For business owners, proceeding with a construction project is a major decision, and to ensure a great construction experience, they must select the right team. Once an owner proves the project’s financial model makes sense for their business, they can either hire a design firm (architect) or a commercial general contractor. Who the owner contacts first largely depends on the owner’s preference or a pre-established relationship. However, the most successful projects have the perspectives of both the architect and contractor during the early phases of the project.
The next important decision an owner needs to make is selecting the construction delivery method for their project. “Delivery method” is a fancy term for describing who holds the legal agreement (contract) with whom. There are four typical paths or delivery methods an owner can take.
- Design-Bid-Build or Hard Bid – The owner first engages and holds an agreement with a designer. The designer designs the project to 100% completion, at which point the owner hires a contractor under a separate agreement.
- Construction Manager as Constructor or Construction Manager at Risk (CMAR) – The owner holds agreements with both the designer and the contractor. The critical difference is that the owner brings on the contractor early in the design process. Thus, the owner has the perspective of the contractor and designer as they are going through the design process.
- Construction Manager as Agent (CMa) – This delivery method is the exact same as CMAR with one major difference. The owner also holds agreements with each individual trade contractor such as a plumber, electrician, carpenter, etc. While the direct contractual flow is from the trade contractor to the owner, the CMa does all the work of administering those contractors.
- Design-Build – The owner holds an agreement with a single entity responsible for both design and construction risk. Most often, this agreement is held between the owner and the contractor who either hires an outside architect or who has the design capabilities in-house.
In our Delivery Methods: Four Paths A Business Owner Can Take to Complete Their Next Project podcast, we dive into the pros and cons of each delivery method. Listen and learn why selecting the right delivery method may be one of the most critical factors in determining a project’s success.
Because we could have spent hours on this topic, we decided to break each delivery method into its own podcast.