Engineering and Construction

An owner wishing to construct a building hopes to achieve a fi nished project that meets its functional requirements and its expectations for design and quality, at the lowest possible cost, and on a predictable schedule. A contractor offering its construction services hopes to produce quality work, earn a profi t, and complete the project in a timely fashion. Yet, the process of building itself is fraught with uncertainty: It is subject to the vagaries of the labor market, commodity prices, and the weather; despite the best planning efforts unanticipated conditions arise, delays occur, and mistakes are made; and the pressures of schedule and cost inevitably mini-mize the margin for miscalculation.

In this high-stakes environment, the relationship between the owner and contractor must be structured to share reasonably between them the potential rewards and risks.

⇒ Construction Project Delivery Methods   In conventional design/bid/build project delivery (Figure 1.8), the owner first hires a team of architects and engineers to perform design services, leading to the creation of drawings and...

⇒ Paying for Construction Services   With  fixed  fee or  lump sum compensation, the contractor or other construction entity is paid a fixed dollar amount to complete the construction of a project regardless of that entity’s actual costs. With this compensation method the owner begins construction with a known, fixed construction cost...

⇒ Sequential versus Fast Track Construction