Introduction

A multinational construction company located at the south Wales is delivering high quality of civil
engineering services to its clients and other consultancy companies. The construction company is
constructing various buildings, shopping malls, bridge, road in different places of Australia and
other location as well. Furthermore, they are also working for structure repairing buildings. The
organization has more than 200 employees’ related different fields of engineering. Structural
engineering, Building repairments, small contractors are the main work performed by this
construction company. The main factor crucial to this road construction project is the time
management, raw materials, budgeting, project requirements, project flexibility,uncertainity.

In this report, various project delivery method,contract types, procurement method ,risk
management is discussed for the construction of buildings and bridges in different rural area of
Australia.

Background

The business portfolio of this construction company has expanded manifold from the last 1o years
including long term projects. Along with increasing capability, services, equipment
features .available manpower and human resources, the company is registered as ‘A’ class
construction company in the ‘Australia’. The main goal of this construction company is to provide
high quality and construction services in the field of civil engineering.

In the present situation the organization is taking a project of building buildings and bridges in the
rural area of Australia. The roads will be constructed in the hilly areas where the condition of
building is poor now. The organization is planning to complete this project in various ways. They
are planning, analyzing the risk and are trying to select suitable contract method for running their
project. The organization hired many civil engineers, structural and construction management
engineer, architect for the construction purposes, location of the running project.

Evaluation of project delivery method

Project delivery method is a system used by an agency or owner for organizing and financing
design. There are different kinds of project delivery method. Such as design bid build, budgeting
project, scheduling of the project, controlling the owner, construction management at risk, design
bid build, Multi prime, relationship owners.

Among all these delivery method, the most common delivery methods are: Construction
management at risk, Design bid build, design build.

 Design-Bid-build
Design Bid-Build is one of the popular project delivery methods. The traditional type of
design bid build project is now replaced by new methods but, it is still running as well
established project delivery method. Here, the owner contracts separately with the
design firm which produces the construction document. After this step, the builder will
 build the physical buildings. In this method, the process runs sequentially one by one:
document of construction, bidding and then construction work.

In case of design bid build, a design firm is selected in order to 100 percentage complete
design documents. The owner of the project sets the price of the project after agreeing on
the documents. It is not necessary for contractors and designers to work together at the
same time. All the associated risk regarding project completeness is taken by the owner. A
good project manager is necessary to handle all the risk and check the documents
thoroughly. This kind of project deliverable is beneficial in case where the owner do not
have expertise in real construction of projects. In some small project of construction of
buildings , this delivery method is beneficial. Since each phase of the project is distinct
and is suitable incase of lowest total construction price.

However, it has some risks which might even cause the owners to switch from one project
to another. The major risk in involved are: the owner can use huge project fund in the
design phase even before getting the price of firm on the actual construction phase. The
owner is potentially critical for changing orders, additional cost and delays initiated by the
contractor. As one process doesn’t begin until the previous phase is not completed, here
the construction process does not start until the design plans are finalized. Project
feedback will not be given during the time of design as the general contractor is not on
board normally.

 Design-Build

It is another type of project delivery method, in which the entire team such as a
contractor, designers, subcontractors, and owners work together as a single group. In
order to solve problem, the team member focus on communication, collaboration of the
project.
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The first phases of the design build process are: Selection of team, Pre construction,
design of architecture, construction and post construction. Here the team is selected from
different potential candidates. In the second phase, architects, engineers, contractors
work together. After selecting team, pre construction plays important role where the
construction begin. Here the design build team helps to maximize the efficiency
throughout the project. The design build will assess areas for the optimization of the
products and saving of costs. Additionally, project scheduling is set, during this phase,
initial building design are presented. The fourth step is construction. Here, the roads can
be constructed by using this method. Post construction helps in designing project
effectively.
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https://www.acebuildingservice.com/what-is-design-build-construction
 The design build has main advantage which is described below. The design build team
helps to implement team work effectively. All the team members works together for
solving the problem encountered. Design build process focus more on the results not on
excuses. A design build firm is involved in the project from initial stage to final stage.
Design build process helps in ensuring the quality result by providing high customer
satisfaction. The design builder acts as the guide for constructing roads and buildings. In
this project, this method is effective as it involves the entire team for the project
development. Design builder acts as the trusted behaviors throughout the process of
construction. The design build acts as the professional guide in this project effectively and
involvement of owners. Such an involvement helps in development of products earlier.
The team and collaboration work helps in development of project. It helps in saving time
and cost.

