In general, there are two main options available to owners/developers for commercial construction projects: Traditional Lump Sum Tenders and Construction Management. Construction Management is by far the best way to proceed as I will outline below.
Traditional Lump Sum Tender Outline:
- Owner hires architect
- Architect hires consultant team
- Design team works with owner group to develop concept, floor plans, elevations, budget.
- Multiple revisions of drawings are prepared for input from owners group.
- Issued for tender drawings are prepared.
- Project is tendered to general contractors ( 4 week process )
- Tender pricing is submitted by contractors and reviewed by owner group.
- Contract awarded to successful contractor.
- General contractor mobilizes to site to start construction.
Construction Management Outline:
- Owner Hires Construction Manager.
- Construction Management fees are agreed to as either a percentage of construction costs or lump sum in accordance with CCA26.
- Construction Manager provides input on hiring of consultants.
- Architect works with owner group & construction manager to develop concept, floor plans, elevations, budget.
- Architect and construction manager hires consultant team.
- Team develops drawings with advice from construction manager on budget and constructibility , design is developed to ensure scope of work matches budget.
- Project is tendered to suppliers and subcontractors with results reviewed by team.
- Construction Management lends itself well to phasing and pre-tendering of portions of the project before design is complete.
- The Owner/Developer has the option, if he so chooses, to switch the project to lump sum construction fee for project certainty.
Benefits of Construction Management:
- The ownership group has control in choosing Construction Manager to ensure this vital role is performed by a well established, professional, competent contractor.
- Owner, Consultants and Construction Manager work together from the onset of design as a cooperative team.
- Owner has the same team through design and construction phases for continuity.
- Construction Manager participates with consultants on constructibility issues.
- Construction Manager controls budget through the design process.
- Construction Manager tenders and awards subcontractors and suppliers after reviewing with team.
- Construction Manager is in charge of on-site construction and a single point of contact throughout the construction and post-construction phases.
As you read through this article, the benefits become apparent. By appointing a construction manager, they can quarterback the entire process for the owner/developer. Consistency and continuity is provided to ensure all stakeholders are “on the same page” and are in agreement thought the process. This ensures the ultimate success of the project to come in on budget and on time.
As a commercial brokerage, Catalyst Financial works with both the Ownership Group/Developer and the Construction Manager to ensure that the project funding requirements are met, both during the construction phase and at completion-term financing phase.