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Chapter 15

best, and probably only, manner to insure effective purchasing and contracting is to select a contractor with a good and lean organization and procedures. If the selected contractor does not have a good purchasing department, about the only thing the Project Manager can do is to get help to reinforce supervision, and support the contractor organization if required. This is not the ideal way to run a job but may be the only way to minimize costs and protect the Owner's interest.

15.5 Control During Construction
The most effective way to minimize construction cost to: is

HARD MONEY EXECUTE CONSTRUCTION A ON COMPETITIVE BASIS, EITHER THROUGH LUMP SUM UNIT PRICES CONTRACTS OR A COMBINATION OF THE TWO.
Some contractors, especially large ones, will argue that this approach is not compatible with fast track schedules. This is far from the truth; a flexible engineeringcontractorcommittedtothecompetitivelumpsumapproachwill always find ways to create competitive situations without hindering the schedule, especially if the Owner's Project Manager is adamant on the subject. Break down the work into discrete portions and plan accordingly. engineering

Go through a bidding round when engineering is only about 60% done, continue engineering during the bid preparation and go through a second bidding round, with the two low bidders, when engineering is more complete and maybe a final negotiation with the low bidder and up-to-theminute engineering. Have good definition of the "undefined" as well as the defined work. Ask for competitive unit prices based on preliminary take-offs and convert to lump sum based on actual quantities. Pre-order 80% of bulk materials normally supplied order to minimize mobilization time. by the contractors in

When construction is awarded on a lump sum basis, most of the risks as wellas the costcontrolfunctionisassumed by thesubcontractors.TheOwner'smaincost control responsibility is limited to controlling extras and monitoring quality and progress. On small projects, the Owner's Project Manager could act as Construction Manager and be directly involved in the cost control activities. The Owner could also delegate construction management to either the engineering contractor or to a Construction Management (C.M.) firm. Although

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