In

 Construction management at risk

Construction management at risk is a project delivery method where the construction manager
makes a commitment for delivering a project. It helps in providing professional services to the
clients during construction and design process. In this project delivery method, actual
construction of the project is provided on the basis of available bidders. In this method, an
individual can hold the position of manager. At various stage of project construction management
is also responsible for handling project budget, cash flow analysis, schedule of construction,
project costs. During this process project owner rely most on CMAR as a result, the work load on
the owner is reduced. A CMAR work for establishing a guaranteed maximum price based on the
project bids. In this method, the owner is highly benefited.

This construction management has following advantages.

It helps in controlling the cost from the initial level of the project. Best cost estimation process will
be established during the construction of roads in this project. The burden of the owner is
reduced and the project is coordinated and managed by the organization. The risk of the owner is
limited by this kind of project delivery process . The management focus of the project is given
much value and the product is managed with the best interest of owners.

project delivery method Recommendation

Among all these project delivery method, Design build project delivery method is suitable for this
case. The case is more focused on the construction of buildings and bridges in the rural area of
Australia. This method is selected because it delivers the worldwide high quality commercial
construction project for different places. Furthermore, Early materials, cost, design is selected as
an input from the contractor. This project delivery helps in reducing the changing order of the
buildings in this case. They deliver high quality of the project at the designed time. The contractor
fees are reduced in this method. Here the legal fees will be minimum as well as the owner can
occupy the facility earlier by using this method. So, this design build method is recommended to
use in this project instead of using other method.

Best Contract type

A project contract refers to an agreement between two or more parties for completing a certain
goal in a certain way. Among different contract methods, following contract types will be
evaluated in this report. They are Lump sum, cost plus fixed fee contract, guaranteed maximum
price.

Lump Sum:

It is the traditional means of procuring construction as well as the common type of construction
contract. Here, a single lump sum price is agreed for all the works before the works begin. In this
method, the project is well defined .In this type of contract, the contractors can accurately price
the works they are being asked for carrying out the project. In this project of constructing
buildings and structures, lump sum can be helpful which will be evaluated based on its advantages
and disadvantage.

In the lump sum contract, the risk in the client side is very risk and it has fewer variations.
According to the payment plan, capital necessary for the project can be arranged by the capital.
The cash flow of the contractor’s is almost predictable. Furthermore, tendering process is more
impartial and transparent.

Cost plus fixed fee contract

It is the contract type where the contractors are paid incase of normal expenses in the project.
In this method, profit is collected to profit on the project and helps in encouraging the economic
production. If this contract is implemented in this project , it will have following benefits and
drawbacks.

If this contract is applied for the construction of buildings and bridges in different location then
it might have the lower final cost than normal contract .For controlling this construction project
in Australia, the contractor has less incentive to project cost control. Higher quality of outputs
such as construction of good buildings with the limited time can be constructed by using this
type of contract method. Some disadvantage of this contract type is the overall cost of the
project is not so clear at the beginning. Additional administration of the project may be
required for ensuring the project contractor. It might be less incentive for completing the
project efficiently compared to fixed price contracts.

Guaranteed maximum price.

It is the cost type contract where the contractors are compensated for actual cost of the
project.This type of contract sets a limit where the customer will have to pay their contractor
without the actual cost.these types of contract can be attractive to the customers of the given
organization because the risk level is shifted to the party performing risk.

In this type of contract, the customer want to apply each line item which helps in making
accounting easier and the save the online item. The main benefits of using this contract the
given construction project will help in obtaining the financing on the project easier. The main
critical factor to this construction project is uncertainty. It helps in accelerating the project
schedule itself. The project might completed in low cost , efficient work.It might have inaccurate
cost reporting as the project is larger as it is related to construction of buildings and bridges in
remote area of Australia.Furthermore, contractor risk is increased through this project.

Procurement method

Risk management plan

It refers to the process of eliminating the risk encounterd in any project. In this project of
construction of buildings and bridges in Australia. Vraious risk may be encountered regarding
projecr budget, customer requirements, time constraints and other factors. Therfore, it is
necessary to plan sincerely every steps of the project for reducing the probable risk.In this
phase, the probable risk will be identified and mitigating steps will be discovered for running
project successfully.

 Risk Register

It is an essential document in successful risk management plan.Here the impacts of risk

are plotted over the occurrence probability of the risk.
 Risk Quadrant Analysis

 Risk Mitigation plan

Here , the proper planning is done for reducing the probable risk of the project.