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The Four Types of Project Organizations in Construction

There are FOUR major types of project organizations on construction projects. We will provide a detailed review of the benefits and shortcomings of each type in upcoming blogs.

Four Types

1. Design Bid-Build (DBB) - This is the traditional model wherein the Owner, A/E and General Contractor (GC) are three separate entities.

· The GC (also known as the Prime Contractor) performs under a firm, fixed-price contract.

· The GC is selected via a competitive bid process; the project is almost always awarded to the lowest responsible bidder.

· Design risk is borne by the Owner because the A/E works for the Owner.

· Subcontractors work directly for the GC

2. Construction Management at Risk (CMAR) – The CMAR holds the construction contract and is responsible for project delivery.

· CMAR is brought on board early in the design process.

· Subcontractors work for the CMAR.

· Design risk is borne by the Owner because the A/E works for the Owner.

· The Owner and the CMAR negotiate a Guaranteed Maximum Price (GMP) prior to the start of construction.

3. Agency Construction Management (CM) – CM acts more in an advisory capacity to the Owner.

· The Owner holds separate contracts with the CM and the A/E.

· The CM is NOT responsible for the design.

· The CM is paid a fee for professional services.

· The Owner holds all trade contracts directly.

4. Design-Build - The Design Builder (DB) is the prime contractor and its team includes the A/E.

· The DB is responsible for both design and construction.

· The project is awarded using either a one-step Request for Proposal (RFP) or two-step Request for Qualification/Request for Proposal (RFQ/RFP) process.

· Project award is based on multiple criteria including cost, team experience, technical merit and schedule.

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