Overview of Potential Management Approaches

Project implementation management approaches will vary depending on the contract vehicle used. As described in Chapter 43, approaches will include traditionally bid plan and specification types, including cost plus, unit price, and lump sum and various turnkey, design-build, and performance-type or out-sourced own and operate arrangements.

Under the plan and specification system, a design engineering firm is selected by the host facility/owner to engineer the project and prepare detailed contract drawings and specifications. These drawings and specifications are then competitively bid on by multiple construction firms and subsequently used by the selected firm as the documentation basis to construct the project. In some cases, procurement of major equipment may be handled directly by the host facility and only installation and commissioning are bid out. In the design-build approach, a individual firm bids project design and the three main construction tasks of procurement, construction, and commissioning as a combined service. In some cases, a design-build firm may initiate the project by performing the original feasibility study as a means of placing (or securing work for) their design-build services. Energy services companies (ESCos) may also offer study and design-build services complimented by project financing, performance warrantees, and ongoing OM&R services.

A key benefit of procuring bundled services, inclusive of design and construction and, in some cases, OM&R, is that it can promote efficiency and continuity of service. The Construction Team, for example, can participate throughout the design phase, providing value engineering and establishing a firm understanding of all finite design detail. They can also begin ordering long-lead time equipment before all final documents are completed, thereby expediting project completion. The need to build what they specify and design, and, in turn, maintain what they design and build, places both the responsibility and the incentive for effective economic implementation more squarely on the single firm.

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