choosing the right delivery method

Just as the old brick and mortar stores are being phased out, so too are we seeing a shift in the way residential projects are being built.

Traditionally, a project would progress from Design (Architecture/Engineering) through Bidding and finally into the Construction Phase. While this linear delivery method allows for multiple Builders to bid the same set of drawings, it can also mean unintended delays due to cost over-runs and consequently re-design. This method is a single contract between the Owner and the Builder.

Currently, we are offering Owners an alternative to individually bid each Trade (i.e., Electrical, Plumbing, Framing, Demo). This method, Construction Advisor (CA) is an additional service to our basic architectural services that places the risk on the Owner instead of a General Contractor. As with any risk, there are some benefits, in this case saving as much as 20% off the overall cost of construction.

How is this achieved? You have to first understand that the Design-Bid-Build method is a single, lump-sum price for the whole project with a markup for overhead and profit between 30-40%. The General Contractor rarely will breakdown this lump sum cost because it may invite scrutiny regarding certain components, such as the line item cost for Tile or Cabinets. Which can be researched online by the Owner to compare prices for materials and derive what the markup for labor and profit might be.

An Owner, may then request to pull these items out of the contract to control cost overruns. This is not as profitable for the General Contractor and most will not operate in this fashion. It is understandable that they incur risks (insurance, workman’s comp, and bonding) and some will offer a longer warranty period.

As an Architect/Construction Advisor, we can leverage our knowledge of the design and construction sequencing to solicit individual trades to bid on their portion of the work. We can then compile a list of bidders and write individual Purchase Orders for each trade. We can even assist you with the purchasing of materials and fixtures (tile, faucets, cabinets, windows, doors, etc.) by contacting local show rooms and arranging for delivery and storage. Under Architect - Construction Advisor services, you get the benefit of years of construction experience without the 30-40% markup. The main reason is that the Owner will assume all the risks for their project and that the construction schedule may take longer, depending on the scale of the project. For this additional service, the Architect limits its fee to 15% on each Trade contract and Purchase Order negotiated.

If you would like to know more about this service, call Pablo and we can send you a sample agreement and amendment.