The Team Approach to Construction is a way to give all involved valuable input.When undertaking the challenge to construct a project, the developer faces a formidable task. The challenge of residential home building construction is basically two part: first, the design plan must meet both the functional and aesthetic needs of the buyers; and second, the project must be kept within the market driven budget.
While seeming to be mutually exclusive, the two parts of the challenge can be attained very effectively through a management strategy commonly referred to as the team approach.
The team approach is a delivery strategy which employs the talents of the same group of participants found in any building project, but combines their talents in a business relationship which produces the desired results with greater certainty.
Appropriately titled, the team approach permits the gathering of participants (namely the owner, architect, general contractor. construction manager, interior designer, estimator and other building consultants) at the outset of the project. From that point forward they all work together as a team toward a common goal.
The common goal? A completed building project which meets the owners' requirements for function, quality, completion time, and market driven budget.Traditionally, the general contractor and construction manager has been excluded from the preconstruction phase of a building project and has been asked for assistance after plans are complete by way of the competitive bid. However, increases in the cost of construction, the rise in financing charges, and the problems intrinsic to this method have given owners cause to seek an alternative means by which to achieve the most value from their construction expenditures. The results have shown that, because the traditional method lacks the continuity necessary to maximize the owners' investment, many owners are waiving the traditional method in favor of the team approach.
Implementing the traditional method. the owner commissions an architect to produce a set of construction plans which will be distributed to a number of general contractors so that each may formulate a lump sum price based on bid documents for submittal to the owner In most instances, the project will then be awarded to the general contractor submitting the lowest price.
The persuasive arguments for the traditional method are management simplicity and cost confidence. Working with only the architect through the design phase will simplify both the owner's and architect's management responsibilities. Awarding a contract based on the lowest bid provides the owner with a feeling that the lowest cost has been achieved.
So what are the flaws of the traditional method? It takes too long and it costs too much.
While the traditional method is prudent in theory, it provides some pitfalls that can cause lengthy delays and budget overruns. The primary weakness creating these pitfalls is that the design phase is isolated. The traditional method excludes the people (the contractor, construction manager, procurement and systems engineer) who are most familiar with the costs and mechanics of construction from the design phase, which is when costs and construction problems are built into a project. Once design is complete, changes are costly and time consuming.
Generically, any construction project of sufficient magnitude is complex. In most situations the design of a project will take advantage of unique building materials and custom construction methods to create a distinctive image for the end users. The use of these uncommon materials and methods only add to the challenge of designing the project that can be completed within budget.
When working to meet the owner's design criteria, the architect may inadvertently incorporate costly construction systems or building materials into the design. Generally architects do not have experience with actually buying material, equipment, and labor, making it difficult for them to estimate the impact of each design element. Most architects welcome the input of an experienced construction manager, contractor, procurement and systems engineer who can provide accurate cost estimates and, when necessary, provide design alternatives.
It becomes evident that the advice of a contractor can be of considerable value during the design phase. When design, bidding, and construction are separated, it is rare that the construction documents fully express the owner's wishes to the contractor. The contractor is presented with plans that could have been improved upon if the contractor had understood early enough the intentions behind them.
The competitive bidding procedure directs the contractor to do everything the cheapest way instead of the best way. It is in the owner's best interest to make intelligent compromises between cheapest and best, but at the bidding stage, control over these decisions is lost.
Conversely, the team approach enables the owner to make intelligent compromises based upon current cost information provided by the participation of a construction manager, general contractor, procurement and systems engineer during the planning phase. The results are that costly change orders required to achieve desired quality during construction are kept to a minimum.
Without the participation of qualified construction manager, contractor, procurement and systems engineer, and general contractor to provide cost estimates as plans develop, there is no assurance that the project will fall within budget when put out to bid. If bids received do exceed the allocated budget. the owner is left with three options:
1) redesign the project, (a costly and time consuming effort),
2) contribute additional funding (more equity or revision to the construction loan), or
3) cancel the project and absorb the design fees.
With the selection of the proper team members, the team approach will help you avoid a situation requiring a choice from these three undesirable options.The essence of the team approach is to bring a team of experts together so that the owner achieves his goals for function, quality, completion time, and budget. Selection of the team members should be based upon the prospective members' experience with the specific type of project to be constructed.
