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Services | Construction | Choosing a Construction Delivery Method

Construction

Choosing a Construction Delivery Method

Nabholz has been serving clients as their construction manager and general contracting partner for more than 75 years. We have experience with all different construction delivery methods, and regardless of which you choose for your project, Nabholz will leverage our financial strength and exceptional management practices for the best outcome for your project.

Every project, large or small, begins with a critical decision: Which project delivery method is the right fit? The delivery method selected can influence cost, schedule, risk, communication, and the overall value delivered to the owner.

 

Negotiated vs. Hard Bid

Hard Bid is known to be the traditional delivery method; however in recent years more owners have moved over to negotiated methods. The main reason for the switch is that owners see more value in a negotiated method. Selecting the right approach establishes the foundation for how the project team will communicate, make decisions, manage risk, and control costs.

Construction Manager At-Risk

Construction Manager at Risk (CMAR) brings the construction manager into the project early, often during the design phase. This creates a more collaborative and integrated approach by involving key project stakeholders throughout the project lifecycle.

The CM works closely with the owner and architect to provide constructability input, identify potential issues, refine the design, develop realistic schedules, and establish a reliable project budget.

Click here to hear from one of our clients about CMAR.

Design-Build

Design-Build combines design and construction under one contract with the owner. Instead of contracting separately with the architect and contractor, the owner works with a single entity that is responsible for both design and construction.

The Design-Build team may be led by either the contractor or the architect, depending on the project's structure and needs. Regardless of who leads the team, the architect and contractor work together from the beginning, creating a more integrated approach to project delivery.

Click here to read a case study about ⁠Design-Build.

Construction Management Agency

Under a Construction Management Agency (CMA) delivery method, the construction manager acts as the owner's representative and advocate throughout the project. The CM provides professional management services and assists the owner with project-specific decisions.

The construction manager may be involved throughout the entire project or during specific phases, depending on the owner's needs.

Hard Bid

Hard Bid (also known as Design-Bid-Build) is the most traditional project delivery method. Under this approach, the owner contracts separately with the design team and the general contractor.

First, the design team works with the owner to develop the project’s contract documents, including drawings, specifications, and other requirements. Once the design is sufficiently developed, the project is put out for competitive bidding, and the owner selects a general contractor to perform the construction. However, the chosen bidder is based completely on lowest bid price, regardless of qualifications. This means more risk for the owner as they do not know the quality of work they will receive.

Advantages of Negotiated Delivery

Choice

When you negotiate, your choice is based on qualifications and competitiveness — not just price. You interview each firm who will work on your project. It’s the people and their knowledge, experience, skill, and commitment that makes the difference.

Partner

In a negotiated delivery, the contractor is part of your team and will look for ways to add value to the project.The objectives of the owner, architect and contractor are aligned early. In contrast, the hard bid format can produce adversarial relationships, as the contractor must look primarily at their bottom line.

Click here to read a case study about how Nabholz can add value to your project.

Cost Savings

Managing your project budget begins when critical design decisions are being made. Bringing the construction team on board early allows them to provide cost input into design decisions and capitalize on early purchasing of any necessary major equipment by locking in lower prices. These savings are then returned to you based on contract negotiations, whereas under a hard bid the contractor retains 100% of any savings.

Shorter Schedules

Including your contractor in preliminary steps enables them to fast-track your project and start construction sooner than would be possible with hard bid. The project team has more time to plan for construction, analyze the most efficient methods, and identify any potential disruptions to your operations and plan accordingly.

Higher Quality

Quality control efforts begin in the design phase and continue through construction and warranty. You benefit when your contractor provides input into the best possible means, methods and materials for life-cycle costs. You reap the rewards when the contractor knows his reputation is on the line - no contractor wants to risk losing your recommendation or potential repeat business.

Fewer Changes

By involving the construction team during the design phase, you can prevent changes before construction begins. Your contractor can provide invaluable preconstruction services to identify potential errors ahead of construction. Fewer changes means significant savings on any project. In contrast, with hard bid, you run a higher risk of changes during construction, which stop progress and cost you time and money.

Increased Transparency

You get to see exactly how your money is being spent– not just a high-level recap, but detailed cost transactions. This transparency extends to the preconstruction phase, which enables you to see and decide where you are going to spend your money before construction begins.

Competitive Pricing

With both methods, contractor’s fees are included in the initial pricing with subcontractor and supplier work competitively bid. With the negotiated approach, your contractor manages the risk for you by prequalifying subcontractors and suppliers before accepting bids. The owner gets the best of both worlds: competitive pricing while maximizing quality and minimizing risk. The only thing you negotiate is the contractor’s fees.

Communication

The negotiating process allows you to be much more informed about your project. With negotiated delivery, you are engaged from the very beginning, telling team members what you value most. You get more information about how your money is being spent and the value you are receiving.