procurement guide - construction management

basis


The original philosophy of Construction Management was that the client would organise the management of the construction activities in-house. As with Management Contracting, the actual works are divided into separate trade packages that are tendered by trade contractors. However, the major difference from management contracting is that the client employs the selected trade contractors direct.

Because of the criticism of Management Contracting that has arisen over the past few years, the Construction Management approach has become more widely applied.

Not all clients have the facility to manage their own construction work in-house and it is now normal for an outside construction manager to be appointed - either an independent consultant, or a contractor. In these cases the trade contracts are still direct with the client.

advantages:


  • Enables an early start to be made on site before design is well advanced.
  • Allows flexibility for change as the works are tendered progressively. There is a reduced likelihood of claims affecting other packages in the event that major changes are made.
  • Lends itself well to complex construction projects as construction can commence before design work is completed.
  • Direct contracts between the works contractors and the client should result in stronger relationships and potentially a less adversarial situation.
  • Trade Packages can include design where specialist works are required and are let on a Design and Build basis.
  • The client has a greater degree of control over the works contractors.
  • Can incorporate Design and Build and Performance Specified works if required

disadvantages:


  • As no contract sum is established, the client relies upon the Quantity Surveyor's estimate. This is, however, endorsed by the construction manager initially and firm costs are established progressively during the course of the works.
  • Organisation costs such as site accommodation, telephones, copying etc., are likely to be paid on a prime cost basis. This gives the client less cost certainty.
  • The client accepts a greater degree of risk because he has financial responsibility for the default of the works contractors.
  • The client takes on the burden of dealing with additional correspondence, multiple payments and possibly adjudication on disputes and extensions of time, etc., for all individual trade contractors.

suitability:


Appropriate for large, complex projects where the client is experienced in the construction process, wishes to have a "hands on" approach and where an earlier start is required than can be made by proceeding with the full design process and tendering in a more traditional way. This is achieved by overlapping design, preparation of tender documents and construction.