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Definition
| when an owner structures their own project teams, lead by a third party project manager. |
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| SF Cost Estimates; based on occupancy, size & type of construction |
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| Used by firms to determine the amount of time spent on billable work as a percentage of total time the employee is compensated. UR = billable hours / total hours |
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| process to get the best value for the project using similar, but more affordable materials and techniques |
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Definition
| financial analysis of a building project which involves cost/return on investment |
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| Cost of money or debt service |
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Definition
| principal and interest payments |
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Definition
| federal tax benefit with the idea that a building loses value as it ages |
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Definition
| used to finance non revenue collecting facilities |
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Definition
| Used to finance revenue collecting projects (tolls, etc) |
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Term
| Fees - Multiple of Direct Salary Expense (DSE) |
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Definition
everyone’s direct salary/wages multiplied by a factor to cover fringe benefits (e.g. Employee health insurance),
overhead, and profit |
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| Fees - Multiple of Direct Personnel Expense (DPE): |
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Definition
| fringe benefits are included in direct salary/wages...that expense is multiplied by a factor to cover overhead and profit |
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| Fees - Professional Fee plus Expenses |
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Definition
| professional services are separated from the services from identified costs (reimbursables, consultants, etc) |
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Term
| Fees - Hourly Billing Rate |
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Definition
| project is billed at standard rates for every hour worked. Often this is to a “not to exceed” value without consent of the owner. |
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| Fees - Stipulated/Lump Sum |
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Definition
| a specific amount is agreed upon for the total payment |
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Term
| Fees - Percentage of the cost of work |
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Definition
| based on a percentage of construction cost |
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Term
| Fees - Unit price contract |
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Definition
| based on acceptance and incorporation of unit price quotes for the various portions of the project |
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Term
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Definition
Architecture = 10% of construction cost
Mechanical = 15%
Electrical = 12.5%
Civil = 10.5%
Structural = 9.4% |
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Term
| Traditional contractor fees: |
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Definition
General Overhead = 8-10% value of firm value
Project Overhead = 4-10% of construction cost
Profit = 15-20% small jobs, 10-15% large jobs, 5 - 10% very large jobs |
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Term
| Traditional construction fees: |
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Definition
Construction Cost = Amount of $$ to build
Construction Budget = 85% construction cost
Contractor’s OH/Profit = 15 - 40% construction cost
Surveys, testing, fees, FF&E = 15% |
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Term
| Traditional project budget |
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Definition
Site Acquisition = not included in project budget
Utility/Off Site Construction = not included in project budget
On Site construction = 10-20% of construction cost
Building construction = 10-15% of construction cost
Contingencies = 5-10% of construction cost
Professional Services = varies
Inspection and Testing = varies
Financing = varies |
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Term
| Design – Bid – Build Construction Delivery Method |
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Definition
• Most common of delivery methods… public work traditionally uses this method
• Consists of three parties: owner, architect ,and contractor
• Two separate contracts: owner + architect and owner + builder
• Established process with legal and procedural guidelines
• Typically involves competitively bid, lump sum construction contracts based on complete and prescriptive contract documents
• Work is conducted in a linear sequence
• Final contractor selection based on lowest responsible bid or total contract price |
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Term
| Design – Build Construction Delivery Method: |
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Definition
• Two parties: owner and designer‐builder
• Consolidated entity provides design and construction services to the owner
• Offers the owner a single source of responsibility
• Provides continuous execution of design and construction
• Phases overlap – design and build (fast track)
• There is only one contract: between owner + design‐build organization
• Design‐build entity can be lead by either architect or general contractor (though typically it’s led by the contractor) |
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Term
| Construction Management Construction Delivery Method |
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Definition
• Three parties: owner, designer, construction manager
• Two contracts issued: owner + architect and owner + construction manager
• Construction manager typically provides pre-construction services during the design phase then takes on the financial obligation for construction under a specified cost agreement
• Frequently based on a guaranteed maximum price
• Construction manager contracts with subcontractors
• No contractual relationship between the designer and construction manager
• Phases will often overlap, allowing for fast track project |
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Term
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Definition
| not legally binding. Use of a mediator to reach agreement between each party |
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Definition
| legal technique for the resolution of disputes outside the courts. It’s a form of binding dispute resolution, equivalent to litigation in the courts. |
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| conflicts/disputes that are resolved in a court of law. Typically a last option. |
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Definition
| legal technique where an insure takes over for a party for whom it has made a payment. (e.g. damage to a property under construction caused by a subcontractor is covered by insurance who then sues subcontractor in the owner’s name) |
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| Insurance - Professional Liability |
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Definition
| Held by architects/design professionals. Liability due to negligence or not meeting the standard of care expected of them. (eg: not designing ADA compliant restrooms in a public building) |
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Definition
| Held by almost everyone. Liability to employees for injury or sickness as a result of their employment. |
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Term
| Insurance - Property/Builders Risk |
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Definition
| Held by owner. Covers any damages, loss of work on site/off site/in transit. |
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Term
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Definition
| Held by owner. Covers any financial loss due to delay in construction because of damage, accidents, fire, other hazards needed to be dealt with. |
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| Insurance - Product & Completed Operations |
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Definition
| held by contractor. Liability for damages caused by installed goods after the construction phase and transfer of title. |
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Term
| Insurance - Contractual/Indemnification |
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Definition
| Liability assumed by contract where contractors agree to hold owners/architects harmless for damages that are the result of specific events. |
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