The 6th Stage of Development Management (Part 1)
So you have your planning approvals and your building approval and you’re ready to construct. Be very aware of what the construction phase entails. As the rule goes, always know enough to know what you don’t know.
The information on this first stage is split into 2 separate Blogs to keep it short and sweet.
So what don’t you know?
The construction phase does not start when work commences on site. The construction phase commences when you decide how and who you are going to partner with to deliver the constriction of your project.
Note I said “Partner”. For too long the relationship between principal and builder was an adversarial one. Since the GFC there has been a distinct change. As work has slowed and jobs have become harder to come by, the builders who have survived have moved away from hard dollar tendering and into partnership arrangements such as Early Contractor Involvement (ECI) style contracts.
The first decision you need to make is what method should you use to engage with your contractor. The type that is best for you depends on many factors including but not limited to -
Your risk profile
Your relationship with the contractor
The type of project
Your funding structure
Following are some of the forms of procurement that are common to the market. Remember there are many ways to skin a cat and many agreements become variants or a merging of some of these methods.
Early Contractor Involvement (ECI)
Design & Construct (D&C)
Construction Management
Full Design Tender
Cost Plus
Fixed Price Contract
Guaranteed Maximum Price (GMP)
Incentive Contract (Time, Cost, Performance)
Managing Contractor
Build Own Operate Transfer (BOOT)
Public Private Partnership (PPP)
Turnkey
