The right contract delivers the goods
The choice of contract form, which defines crucial commitments to a delivery structure, determines the ultimate success of the project, says TAHIR SHARIF, president of buildingSmart ME.
01 November 2010
THE DECISION on the type of contract to use can have a major impact on how relationships develop between key players and ultimately, on the outcome of the construction project.
Further, choosing the right contract from an array on offer can be daunting, and therefore, it is critical to ensure processes such as building information modelling (BIM) and integrated project delivery (IPD) are incorporated and capitalised on.
Construction management is the combined practice of supervising and controlling business process and technology within the industry that is usually associated with a specific project delivery where one party to a contract serves as a consultant, providing both design and construction advice.
A typical construction project consists of three parties: owner/developer, designer and builder. These parties have to work within local government regulatory guidelines and also be able to communicate with building and facility managers. The project will require parties to commit to a delivery structure, defining roles and responsibilities of the management team, communication protocols, project controls and procedures for disputes and claims, which are defined in the contract.
Contract forms
For decades, the most common project delivery has incorporated two types of contracts which are also known as design-bid-build. The first is between the owner and designer, broadly covering planning, design and construction administration. The second is between the owner and successful bidding contractor, covering the actual building activities.
Under this traditional method, there is no formal contract between the builder and designer – resulting in an indirect third-party relationship between them that does not help the communication process. Also, as the builder is not directly involved in the design process, disagreement and excessive claims can occur as the project progresses. This form of contract does not encourage the collaboration ethos of the BIM/IPD approach.
The more recent design-and-build contract is an increasingly popular model, which combines activities of the design and build teams into a single construction unit that has a common contract with the owner. They take a concept design from the owner and complete the detailed design that is submitted to the owner for approval. Once approved, the design-build team completes the additional stages of design (construction/production/maintenance), in parallel with the actual construction process.
This contract has two significant advantages over traditional delivery: constructability is optimised because build-and-design teams are motivated to work together; and build time is significantly reduced due to the involvement of the contractor in the design process, allowing early mobilisation and concurrent construction.
Construction management at risk (CMaR) is a more advanced form of collaborative project delivery, where a contract is established at the outset of the project between the key players enabling the creation of a true construction management team.
Concept and evaluation are combined as a ‘pre-construction’ service, enabling all parties to exercise their particular skills in establishing the starting parameters for detailed design and construction.
Parties are often able to commit to project delivery within a ‘guaranteed maximum price’. This fundamentally changes the relationship of the contract parties – they have a common financial incentive to maximise the efficiency of the project delivery, to minimise risk and maximise reward. As collaboration is the basis of this system, it allows the advantages of BIM and IPD to be fully utilised.
BIM, IPD and SCM
Users of BIM and IPD are aware of the advantages it provides for the design process. However, constraints within contracts mean that the full benefits of these systems may not have been realised. It’s important to know how selecting the right contract form can be instrumental to delivering the best solution.
The traditional approach design-bid-build is still the most widely adopted contract in the construction industry. Its appeal lies in the fact the owner passes the risk to the contractor, who has probably submitted a ‘cut price’ bid in order to secure the contract. The owner is happy because he has mitigated risk and often at the lowest price. However, in reality, if as it often happens, the project is not delivered in cost and on time, the overall delivery of the project is affected. Design-bid-build projects are frequently plagued with problems like multiple requests for information (RFIs), rework, overruns, claims and quality issues.
Why does this happen? One explanation is that the contract itself encourages problems. Those responsible for the actual construction (at all levels) have not been involved in the design process and have little profit margin in their bids. This invariably means that as problems arise on site, every opportunity to generate additional revenue via a variation order is exploited – leading to conflict, mistrust and delays.
The BIM process and technology addresses some of the inherent design-bid-build contract issues, but its advantages are greatly restricted because the underlying approach is still to have multiple trades and professions working in isolation.
The collaborative approach: Here, the design and construction teams are brought together into a single unit, enabling early and joint decision, which encourages all parties to commit to deliver projects within time and budget.
If the correct BIM technologies and process are selected, it is possible to enhance the benefits by providing a virtual design and construction (VDC) environment, where multiple disciplines can be integrated into a single model to facilitate communication. The IPD process can also be implemented from the detailed design phase onwards.
CMaR: Although design and build is a quantum leap forward from the traditional contract delivery method, its concepts have been enhanced in recent years by the CMaR contracts, which bring together owner, designer and builder in a single environment from the earliest concept phase of a project. This means that the combined advantages of BIM, VCD and IPD can be fully utilised across the whole project lifecycle.
