question about cost plus fixed fee in AHPP book
Per chapter 9 of AHPP, the delivery method is about owner, architect and contractor's organization, strategy and responsibilities. Does anyone happen to know why "cost plus fee" is a type of delivery method but it does not look like a regular delivery method since cost plus fee is not about OAC relationships and it is just a way to calculation construction cost? Is that cost plus fee just one type of special delivery method?
Also, per the following chart, "cost plus fee" is used under traditional delivery method. Can cost plus fee be used with CMC or bridging delivery method together?
Thanks,
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Interesting comment. I don't have a clear answer, but can perhaps provide some commentary. As I understand it, cost plus fixed fee is just one "option" that could be utilized under the traditional delivery method. Three reasons for using this would be either 1) schedule is tight, and the project construction needs to be kicked off prior to design completion, 2) quality is of utmost importance and cost doesn't matter, or 3) full scope and extents not fully known. That said, I think the amount of risk an owner is willing to take on is also a consideration here, as well as the fact that a cost plus fee may allow room to negotiate the fee upfront to be paid the contractor once work is done.
Cost plus fixed fee used in a CMc method would basically nullify any risk the contractor would otherwise take on, because a GMP would no longer be binding the CMc.
Take a look at p.516, fig. 9.3 in the AHPP. This may help clarify things a bit as well.
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Thank you Michael for telling me your thought. I feel it makes sense now. I understand now "cost plus fixed fee" is just a special case under DBB.
How can I understand when you say "a GMP would no longer be binding the CMC"? I know the most common with CMC is cost plus fee without GMP. Are you saying cost plus fee with GMP is not that common with CMC?
Thanks,
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