Project Delivery Methods, Financial Contract Types, and Procurement Methods for a Hospital Construction Project

Information Systems
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Table of Contents
Introduction......................................................................................................................................3
Main Body.......................................................................................................................................3
Project Delivery method.........................................................................................................3
Financial contract type...........................................................................................................4
Procurement method...............................................................................................................5
Risk management plan...........................................................................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................8
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Introduction
Risk is pervasive to every organisation in all business operations. Therefore, every business
undertakes risk management to mitigate the possible negative efforts (Zhao and et.al., 2015).
This project takes the risk management of a hospital building project in Gold Coast undertaken
by The Wesley Hospital (owner). The hospital is in Brisbane and is now looking forward to open
its another 500-bed hospital in Gold Coast. New hospital would be having 15 ICUs, 15
Operating theatres and all modern technology machines. This project discusses various delivery
methods, financial contract types and procurement methods, best suitable for the hospital project.
Risk is also identified for the project and a risk management plan has been developed
accordingly.
Main Body
Project Delivery method
Below mentioned are three most common construction project delivery methods including
a mixture of planning, design and construction services:
Design-Bid-Build (DBB) – It is the most popular and most common delivery method as it
has the lowest bidding price. In it, owner signs separate contract with architect/designer and the
contractor who is going to actually construct the project design. Designer works directly for
owner and project design is developed according to owner’s inputs. Contractor then carries out
the construction work. Since, the architects and contractors are not contractually bound with each
other, it is owner who has to assume all risk related to the project. In it, construction cost is
relatively unknown.
Design-Build (DB) – In this method of delivery, designing and building, both activities are
carried out by same firm (Zhang and et.al., 2015). Therefore, it can either be architect led design
building or contractor led design building. Former involves an architect who is solely responsible
for design and construction while in latter, it is general contractor who is responsible for
development of design and construction of the project. Both the parties interact with owners to
develop the project but owner has minimal control over design and construction quality. This
method has high bid cost so there are only few bidders that exercise it.
Construction Management-at-Risk (CMAR) – This method has primary responsibility over
construction manager to deliver the project within a Guaranteed Maximum Price. This price is
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