Analysis of Construction Project Delivery for Home Renovation Project

This case study examines the optimal project delivery method, financial contract type, and procurement strategy for a home renovation project. The analysis compares Design-Bid-Build, Design-Build, and Construction Manager at Risk (CM@R) methods, evaluating their benefits and drawbacks based on factors like project complexity, cost control, and owner experience. The study then assesses financial contract types, including lump sum, guaranteed maximum price, and cost-plus fixed fee, recommending the most suitable option. Furthermore, it explores procurement methods such as competitive, negotiated, and best value approaches. A risk management plan is also developed, encompassing a risk register, risk quadrant analysis, and a risk mitigation plan. The project aims to provide a comprehensive framework for managing construction projects effectively, considering the client's fixed schedule, budget, and limited project execution experience, with an emphasis on cost and quality.

Running head: CONSTRUCTION PROJECT DELIVERY
CONSTRUCTION PROJECT DELIVERY
Name of student
Name of university
Author’s note:

1CONSTRUCTION PROJECT DELIVERY
Table of Contents
Background of the case project..................................................................................................2
Analysis of the best project delivery method for the project.....................................................2
Design-Bid-Build (DBB).......................................................................................................2
Design-Build (DB).................................................................................................................3
Construction Manager at Risk (CM@R)...............................................................................4
Benefits and drawbacks of design-bid-build..........................................................................5
Benefits and drawbacks of design build method....................................................................6
Benefits and drawbacks of Construction Manager at Risk (CM@R)....................................6
Analysis of the best financial contract type for the project........................................................9
Lump sum contract.................................................................................................................9
Guaranteed Maximum Price Contract....................................................................................9
Cost-Plus Fixed Fee Contract.................................................................................................9
Analysis of the best procurement method for the project........................................................12
Competitive..........................................................................................................................12
Negotiated............................................................................................................................13
Best Value............................................................................................................................13
Analysis of the Risk Management Plan for the project............................................................15
Risk Register........................................................................................................................15
Risk Quadrant Analysis........................................................................................................16
Risk mitigation plan.............................................................................................................17

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References:...............................................................................................................................18

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Background of the case project
It is a home renovation project. Client has provided a fixed schedule and budget for the
project and this project has to be completed within this schedule and budget as well.
Renovation is not to be made for the entire home, only kitchen and bedroom has to be
renovated. Owner does not have much experience in terms of project execution and therefore,
want to make this project as simple as possible in term of selection of contracts, procurements
with major emphasis on cost and quality of this project as well.
Analysis of the best project delivery method for the project
Construction projects are often large in scale and complex in nature as there are various
aspects that need to be integrated into managing construction projects. Therefore in
construction project identification of proper project delivery method is of prime importance
(Abed et al. 2018). It helps to mitigate challenges in the project that are implemented
according to client requirements objective and scope. In this context, three project delivery
methods are compared to identify the best delivery method for the chosen project. Three
project delivery method that is considered in this report are the followings:
 Design-Bid-Build (DBB)
 Construction Manager at Risk (CM@R)
 Design-Build (DB)
Before identifying which project delivery method will be best for this project it is first
required to have a brief overview of each of these project delivery methods.

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Design-Bid-Build (DBB)
Design bid build is the most commonly used delivery method in the construction project and
often considered by organisations as well. In a construction project, various contracts need to
be produced and approved by clients. In this method to separate contracts are signed one is
the architecture and another one is with the general contractor. The design is produced by
architectural form and they provide permit document required by the project owner for
initiating the project (Dykstra 2018). In some cases, Architect is involved in obtaining bids
from contractors. These bids are required for implementing construction works. In this
delivery method, not only the contractor but the architect is also responsible for working in
close coordination with the contractor and any type of risk associated with the final product
of the project is to be managed by owner.
Design-Build (DB)
In design build method, project delivery might be ensured through two different formats. One
is design build that is led by construction and another one is design build that is led by
architect.
In order to identify which of these formats are to be chosen for this project, it is required to
identify scope of construction work (Chen et al. 2016). In The Contractor-Led-Design-Build
format, a contract is made involving the owner and also General Contractor (GC). While
working in Pre-construction phase, it is required for the contractor to manage responsibilities
of a construction manager and needs to collaborate with the architectural firm. However,
contractor also needs to assume the role of GC after negotiation for the price is completed.
After that, any additional work required in the project is subcontracted.
In The Architect-Led-Design Build format, one of the most important aspect is that the
Architect needs to manage each responsibility not only in terms of design, but construction

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related activities which is done according to a single contract. The owner works in
collaboration with architect and provide the scope required for the design phase. After this,
the GC needs to be involved in the construction process for ensuing that the project is
streamlined and is implemented according to time schedule considered for the project as well.
Construction Manager at Risk (CM@R)
In the Construction Manager at Risk (CMAR) method, a commitment is required from the
Construction Manager (CM) and this is done for ensuing that the project does not require any
extra investment and it is completed within a Guaranteed Maximum Price (GMP). In order to
set this price there are various requirements that need to be considered and these requirements
are identified in accordance with the construction related documents and various
specifications which are provided while choosing the GMP in addition with some inferred
items or some construction related tasks (Smith 2017). This method is often considered for
providing professional services and also helps in communicating with the project owner
while involving in the design development and in construction phases. Along with this,
interest of the owner needs to be identified by the CMAR and provide strategies for
managing and controlling construction related costs while considering the GMP. It is
important because according to contract any costs if it exceeds the GMP and if it is not
related with change orders, then this is considered as the financial liability that needs to be
managed by the CMAR. However for managing these costs negotiations are considered and
for this value-engineering is often considered.
Best delivery method for this project
In order to choose best project delivery method, it is not important to analyse benefits and
drawbacks of each of these methods.

