Project Delivery Method

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    Iuliia Fomina

    Hello, 

    I had not used the Amber Book for this exam. I will try to break down this question.

    Delivery method is the way the project will be executed: design-bid-build, design-build (with option for bridging), IPD among others. Cost+Fee is a method of compensation: like Lump Sum with/without GMP, percentage of construction etc. Why Amber book calls Cost+Fee a delivery method I do not know, please feel free to clarify it. For now, let's imagine they phrased it by using the word Compensation instead of Project Delivery.

    Delivery method most appropriate for a speculative retail development on a brownfield site as with as-yet unknown tenants

    This question is answered form the Architect’s standpoint. Cost plus fee means I will charge client direct personnel expenses plus a fee for profit with no guaranteed maximum price. Fixed fee may sound like a cap, but it is not, it is just some set number that you will add for the profit.

    You are right pointing out that it is not the best way for the Owner, because the Owner does not know the guaranteed fee for the architect. But it is not Architect’s fault there are so many unknowns.  

    Speculative, brownfield and unknown tenants are the guides in this question.

    1)Speculative may mean that it is a first-time developer with little knowledge or yet unarranged financing. Imagine a client who changes plans 3 times a day without getting anywhere. Architect may burn through allocated hours, earn 0$ (or even lose money) and have nothing finished by deadline because there were way too many changes. Charging cost plus fee secures the payment for the Architect’s effort

    2) Brownfield brings a potential for some unknown contamination which may need remediation. It may be so toxic that it would be impossible to build on some potion of the site, which eventually will lead to a design change done by Architect. In a nutshell, more unknown volume of work.

    3) Unknown tenants. Every office is different: lawyers, dentists, tailors or engineers etc. The Owner may need the Architect to provide plans for tenants, and even overlook work of other consultants hired by the Owner like for B253-2007 Standard Form of Architect’s Services: Furniture, Furnishings and Equipment Design. Even more unknown work, and cost + fee will protect the Architect from not being paid for it.

    For Change Orders, Architect usually prepares them, Contractor, Architect or Owner provides the feedback. They have to be signed by the Owner, Architect and Contractor which represents that all three parties agree to this change. Construction Change Direction is a change signed by the Owner and Architect in cases the Contractor is not in agreement. Construction Change Directive will eventually become a Change Order (happy end) or give rise to a claim.  For situations you described, Contractor cannot change any financial, schedule or scope totals. It is only done through Change Order or Construction Change Directions depending whether parties agree or not. 

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