Management Contracting Flashcards
Give a brief explanation of management contracting.
Procurement route where works are carried out by a number of different works contractors who are contracted to the MC.
Give a brief explanation of construction management.
Works carried out by a number of trade contractors who are contracted to the client but managed by the CM.
How does MC differ to CM.
CM acts solely as a manager and is not in contact with the trade contractors, it is the client who manages the trade contractors. Unlike the MC who manages works contractors.
Give 3 advantages and 3 disadvantages of each route trying to prioritise them.
MC adv: flexibility in design, client retains control over design, time benefits.
MC disadv: not good if you are an inexperienced client, MC unable to prove loss for damages, potential lack of specialists in the market may lead to unproductive gaps in work.
CM adv: reduced project duration, 1 to 1 contractual relationship, client can retain design control.
CM disadv: unsuitable for inexperienced clients, could be co-ordination or communication issues with many contractual relationships, client needs to be proactive.
Provide 3 scenarios of when to use each route.
MC:
- short design and construction periods required
- flexibility required, complex projects where design is not complete
- design innovation wanted
CM:
- Large, complex projects where CM’s expertise can be used
- where price certainty before commencement is not a priority
- where the client is experienced
How does MC differ to Traditional and D&B.
- MC is appointed to manage the subbies and does not have to have control over the design, unlike in D&B were the contractor manages every aspect.
- In traditional, the design is completed by one contractor and build by another , they are separate. Also design has to be complete before beginning build.
3 advantages and 3 disadvantages of MC and try to prioritise them.
Adv:
- different trade packages can lead to higher quality being achieved by specialists
- earlier start on site as design does not need to be complete - reduced project duration
- client can move some of the risk to the MC as they are managing the project and trade contractors
Disadv:
- not good for inexperienced clients as work normally begins before the nature of the completed building is known
- cost risk of over running and design changes
- not widely used in industry
Provide 3 scenarios of when to use each route in relation to T, C, Q.
MC:
T- when an early start on site is required
C- when price is not a priority as this will not be known until final works package
Q- when high quality is required as MC can input into design stage and where design flexibility is required
CM:
T- when an early start on site is required
C- when price is not a key concern as price may not be known until final works package
Q- when CM can have input into design and help on buildability - greater quality required
What are the main risks to the client.
In MC, the risk can be transferred to the MC as they are managing the trade contractors, however in CM the risk lies with the client as they have the contractual relationship with trade contractors.
Risk if the client is inexperienced because they will have design control.
Cost risk - risk of final cost being greater than expected and this is not known until final works package.
What are the different ways in which the fee can be calculated.
- Percentage fee
- Fixed fee- which is based on the cost plan - Guaranteed maximum price
- Target cost - shares benefits and losses
How are the subcontractors/work packages awarded? What advantages does this give?
MC:
Client’s cost consultant, the MC, in cooperation with the designers decide how to package the works and direct the team as a whole to produce package designs suitable for obtaining subcontractors.
Adv: allows for parallel working on design and construction.
Nominated subcontractor
Named subcontractor