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Benefits and drawbacks of design-bid-build
Benefits
There are various benefits for considering this method for project delivery. In this method,
design and construction is completely controlled by the owner of the project. Therefore, this
provides owner an additional benefit in this project as they are not only involved throughout
this construction project, they are also in charge of it (de Araújo, Alencar and de Miranda
Mota 2017). Therefore, owners who have experience in construction projects often preferred
this method.
If there is any requirement for changes in construction design, then it is easy to accommodate
those changes as most of the changes are identified before starting of project for enhanced
involvement of the owner throughout the project implementation.
Drawback
This method is often preferred by owners as construction costs are fixed and organization has
to take responsibility if there is any change of cost. Therefore, it puts organization in risk.
Even if cost of project is increased for increase in price of materials, that costs has to be
managed by organization itself. Therefore, for construction organizations this is not an
effective method for implementing large scale construction project as changes in price of
materials increases costs of this type of projects (Nguyen, Lines and Tran 2018). However,
one important considerations for project owner while choosing this project delivery method is
that risks associated with project cost needs to be managed by owner.

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Benefits and drawbacks of design build method
Benefits
One of the major benefits is that design and also construction is controlled by one entity. As
construction is started before design, it is possible to complete project in less time therefore
helping to reduce schedule of the project. It is possible to know construction cost before and
therefore, it is fixed throughout the design process. Along with this, a major emphasis is
provided on cost control. It does not even require owner to be experienced in construction
process and it also require less resources.
Drawbacks
However, one of the most important disadvantages of this method is that owner has very less
control on design and construction process. However, contractor has to take responsibility for
any risks associated with final product delivered in the project.
Benefits and drawbacks of Construction Manager at Risk (CM@R)
Benefits
Responsibility and risks are to be transferred to the construction manager from owner. Costs
for construction are fixed during design and along with this construction manager has a full
control on construction and other subcontractors and like design build, construction might be
started before design therefore reducing scheduling for project (Hasnain and Thaheem 2016).
Drawbacks
Less control over construction process and if there is any changes in design after
construction, then it is significantly costly.

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Now a matrix is provided for identifying best project delivery method for this home
renovation project.
Feature to
consider
Yes/No Justification Weight
(5-10)
Rating (1-5) Score
DBB DB CMA
R
D
BB
DB C
M
AR
Project is
less complex
Yes In home
renovation
project, scope
and objectives
of project is
clear and it
simplifies
project and
product needs
to be delivered
through this
project is well
known
8 2 3 1 16 24 8
Cost of
project is
fixed and
less chance
of this being
Yes In home
renovation cost
required for
project is clear
and it has less
9 4 3 2 36 27 18

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changed chance of
variation
Final
product that
is to be
delivered is
clear and
less risk is
involved
Yes As this is home
renovation
project, final
product is to an
renovated home
according to
specification of
owner and
therefore, less
risk is
associated with
final product
that is to be
delivered in
project
8 2 4 1 16 32 8
Owner has
less
experience
in this type
of project
Yes Client has not
done this type
of project and
wants a single
firm to manage
all type of
construction
project.
9 2 4 3 18 36 27

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Total score 86 149 61
Analysis of the best financial contract type for the project
Lump sum contract
In this type of contract, which is also known as stipulated sum is one of the most common
and simple contract type that is signed between contractor and owner of the project. In this
type of contract, the agreement is made between contractor and owner and the contractor is
bound to provide an overall construction project in a fixed amount of money. In this contract,
all of the disc at to be transferred to the contractor and the owner is not responsible for
dealing with any kind of construction-related risk. Therefore this type of contract is
considered in a project where the cost of the project is properly identified and there is
comparatively low risk in the project.
Guaranteed Maximum Price Contract
It is a cost-type contract where compensation is provided to the contractor for an actual cost
in project and fixed-fee is also provided in accordance with the construction cost as well
(Demirkesen and Ozorhon 2017). If there is any type of cost overrun in the project then this is
the responsibility of the contractor. However, if this increased in is caused is due to change in
project scope or some additional requirements requested by the client then the cost has to be
managed by Owner and contractor is not responsible for this.
Cost-Plus Fixed Fee Contract
In this type of contract, it is the responsibility of the owner. To provide complete cost in
terms of material and labours required for completing the construction project. Along with
this is also responsible for paying the amount it to contractor overhead and any type of profit