Lesson 05_Delivery Methods

Question 1

A FIXED-PRICE STRUCTURE

Answer 1

allows the manger to establish a guaranteed cost of construction, including his or her own services, before the design is fully documented. The owner is not liable for bid-cost overruns. However, the owner does not obtain any of the savings that might occur from a positive bid climate.

Question 2

A COST-PLUS STRUCTURE

Answer 2

allows the construction manager to charge the owner the actual construction costs of the project plus a negotiated fee that is agreed to before construction begins.

Question 3

The GUARANTEED MAXIMUM PRICE (GMP) STRUCTURE

Answer 3

is a highest-probable-cost limitation for the construction of the project guaranteed by the construction manger. Any cost savings from a positive bid climate go to the owner rather than the contractor.