Reason 8

12 Reasons to Hire an Owner’s Representative

Helping you select the right project delivery method that is best for your project.

By now, you realize the complexity of a construction project. It is important that you have an industry expert on your team whose personal stake in your project are your own goals and objectives. By understanding the entire project from planning to execution the Owners Representative, (OR) serves a broader role as the conduit between designers, constructors, and your organization to help you successfully manage your project.

For an owner, the complexity of the project increases once the contractor is part of the team. Deciding which contracting method can be a challenge. Each method has its benefits. This article is a glimpse into distinct options.

Design-Bid-Build (DBB)

Also called hard bid, is the most common delivery method. Like the Design Professional (DP) process, most owners mistakenly believe this always results in the lowest price.

  • Process

    • The DP collaborates with the owner to develop the bid documents.

    • When the DP completes the design, the owner sends the documents to the contractors to bid.

    • The bidding process can take two to four weeks to complete.

    • Review and contractor selection then rolls into construction.

  • Disadvantages:

    • The owner pays upfront design cost.

    • An actual construction cost is not known until after bids.

    • Depending on the quality of the drawings, the owner’s risk may be higher from contractor change orders.

    • The overall project schedule can be longer.

    • The contractor does not have the opportunity to supply constructability or cost saving ideas during the design phase.

Design - Build (DB)

 This process has gained in popularity. DB creates a simplified contractual arrangement for owners.

  • Process

    • The owner contracts both the design and construction phases under one company.

    • The architect or contractor can be the project lead from beginning to end.

    • The project can be more efficient with the combined design and construction team.

    • The contractor(s) provide expertise to enhance the design.

    • Shortens overall schedule.

  • Disadvantages:

    • There may be a conflict of interest between the design team and the contractor, especially if the owner is pushing for lower cost and high-quality finishes.

    • You lose competition amongst subcontractors when selected during the design phase.

    • There are insurance liability issues that need addressed with combination of construction with errors and omissions insurance.

Owners Representative (OR) & Construction Manager as Agent (CMa)

  • Process

    • OR and CMa provide representation to the owner during both the design and construction phases.

    • Exclusively serves the interest of the owner.

    • Provides overall coordination by acting as the liaison to the owner.

    • Helps the owner to make critical decisions about the project.

    • Oversees the project’s timeline and budget, but not responsible for overages because they are not the builder.

  • Benefits

    • Provides input on value engineering during design.

    • Performs constructability and budget reviews.

    • Supplies a builder’s perspective during design.

    • Minimizes avoidable issues that occur during construction.

  • Process:

    • Helps the owner to make critical decisions about the project.

    • When the project moves from design to construction the CMr becomes the builder.

    • CMr operates as a general contractor, holding a single contract with the owner and all the subcontracts with subcontractors.

  • Benefits:

    • Provides input on value engineering during design.

    • Performs constructability and budget reviews.

    • Supplies a builder’s perspective during design.

    • Minimizes avoidable issues that occur during construction.

    • Responsible for the schedule and monetary risks for constructing the project.

    • Provides a guaranteed maximum price during design.

Construction Manager at Risk (CMr) 

The main difference in a CMa/OR and a CMr happens after design.

Public-Private Projects

This method is also known as P3 projects have the benefits of a partnership with public and private entities. Typically, these projects are:

  • Used for affordable housing and infrastructure.

  • Controlled by the ability of a private company which is usually more efficiency.

  • Public owner is financially stability and can absorb slight increases.

  • A benefit to the public when complete.

Integrated project delivery (IPD)

This has been around for about 15 years, so it is a relatively new contracting method.

  • Process:

    • All project team members are bound by one contract.

    • The owner selects the entire project team before design begins.

    • All team members have a role from design to construction completion.

    • Fosters innovative and collaboration.

  • When to use it

    • Repetitive, complex, and large projects.

    • Healthcare, higher education, manufacturing, and infrastructure projects.

  • Advantages

    • Increased transparency.

    • Shares and promotes accountability.

    • Can save time on large projects.

  • Disadvantages:

    • Requires an intense time investment from team members, particularly in the preliminary stages of the project.

    • Everyone shares all the risk on the project.

    • Not suited for projects under $5 million.

    • Requires teams to give (and take) to improve the overall project.

    • Creates additional administrative cost.

    • Few DP and contractors know how to use this method.

    • Private financing is harder to obtain.

Each project is unique. Contracting methods and fees can vary based on project specifics.

An Owner’s Rep provides independent advice so that owners can make informed decisions.