Phase 5 Flashcards
Study period
A set period (specific contained period possibly within a larger period of time) that is being used to compare to another project with the same study period, or for the purposes of evaluation of the investment.
Subcontract
Hiring another company to do part of the work you have been contracted to do. Usually arises when a general contractor is hired by an owner to oversee and perform work, but will hire other companies to do some portion of the work
Subcontractor
The party contracted by the general contractor to carry out specific tasks in a construction project. Does not have a contract with the owner
Sunk cost
A cost that has already been incurred and cannot be recovered. Sometimes contrasted with prospective costs, which are future costs that may be incurred or changed if an action is taken. For example, the costs of purchasing machinery or capital for a project in the past is considered as sunk costs, and cannot be recovered.
Time value of money
Money available at the present time is worth more than the same amount in the future due to its potential earning capacity.
Uniform cash flow
a cash flow that has equal amounts for each given time period. For example, if a machine requires $200 of upkeep every year over its lifetime, then this will be a uniform cash flow
Professional Construction Manager
Owner may hire a professional construction manager to act as an owner’s representative. This may be the case when the owner lacks the expertise to make informed judgements regarding the relative strengths and weaknesses of different project opportunities.
Traditional
Owner has two independent contracts: one with contractor, one with designer. Contractor in charge of subcontractor and has own work force.
Design Build
Owner has one contract with engineering contractor. Engineering contractor hires design and general contractor with two independent contracts. General contractor has subcontractors and owns workforce (basically traditional with engineering contractor as middle man/woman)
Design Bid Build
Traditional?
Operate Maintain
A public partner (federal, state, or local government agency or authority) contracts with a private partner to provide and/or maintain a specific service. Under the private operation and maintenance option, the public partner retains ownership and overall management of the public facility or system.
Design Build Operate Maintain
The design-build-operate-maintain (DBOM) model is an integrated partnership that combines the design and construction responsibilities of design-build procurements with operations and maintenance. These project components are procured from the private section in a single contract with financing secured by the public sector. The public agency maintains ownership and retains a significant level of oversight of the operations through terms defined in the contract.
General Contractor
Owner has two individual contracts with designer and GC acting as CM. The GC/CM acts as agent to owner and is in charge of subcontractors
Construction Manager
Owner has 3 independent contracts with designer, construction manager, and independent contractors.
Fixed Price
More risk for contractors and incentive to perform economically
- lump sum
- guaranteed maximum price
