NEW YORK CITY COLLEGE OF TECHNOLOGY

FMGT 4760: CONSTRUCTION PLANNING AND MANAGEMENT I

CLASS NOTES

FOR

Lecture #9: ARRANGEMENTS OF CONTRACTS FOR CONSTRUCTION

(Readings: Construction Contracts, Part 1.10, pp 163-180 and notes)

Introduction

Page 163 to 164 discusses briefly in definition form the Owner, Designer, Designer’s Consultants, Construction
manager, Contractor(s), Management Contractor, Subcontractor(s)Sub-Subcontractor(s), Supplier(s), Quantity
Surveyor, Project manager. Please review for your clarity and understanding and complete reading of section.

Owner and Contractor

If the owner has the land and the financing and the builder has the necessary experience and skills others may
not be necessary to participate in the contract. Most residences are built by one contractor-designer and
subcontractors. Building maintenance and renovations are done by the owner and a contractor with one or more
subs. Buildings age and public demands and economics demand that some buildings be preserved requiring
expensive maintenance and renovation. Costs are not easy to determine with these types of buildings and an
experienced spec writer, schooled in renovations need to determine these costs. For re-engineered and
prefabricated buildings, a contractor is required for site and substructure work and a supplier erects. The prefab
building. Utility type buildings (warehouses, factories and plants) are built by owners who engage a builder who
in turn engages a engineer-designer (A/E).

Owner, Designer, and Contractor

This triad is commonplace in the industry. The traditional contracts see these players. The owner has at least
two contracts one each with the designer and the contractor. There may however have more than one
contractors on the project each having a contract with the owner.

A designer can form a Design/Build joint venture and offer design –build services to enable fast-track design
and construction services.

Owner, Designer, Project and Construction Manager and Contractors

Figure 1.9.1 depicts the several arrangements of contracts within which these players can participate.

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Figure 1.9.2 shows the benefit of using a phased construction approach in a CM contract over the conventional
approach to designing, bidding and construction of a project and the economies to be gained. Pages 167-169
outline the deliverables that a CM would be required to provide to the owner for a lump-sum fee to manage the
prime contractors on the site and do design constructability exercises with the A/E. Note the process for hiring
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the CM on P 167 whereby an RFQ is issued, a select list is prepared (five or more CMs) and that list gets the
RFP for bidding. The selection will be based on a selection of the criteria listed on Pages 167-169

The Owner and Contractor-Designer

This is the traditional Design/Build relationship where the contractor Joint ventures with a Designer and
engages in one contract with the owner to design and build the project with construction taking place as soon as
an element is designed. If decoration and aesthetics is not a prime concern the design/Build approach is good.
The Turnkey type projects are a variation to the design/Build projects and are more suitable for commercial
design but in these projects, the Design/Build Investment Team provides the funding.

Homework #9
Read the Chapter and do the following for your review:

Page 179, Question #1

Page 179, Question #3