The “contracting type” guardrail refers to the project delivery method or procurement type of a construction project.
Example contracting types include:
- design build*
- cost plus
- fixed price
- not to exceed
Contracting type is an important guardrail to put on construction projects because it influences the project health throughout the engagement. When the contracting type allows for close relationships to be formed between the parties, clear roles and responsibilities are established. This in turn facilitates effective communication.
Triumph’s guardrail for contracting type is that it should allow for an open, collaborative relationship when possible. Ideally all project participants, including the builder, have an equal footing at the table and are regarded as nothing short of a peer.
In contrast, with public bidding and design-bid-build contracting types, relationships aren’t formed in advance of contracting and adversity often follows. My underlying theory here is that personal relationships are required to work through the type of complex issues that are inherent in construction.
Weak or distant relationships between builder and owner/architect are more harmful to construction projects than people are inclined to talk about. In fact, it may be the leading cause of problems in construction.
In closing, what we have seen is that projects that provide an environment for open collaboration prior to forming a contract are more successful overall.