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Traditional General Package Deal Management Contracting Construction

Contracting (TGC) Management (CM)


Inception and feasibility stage 1) a form of contractual arrangement
1) The employer appoints a - implementation preliminary stage of whereby a contractor is paid a fee to 1) Similar to the management contract.
professional team who develops the project manage the building of a
project brief, detailed design, - identification of objectives project on behalf of the client 2) Main parties are namely the employer,
- setting up the users needs
specifications, drawings and bills of the professional team, the construction
- resolution of all land issues
quantities. - conducting feasibilities studies 2) engaged to undertake planning manager and the works contractors.
- setting up organisation structure and programming all stages/activities
2) The employer or the professional - sourcing up funds or financing of the project 3) Existence of direct contracts between the
Main Activities

team initiate the tender process employer and the members of the
where bids are called, the contractor Tender documentation 3) contribute his experience on build professional team, the construction
submits his tender bid and bids - setting up of the employers ability to the design process manager and the various works
subsequently evaluated and requirements contractors.
recommended. - identification of tenderers, 4) coordinate and control time, cost
- type and form of tenders and quality over the works 4) Entire organisation is a collection of
- preliminary estimates/cost plans
3) The contract is awarded and contractors parallel direct contracts though differing in
construction commences whilst the Tendering process the duties, obligations and liabilities.
professional team administers. - issuance of tender documents 5) provide site facilities for the works
- tenderers preparing contractors.
4) Contractor hands over completed - submitting contractors proposals
works to Employer and professional - evaluation of tenders *extends from the pre contract to the
team reviews and certifies the - issuance of letter of acceptance end of the post contract stage.
construction.
Detail design
- design development 1) Employer wants an independent
- finalisation of specifications
1) Client seeks integral involvement - awarding subcontracts
design team. 1) Employer seeks construction expertise
in design. - finalising of all costing on design team.
2) There is a need for early
2) Client wants design fully Construction completion. 2) Employer wants reduced project delivery
developed before construction - site possession, time.
3) The project is fairly large.
starts. - mobilisation of material, labour and
plants, construction 3) Employer needs reduced management
When To Use

4) Project requirements are complex.


3) Client needs a fixed price before - contract management by contractor of multiple prime fast tracked construction.
beginning construction. - carrying out contract administration by 5) The project may entail changing
contractor the employers requirements during 4) Complexity, schedule or commitment to
- project financing. the building period.
4) Client has time to invest in linear budget objectives is critical.
process. Handover and maintenance 6) The employer while requiring early
5) Client seeks protection of well 1) Employer is hands off in regard to competition wants the maximum
understood delivery process. design.
possible competition in respect of the
price for the building works.
2) The proposed project is of a complex
nature

3) Single point responsibility is required.


Traditional General Contracting Package Deal Management Construction
(TGC) Contracting Management (CM)
1) Time tested method. 1) Speed from inception to 1) Speed from inception to completion (design
1) Single point responsibility completion (design & construction & construction overlapped , allows fast
tracking)
2) Familiarity of industry overlapped)
2) Speed of procurement 2) Greater flexibility for changes (late changes
2) Greater flexibility for changes (late can be accommodated)
3) Better work control
3) Permits price certainty changes can be accommodated)
3) More utilisation of expertise of construction
4) Single point statutory 4) Product fit for purpose manager. Issues of constructability, cost and
3) Benefit of the contractors expertise
responsibility/liability schedules can be addressed during design.
(promotes build ability and cost
Strengths

5) Design benefits savings)


5) Permits use of specialist 4) Contractor in team reduces adversarial
contractors nature of process
6) Better flexibility and build ability 4) Contractor in team reduces
(design alternatives are reviewed by adversarial nature of process 5) Better communication lines
6) Permits price certainty 6) Versatility in application
builder during the construction
5) Better communication lines 7) Employer retains control of design
7) Minimises professional conflict process combined with construction
6) Versatility in application 8) Direct contractual relationships
expertise)
8) Through resolution of design 9) Separation of design from management
prior to construction 7) Simplified contractual arrangement, 7) Accommodate whole range of
coordination and decision making complex projects 10) Employers involvement highest
9) Flexibility of change
8) Employer retains control of design 11) Offer employer flexibility in tendering
1) Adversarial in nature 1) Employer bearing high contractual 1) Employer bearing higher risk (higher than
1) Difficult to evaluate risk management contracting
2) Slowest in overall project duration
(design and construction 2) Employers involvement minimal 2) Employers contractual remedies 2) Higher employer resources and
unclear administration problem (cost control of fast
sequential) tracked, multiple prime contracts)
3) Problems with design liability
3) Not suitable for employers who
3) Slow line of communication 3) Enhanced employer responsibility
lack experience.
4) Potential conflict of interest
4) Lack of price certainty
4) Relatively inflexible
Weakness

4) Lack of price certainty


5) Compromise in quality & aesthetics 5) Relatively expensive
5) Limited use (unsuitable for large (purchase of a complete package) 5) Relatively expensive
and complex projects 6) Coordination problems (Additional sets of
6) Higher professional fees outlay 6) Coordination problems relationships)
6) Contractor unknown when 7) Site security problems 7) Site security problems
construction documents are
prepared 8) Limited employers involvement 8) Limited employers involvement

7) Employers involvement relatively 9) Legal uncertainty 9) Legal uncertainty


limited
10) Possible time pressures on 10) Unresolved/unclear responsibilities/roles
design
11) Increased claims and disputes