RELATIONAL CONTRACTING AND ITS COMBINATION WITH THE BIM METHODOLOGY IN MITIGATING ASYMMETRIC INFORMATION PROBLEMS IN CONSTRUCTION PROJECTS

<jats:p>Project management in the construction sector is a complex and uncertain process and companies tend to look for the lowest value in the procurement of services and materials. However, contractors do not share the necessary information with the contracted parties and thus give rise to the asymmetric information (AI) phenomenon. The aim of this study is to perform an analysis of the determining factors in the adoption of relational contracting (RC) in combination with Building Information Modelling (BIM) to reduce AI. The results of a questionnaire survey, which was e-mailed to 14 specialists with solid experience (over twenty years) and knowledge in construction projects, revealed that the probability of the AI phenomenon occurring in Portugal is very high, and its impact on construction projects is equally high. The results also show that RC in combination with the BIM methodology contributes very positively to the mitigation of AI problems in construction projects in Portugal. Approximately 85% of respondents consider that the government should seek to reduce AI in the public works sector through the use of RC and its combination with the BIM methodology in the Portuguese Public Contracts Code.</jats:p>

section_content: AIA and the Associated General Contractors of America (AGC) formed a task force to produce a primer that defines popular methods of integrated project delivery, design delivery, including design-bid-build, construction management at risk, and design-build. 

The task force hopes this primer will help architects and contractors achieve quality projects that fulfill owner expectations and are delivered on time, on budget and projects that deliver greater value. AIA and AGC recognize that many viable project delivery method s are available, so this list is not meant to endorse any one as "best. "
section_name: SUMMARY

section_name: ADMINISTRATIVE CONSIDERATIONS

section_content: Construction management at risk (CM@R) is a project delivery method, whereas construction managementadviser is a form of project management. While this difference in leadership may appear subtle, it is important to the understanding of the different delivery methods. Leadership defines the authority to legally bind the owner. Assignment of contractual responsibility is key to differentiating project delivery methods. Outsourcing responsibility and administration is another option that owners should consider in any project.
section_name: Delivery vs. Management

section_content: The four project delivery methods this primer defines are design-bid-build, CM@R, IPD, and design-build. These are the three most commonly used and referenced project delivery methods. How the owner selects the primary service providers significantly affects the project delivery method and the resulting contractual relationship. The selection is usually based on price, qualifications, or a combination of the two. When qualifications and price serve as the basis for selection, it is common to use a request for qualifications (RFQ), a request for proposals (RFP), and interviews to review bidders. Each of these methods of gathering information reveals important aspects of the bidders' qualifications. Typically, more than one provider is contacted to supply information to encourage responsible bids. 

The following are commonly used approaches for selecting an architecture and construction team:

• Direct Negotiation: The owner's final selection is based solely on lowest total cost. 

• Competitive bid: The owner's final selection is based on some weighting of the total cost and other criteria such as qualifications. 

• Qualifications-based selection: Total construction cost is not a factor in the owner's final selection. Instead, the final selection is based on either a "pure qualifications-based selection" (qualifications only, no element of price) or a combination of qualifications and fees.
section_name: Selection Procedures

section_name: DELIVERY METHOD DEFINITIONS

section_content: This method involves three roles in the project delivery process-owner, architect, and builder-in traditionally separate contracts. "Traditional" frequently describes the design-bid-build method, which typically involves competitively bid, lump-sum construction contracts based on complete and prescriptive contract documents prepared by the architect. These documents generally include drawings, specifications, and supporting information. The phases of work are usually conducted in linear sequence. 

The owner contracts with an architect for design; uses the design documents produced by the architect to secure competitive bids from contractors; and, based on an accepted bid, contracts with a contractor for construction of the building. 

For most of the 20th century, public work has been routinely built using the design-bid-build/lump-sum (or stipulated sum) delivery method. Much private work has also been performed for a lump-sum figure, in the belief that the marketplace ensures economic discipline and yields the lowest cost. In particular, private organizations with large constituencies, such as churches and schools, are often required to use project delivery methods with sealed bids and formal procedures, similar to procedures for public projects. 

Design-bid-build is identified by the following defining characteristics:

• Three prime players: owner, architect, builder

• Two separate contracts: owner-architect, owner-builder

• Final contractor selection based on lowest responsible bid or total contract price Typical characteristics of the design-bid-build approach include the following:

• Three linear phases: design, bid, build In CM@R, the construction entity, after providing preconstruction services during the design phase, takes on the financial obligation for construction under a specified cost agreement. The construction manager frequently provides a guaranteed maximum price (GMP). CM@R is sometimes referred to as CM/GC because the construction manager becomes a general contractor (GC) through the at-risk agreement. 

The term "at risk" is often a source of confusion. Sometimes it refers to the fact that the contractor holds the trade contracts and takes the performance risk for construction. In other contexts, the term is tied to the existence of a cost guarantee or GMP. Because the term "at risk" has two distinct meanings, it is important to understand how it is being used in a particular situation. The definition used for CM@R in this document is based primarily on the fact that the construction manager holds the trade contracts and takes the performance risk. The eventual establishment of a GMP is typical of CM@R project delivery, but it is not a defining characteristic of the delivery method in this case. 

When a GMP is used, the CM@R method is flexible as to when the construction price becomes fixed. As a result, the timing for agreeing to a GMP varies by project. Considerations of risk should include an evaluation of the amount of design information available, the amount of contingency included and the owner's willingness to share in the risk of cost overruns. It should be noted that there is no contractual relationship between the architect and the CM@R. 

CM@R is identified by the following defining characteristics:

• Three prime players: owner, architect, CM@R • Two separate contracts: owner-architect, owner-CM@R

• Final provider selection based on aspects other than total cost Typical characteristics of the CM@R approach include the following:

• Overlapping phases: design and build (fast track)

• Construction manager hired during the design phase

• Preconstruction services offered by the constructor

• Specific contractual arrangement determines the roles of players

• Clear quality standards produced by the contract's prescriptive specifications
section_name: Design-Bid-Build

section_content: Owners interested in single-point responsibility for both design and construction can use the design-build delivery system. In the design-build approach, the owner contracts with a single entity, the architect-builder, for both design and construction services. The design-build entity can be led by either an architect or a general contractor and can consist of any number of people. As with CM@R, the timing of agreement on a GMP varies with each project. 

Design-build approaches require an explicit determination of the roles and responsibilities of the design-build team. Single-source contracting has gained popularity in recent years in both the private and public sectors. The primary reason for this interest in design-build as a viable project delivery option is the owner's desire for a single source of responsibility for design and construction. 

See also the 14th edition of the Handbook, which can be ordered from AIA Store by calling (800) 242 3837 (option 4) or by email at bookstore@aia. org. 

See also "Project Delivery Methods" beginning on page 508 of the 15th Edition of the Architect's Handbook of Professional Practice. The Handbook can be ordered from AIA Store online at aia. org/store, by calling (800) 242 3837 (option 4), or by email at bookstore@aia. org. 

Revised September 2016
section_name: Design-Build

section_content: For more information on this topic

For more information on Public-Private Partnerships, please visit the Department of Transportation's Home Page on P3 at http://www. fhwa. dot. gov/ipd/p3/
section_name: RESOURCES