Case study
The Central Park Tower in Broomfield, Colorado, provides excellent examples of measurable return on investment (ROI). Here the general contractor, Weitz Company, combined the IPD process to streamline the delivery of the entire structural system and maximise the use of data/deliverables that could be extracted from the fully coordinated building information models.
Chris Allen, manager of VDC and operational excellence at Weitz, explains: “Initially, the technology was deployed without an inherent process understanding.”
In an effort to align its deployment of VDC-BIM with the actual construction process, Weitz examined several areas that would yield immediate tangible benefits to both new and existing projects. The primary criteria were to reduce both cost and risk in operations, together with optimising schedule – without compromising quality.
The delivery model
Project delivery can be broadly summarised under two primary activities – cast in place (CIP) concrete and structural and miscellaneous steel, including glassfibre reinforced polymer (GFRP) exterior panels.
Beyond simply establishing a corporate vision, Weitz seized the opportunity at the 11-storey Central Park Tower to streamline the delivery of the entire structural system and maximise the use of data and deliverables that could be extracted out of fully coordinated building information models. Doing this paved the way for Weitz to effectively mitigate the risk associated with the structure by ensuring design-to-construction coordination, maximising off-site fabrication, and facilitating ahead-of-schedule performance of the trades on site.
The delivery model was CMaR, incorporating IPD as a process perspective.
Structural Consultants Incorporated (SCI) was hired by Weitz to provide the design, drawings and modelling for both the structural and miscellaneous steel package and the exterior skin. Its scope went beyond design interpretation and constructability review to more effectively increase the benefits provided to the project.
SCI served as the IPD structural engineer, including an IPD structural engineer and a structural design/build subcontractor in its team. From a social standpoint, these team members were created to assist Weitz in bridging the critical gaps between the architect and engineer of record (EOR) and the fabrication/construction teams.
With the delivery model and structural relationship network in place, the project was able to effectively undertake a VDC-BIM deployment. Using a fully co-ordinated building information model as a point of focus facilitates the VDC process and enables key project stakeholders (owner/developer, designer and contractors) to share the same information at the same time in both a virtual and live environment.
This in turn enabled the benefits of the process to be fully realised. Some key benefits included earlier involvement in project – commitments made at schematic design phase; overlapping of design and construction activities; an accurate structural model maintained throughout design/construction phases; and extracted supplementary structural drawings from the structural model.
How BIM helped
BIM technology was deployed over the lifecycle of the project to perform and inform the following critical activities:
• Design – modelling of the entire structure including the exterior GFRP;
• Coordination – designed and modelled all concrete embed plates for attachment of steel and precast;
• Detailing – plus full constructability analysis;
• Fabrication – the model produced embed and formwork layout plus grade beam rebar shop drawings;
• Erection/place work – including comprehensive lift drawings; and
• Project results and benefits.
By adopting this delivery model and process, the project realised significant benefits.
In terms of CIP concrete works, comprehensive lift drawings were crucial to achieve the required quality, productivity and performance of the cast.
The model delivered drawings for individual concrete pours to aid field crews. Details provided included pour dimensions, concrete mix and volumes, placing equipment requirements, formwork considerations, finishing work, and location/quantity of the required embed, conduit and reinforcement material. This enabled easy adaptation of the programme to meet user requirements.
The use of a single building information model facilitated accurate coordination of embeds and reinforcements, realising tremendous benefits in comparison to the traditional error-prone and fragmented process.
The results confirmed the benefits. There were practically no approval comments required from the EOR, the construction schedule was reduced by two weeks, there was a 26.1 per cent reduction of reinforcing materials (actual versus budget), the waste of reinforcement materials estimated at 0.07 per cent – and zero RFIs.
Structural and miscellaneous steel aspects: SCI was responsible for design and detailing of structural steel superstructure and participated in design team meetings from the earliest phase. The structural model was designed for constructability and GRFP compatibility.
From the model, it was possible to extract all supplementary contract documents and a detailed calculated data package similar to that summarised above for CIP.
There was continuous coordination of steel, CIP concrete, precast and GFRP panels. Structural and mechanical/plumbing models were coordinated at end of design development and then at two weekly intervals.
Timely correction of the model at all stages facilitated detailing work and resulted in a reduction of detailing hours from 1,600 to 1,050 (planned versus actual).
GRFP Exterior panels: Design, fabrication and erection of the GRFP panels were all enhanced by the interoperable BIM process. The GRFP panel outline was modelled for coordination with the structural frame and this identified many conflicts that could be corrected before the design was handed over to the fabricator.
The model included x.y.z target coordinates for bracket locations of the GFRP panel connections to the structure. The automatically extracted erection drawings and survey data were interoperable with a total station to enable accurate placement on site.
