way to create large infrastructure projects for the
public while being able to use private funding for it. The contract may last for years in
length (e.g. 40 years) and eventually, contrary to BOO, ownership of the project
transfers from the private enterprise to the public sector.
Merits Demerits
- The public sector is able to take - It only works for large-scale
advantage of the efficiencies found in the infrastructure projects but is not
private sector for a minimal investment. suitable for PPP smaller projects
- As the private sector is managing the which communities tend to need
funding aspect of the project, it keeps development help with each year.
public-sector funds where they are most - It needs fund-raising to be successful
needed through directing resources to and if no sufficient funds were not
other socioeconomic welfare areas. received it may not be get started.
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Assignment - 3

1. Discuss briefly project delivery methods/ systems under

Project delivery methods under the category of outsourcing

1. Segmented project delivery methods

c) Construction Manager at Risk (CMAR)

d) Construction Management Agency (CMA)

CM Agency Multi-prime Sub-contractors

Integrated project delivery method

b) Design-build operate maintain (DBOM)

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