Project Delivery Mechanisms
• Costly budget overruns, inadequate quality
control, excessive delays, customer
dissatisfaction characterize construction
• Calls to improve the management
practices of the planning, design,
engineering, construction and facility
management.
• Different project delivery mechanisms
evolved.
Design-Bid-Build (DBB)
Client
• Presumption:
• New sets of project
Archit Conta teams selected
ect ctor
competitively reduces
costs on clients
Subcon
tractor • Risks can be
minimized via
thorough description
of specs
Design-Bid-Build (DBB)
• Is the traditional and well known approach
• Is known for sequential processes and
fragmented project participants
Sequential process
Need ID Design Bid Build
Client A/E Client Contractor
Fragmented project participants
DBB-Advantages:
• Substantially complete documents: reduce
risk
• Based on competitive bidding [usually]:
can reduce cost to clients
• [Usually] owners know in advance the cost
of the project
DBB: Disadvantages
• Change orders and claims often abuse the
predictability nature of the delivery mechanism.
• The sequential nature thwarts advantages from
integrating processes
• The fragmented nature deprives advantages of
cooperation and value management through
analysis of different options
• No real incentive for the G/C to reduce costs but
lots of them to escalate it
Design-Build (DB)
• Client contracts with
Client
only one firm
• Rationale:with few
Design-Build parties involved in the
firm
contractual
relationship, the
process becomes
Subcontractor
more efficient.
DB: Advantages
• Can allow to use fast-tracking
• Problems can be solved more quickly as
designer and contractor are same.
• Changes are easier to implement
• Provides better coordination, increased
efficiency, lower costs, and usually improved
quality
• Provides opportunity for incorporating
construction expertise during the planning and
design phases
DB: Advantages
• Client not caught in debate when design
and construction discrepancy
• Client can deal with a single point of
responsibility
DB-disadvantages
• Client doesn’t know cost in advance
• Client is not represented in design and
construction, hence his needs may not be fully
implemented
• No firm check up mechanism; the DB firm can
cover mistakes
• Is not tenable to trade contracting [where usually
governments want]
• Owner needs to select a qualified DB firm
• The practice is not well known in Ethiopia
Construction Management
• CM at Agency • CM at Risk
Client
Client
A/E CM
A/E CM
Principal Subcontractors
contractor /trade
contractors
CM (Cntd)
• CM at agency • CM at risk
CM firm’s role is to provide CM firm is held responsible
consultancy services for the successful delivery
CM firm doesn’t absorb any of the project
risk Acts like a general
Doesn’t enter any trade contractor where it can
contracts enter trade contracts
Usually used in cases
where client doesn’t have
enough experience or in
house expertise
CM
• Advantages:
Allows a systematic approach to project
management: Optimal integration of time, cost,
quality, customer satisfaction
Allows early professional analysis in value
management and life-cycle costing
CM firm’s knowledge of the industry helps to make
sound judgments, estimates and forecasts
CM firm’s knowledge in management and business
complements the design firm’s technical skills: hence
helps teams concentrate on what they do best
CM
The CM contract offers potential reduction in
the contractor’s overhead by the elimination of
general contractor
The CM process may reduce or eliminate
adversarial relationships by emphasizing
teamwork
Can be used in phase construction
CM
• Disadvantages
The owner incurs additional cost over and above
those paid to the architect/engineer and the
contractor[s ]
When the construction manager doesn’t have direct
contractual relationship with the separate prime
contractors, his perceived authority is reduced
The CM who acts as the owner’s agent has limited
liability
In Ethiopian case, there are no such professionals
firms that can provide the service
PPP
• Experience shows us neither the public sector
nor the free market provides infrastructure
effectively
The free market is often characterized by
breakdowns, inefficiencies and inequalities
The public delivery is known for inefficient decision
making, derived externalities, unworkable
bureaucracies, allocative inefficiency, dysfunction
between output and payment.
• PPPs, also known as PFI or concession,
evolved to combat this probs
PPP-Cntd
• Rationale in PPP
the private sector, with its wide range of managerial,
commercial, and technical skills, spurred on by the
profit motive and unencumbered by layers of
bureaucracy can reputedly perform certain tasks
more efficient that the government, thereby offering
huge benefit to the public
improves efficiency by changing the traditionally
adversarial procurement system to partnerships that
integrate finance, design, construction and
management.
PPP
• Different forms and names of PPP
BOT
BOOT
BOOM
DBFO
Selecting suitable delivery
method
attribute DBB DB CM
Speed
Certainty
Flexibility
Quality
Complexity
Risk allocation/
avoidance
Responsibility
Price competition
