What are the challenges of construction management and how does Daoust Construction approach them?

A guaranteed cost does not exist when the owner begins construction cost commitments.

Trade lump-sum contracts covering nearly 90% of the project value are awarded, which will confirm the established budget. A lump-sum general contract is not a guarantee of a maximum price; it is often the starting price, followed by extras and impact and delay costs.

Costs for all units of work may be established before construction begins, but with the penalty of extending the schedule.

Lump-sum contracts for most trades are awarded early in accordance with the project schedule. This may require splitting an all-inclusive contract into smaller or phased contracts.

There are few trained construction managers who understand the team relationship required by the construction management process.

Daoust Construction has specialized in construction management since 1974. Most of our projects are delivered with construction management. In addition, one of the principals of the company is directly involved as the project director on each job. The close involvement of a company decision maker speeds up the process and stengthens our ability to motivate trade contractors to perform.

Construction management replaces the general contractor and subcontractors with an array of trade contractors. This may be a drawback because it substitutes an array of prime contracts for the single contract between the owner and the general contractor.

Our approach to managing trade contractors is similar to the approach used by general contractors. We often issue all trade contracts on behalf of our clients – as would be done by a general contractor or constructor – and make payments directly to the trade contractors. This permits the client to deal with Daoust Construction rather than a maze of trade contractors. An array of prime contracts can be an asset if one of the contractors fails or is replaced. In this situation, an array of contracts limits the effects to one trade rather than to the overall general contractor.

The multi-prime nature of construction management, by requiring every contractor to bid and furnish a bond, eliminates a sizable segment of the industry – contractors who cannot obtain bonding.

There are many alternatives to bonding that are easily accessible to most trade contractors. These alternatives permit smaller trade contractors to provide performance security in a form that can be more advantageous than bonding. This flexibility also saves money by eliminating the layering of bonds commonly provided by subcontractors to the general contractor.

Daoust Construction’s knowledge of market conditions and reputable trade contractors, coupled with the experience of consultants and the owner, is sufficient to identify risky trade contractors who should be required to provide an acceptable form of performance security. All interested trade contractors are required to submit a pre-qualifying document prior to bidding for the purpose of risk evaluation. Performance security will be obtained whenever appropriate.

The design team, if behind schedule, can greatly affect the construction schedule and the completion date. This situation does not exist in the general contracting process, where all the documents are ready before construction starts.

After having produced a construction schedule, Daoust Construction, through consensus, will establish dates for having the bid packages ready and will monitor progress.

Sometimes, when design schedules slip, the readiness of bid documents is jeopardized. General contractor bids can be considerably over budget, and this situation is not easily corrected when the bid documents are 100% complete. Construction management has the flexibility to allow stages of the work to begin and proceed while the balance of the documents are being completed.

A typical administrative problem is getting timely cost reports and forecasts in order to make necessary decisions or adjustments.

Daoust Construction provides detailed sub-job reports and prepares budget forecasts at least monthly. Cost backups are also provided with every progress billing.

Trade contractor performance needs to be monitored.

To protect a project against incompetent trade contractors, Daoust Construction prepares a list of preferred bidders (published for pre-qualification or expression of interest). We communicate the project’s guidelines at orientation meetings. We give immediate notice when a trade is not proceeding satisfactorily. We have adapted specific Supplementary General Conditions clauses to increase our effectiveness in this regard. We maintain accurate minutes of meetings and a daily logbook.

Navigating through the maze of drawings, sketches, site instructions and change orders can be difficult.

Ultimately, construction management requires no more documents than any other project delivery method. There are, however, more updates to the documents. We control these updates and ensure that all parties are working from the latest version. We maintain an accurate filing system at our main office and the site office. The project manager, project co-ordinator or chief estimator will review and process all shop drawings and design documents as they are updated.

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