Contracting strategies. Unique projects require varied strategies for bidding and execution: Fid-Bau Portal

Contracting strategies. Unique projects require varied strategies for bidding and execution

McKelvey, J. / Sanglerat, T.

Because every construction project has unique issues that need to be addressed, using a technical approach for a specific project may not necessarily be the best approach for another project. Similarly, the optimum contracting strategy to use will vary from project to project. Four main contracting options are available to project owners: Design/Bid/Construct (DBC), Engineering, Procurement and Construction Management (EPCM), Engineering, Procurement and Construction (EPC), and Turnkey. These contracting strategies are discussed in the article but financing options for design and construction are not addressed. In a DBC contract, an engineering company prepares the design, construction drawings, specifications and other construction documents necessary to solicit bids from contractors for construction. Construction is contracted separately by competitive bid. In an EPCM contract, the owner is provided with the following types of project elements from a single provider: design a list of pre-qualified bidders for construction; an evaluation of bids providing ranking and recommendations for selection of construction contractors; and construction management and construction quality assurance. The EPCM contractor may procure some of the construction materials on behalf of the owner, but he does not provide construction services. An EPC contract includes the scope of services under EPCM as well as the construction phase of work. The owner/operator retains control of the scope of work and has a single company as point of contact for the project. Under a turnkey contract, responsibility for the entire project is essentially shifted to the turnkey contractor for a lump-sum fee, annuity, or other financial mechanism. Both control of the scope of work and liability for the whole project is shifted to the turnkey contractor, usually for a fixed dollar amount. All four approaches to procuring project construction services have advantages and disadvantages. When determining the preferred contracting strategy for a particular project, the relative importance of the following criteria need to be evaluated: complexity, cost, flexibility and control, schedule, technical performance, liability and risk, and long-term commitment.