2.4. Project Delivery Method Analysis

2.4. Project Delivery Method Analysis

An unconventional method was established for the 620 N 3rd Project due to the specific circumstances. First, the Owner, PRDC Properties, is a real estate development company, which implies the assumption that, in this case, the client has experience with construction. Second, the plot of land has already been purchased through an expected deal and the loan payback is scheduled to start in 2020. This scenario tells that, unless this project happens as scheduled, starting in 2018 and ending 2020, financial losses due to underutilized resources will start to incur. It’s important to note that, for higher efficiency during construction, the beginning of Spring and all of Summer is the ideal time to develop the work.

The Designers, due to the unexpected nature of the deal on the plot, were hired on an urgency basis to develop the project. Consequently, the incompleteness of the construction drawings was made evident during the bid, closed to pre-qualified contractors, including Fit Construction.

Given the scenario, a complicated construction process could be foreseen with too many change orders, delays and relationship issues. To help solve this puzzle, Fit Construction came up with a strategy to help avoid these risks while transforming those into opportunities. The method is composed of two parts:

1) Bid and award: Before and during the bid process, a traditional Design-Bid-Build with a lump sum was utilized. Fit Construction received the set of construction documents, estimated the costs and submitted the bid to PRDC Properties, having won the job.

2) Preconstruction, construction and closeout: As stated previously, the incompleteness of the construction documents was made evident during the bid. Fit Construction and PRDC had previously worked with a multi residential building in Philadelphia and, therefore, had a pre-established relationship which influenced the contracting company selection. After winning the bid, Fit Construction approached PRDC to discuss the work. In that meeting, the complex variables were listed and the decision for an integrated project delivery was made. The contractual relationships were maintained as traditionally, between the Owner and Contractor, and Owner and Designer separately. Likewise, all the subcontractors are contractually obligated to Fit Construction, not PRDC. The lump sum number established during the bid was set as a baseline on a cost plus a fee basis but Fit and PRDC agreed that many project changes were inevitable, and that flexibility was essential. For that, a monthly meeting with Owner, Contractor, Designer and main subcontractors was established. In these meetings, the project team would bring issues regarding the following months’ worth of work and discuss what changes could provide value engineering to the work. These changes, once approved by all relevant project participants including the Owner, would then be incorporated to the project. To ease the weight of a changing budget, Fit Construction agreed to work with open books, on a cost plus a fee basis with PRDC, who would have full transparency and control over the project. Additionally, an Incentives Program was laid to stimulate results. Further details of the 620 N 3rd St delivery methods are explained under Section Six of this manual.