Choosing Appropriate Construction Contracting Method

TLDR

Construction contracting methods comprise scope, organization, contract, and award, and while the traditional designer–general contractor model is common and efficient, owners must tailor methods to each project. This paper examines the compatibility of various construction contracting methods with certain types of owners and projects. The authors provide guidelines to help owners select the organization, contract type, and award method best suited to their project and ownership profile. The study identifies six primary contracting organizations and shows that selecting appropriate methods can shorten duration, increase flexibility, reduce conflicts, involve contractors in design, offer cost‑saving incentives, and enable alternative financing.

Abstract

This paper examines the compatibility of various construction contracting methods with certain types of owners and projects. Contracting methods, as defined in this paper, consist of four parts: scope, organization, contract, and award. An owner must create an appropriate contracting method for each project. It was determined that there are six main organizations around which the contracting variations are created: general contractor, construction manager, multiple primes, design‐build, turnkey, and build‐operate‐transfer. The most common method is the traditional system of an independent designer, a general contractor, and a competitively bid, lump‐sum price. This method is efficient in many cases; however, in some situations, alternative methods are more appropriate and should be explored. Choosing certain methods can decrease the project duration, provide flexibility for changes, reduce adversarial relationships, allow for contractor participation in design, provide cost savings incentives to the contractor, and provide alternative financing methods. Guidelines are established to help the owner choose the organization, contract type, and award method most applicable for their project and themselves.