The architect, construction manager, contractor, procurement and systems engineer along with the owner will be the most important players leading to the eventual success of the project. Other members of the development team will include the interior designer, structural engineer, mechanical engineer, electrical engineer and several other building consultants. Both the architect, construction manager, and general contractor can be very helpful in their selection.
Initially, the architect works with the owner to evolve a preliminary design which meets the owner's program requirements. Once a preliminary plan takes shape, the construction manager, contractor, procurement and systems engineer are then able to develop a preliminary estimate and set a preliminary completion schedule based on his experience with similar projects. If the plan is approved by the owner, the estimate then becomes the target budget and a completion schedule is agreed upon between the owner and team members.
So, at this early stage of development, prior to the start of working drawings, the owner already has the confidence provided by credible and responsible sources that the desired plan will fall within budget and be completed within a specified time frame.
The underlying principle of the team approach is that when the owner, architect, and construction manager, contractor, procurement and systems engineer work toward a common goal the results are much more predictable than when design and construction are segregated as in the competitive bid method.
The formidable task presented by large project can be met successfully if the project is managed properly from the start. It may require an increased effort on the part of all team members during the planning stages, but the team approach provides the owner with the best management framework to achieve his goals for a successful project, built to the highest standard of quality, completed on schedule, and delivered within budget.
The selection of the remaining team members is then completed. With the construction manager providing the coordination, the team develops a plan to implement the owner's approved goals with predictable results. The decision process regarding construction methods or material selection follows a sequential procedure based on the input of all team members. Local market conditions, construction techniques, and lead times are all analyzed with regard to their impact upon the project prior to being incorporated into the design and budget. The owner also provides critical input since decisions made may require budget revisions and time schedule adjustments.
When the team completes a set of construction drawings the construction manager, contractor, procurement and systems engineer will then begin to determine the fixed construction costs for the project by soliciting qualified and competitive subcontractor prices and material prices.
Again, every building project is unique. It is not only vital that the architect, construction manager, contractor, procurement and systems engineer has expertise in the particular type of construction, but it is equally important that each subcontractor brought to the project is well qualified for his scope of responsibility. It is the duty of the construction manager and general contractor to thoroughly qualify each subcontractor that will be included in the construction of the project. Failing to do so, and selecting a subcontractor solely on the basis of price will jeopardize the success of the project.
There are several contractual agreements that may be entered into between contractor and owner. The negotiated stipulated sum agreement, whereby the owner receives a lump sum price from the contractor prior to the start of construction provides the best cost security to the owner.
This lump sum price is presented to the owner by the contractor at completion of the project pricing effort. A recent and very popular alternative is the cost plus, a fee with a not-to-exceed maximum contract amount (a percentage share arrangement of all cost savings below the guaranteed maximum is pre-negotiated between the owner and general contractor). This allows the owner the benefits of the fixed-price contract with the added benefits of knowing exactly what was spent on his project (Contractors books are made available to the owner at all times and accounting is prepared at each billing).
It is at this time, that the results of the team approach begin to materialize. In all likelihood the constant budget monitoring during plan development has resulted in a building cost within budget. Redesign efforts are avoided, saving time and money for all team members. The ability of the team to provide accurate input at the preliminary stages of the project also results in the earliest possible start date and permits the project to move ahead as scheduled.
During construction the owner enjoys the advantage of working with a construction manager and general contractor who has participated in the decisions and development of the drawings. The team approach creates a relationship between team members in which any problems that may arise during construction are perceived as shared. The communication that has been established during the planning phase permits problems to be resolved quickly. Change orders are handled by the team in a spirit of cooperation and the architect, construction. manager and general contractor work together to the benefit of the owner.
The overall construction time is reduced as a result of this spirit of cooperation and by the fact that long lead items are identified during preconstruction and ordered appropriately.
In summary, the negotiated team approach is an effective management strategy which enables the owner to maximize the value of his construction investment through greater control during plan development.
The architect, interior designer, and particularly the construction manager and contractor who are responsible for budget control and construction should all have qualified experience and all should express a willingness to work as team players.