6 critical areas of focus to help the construction industry have more success !
Cone 2 : “Contracting Type”
I called an experienced construction lawyer and asked “what is the difference between Contracting Type and Project Delivery Method?… $350 dollars later, I didn’t have any clue ..ha ha. With all due respect to my outside counsel of course .. but please keep in mind that I spent three years at Boston University Law school and passed the BAR exam on the first try 😊. I like the words “Procurement Type” or “Contracting Type” much better. Many folks in our industry use the words “Method of Project Delivery.” I just don’t find it helpful terminology because I like words and phrases that create shared meaning over time by many.
The real issue here, however, is not so much about the meaning of “Method of Project Delivery”; It is about whether the type of procurement method chosen will enable a healthy project !
No matter what you call it, to the extent that an owner’s (or an architect’s ) procurement process distances relationships — intentionally or not — this will not allow clear roles and responsibilities to form and fail to establish an essential platform for effective communication. The ideal condition is for an Owner (designer and/or OPM) to create a procurement environment that seeks to form personal relationships with the builder prior to contracting.
Environments such as certain public bidding, and Design-Bid-Build, where relationships are not formed in advance of contracting will often be followed by adversity. The source of this can seem perplexing to many. My underlying theory here is that personal relationship is required to work through the type of complex issues that are inherent in construction. This may sound “touchy feely” or philosophical and is clearly a topic that many people don’t wish to confront. I believe it is more harmful to construction projects than people are inclined to talk about. It may be the leading cause of problems in construction.
Builders end up accepting jobs — for whatever reasons — where the bargaining relationship from the outset causes unhealthy relationship dynamics from the start, and these are the invisible signs of “war” that continue until personal relationships are formed. I am not saying this is anyone’s fault. It may just be an “inborne” result of a lowest cost wins procurement process.
In closing, what we have seen is that projects that provide an environment for collaboration prior to forming a contract are more successful overall, than those to do not. Owner’s procurement type must enable all project participants, including the builder, to have an equal footing at the table and be regarded nothing short of a peer. There are ways that owners can be assured to test the best market pricing while also collaborating with one qualified contractor in the earliest stages of their project.
More on that to follow. For now, I want to journey to the next stop along the guardrails .. 😊