Scherer Construction believes and promotes the design/build method as the best choice in contract delivery method as it often produces lower cost, faster project completion, and higher quality than conventional methods. Utilizing design/build, the contractor is responsible for both the design and construction stages of the project and all risk and responsibility is transferred to them. This method is considered “turn-key” as the owner is utilizing a single source for all design, engineering, and construction of the project. Scherer Construction utilizes their own on-staff architects or partners with outside architects and engineers to design the project. To minimize project risk, control project cost, and reduce the delivery schedule the general contractor, design team, and the owner work together as one team in the early phases of the design process. This allows for greater value engineering, exact cost establishment, and an owner focused goal.
The construction management method is when the contractor represents the owner. The contractor is hired to manage the construction process from planning to completion. Problem solving, schedule management and cost control is part of the construction manager’s scope. The general contractor works with the owners selected architects and engineers and assists in the bidding process of subcontractors and suppliers. Generally a lump sum “general conditions” amount is determined to cover the direct costs incurred by the contractor for that job. Common general conditions costs include: superintendent, project manager, surveying, testing, temporary utilities, temporary offices, storage trailer, permitting fee, etc. On top of these costs, a fee is negotiated which covers the contractor’s overhead and profit. This fee is applied in addition to the cost of the work and is typically referred to as a “cost plus” amount.
This construction management method encourages open collaboration between the owner and contractor as they now share the same goals. After scopes of work for subcontracted trades have been detailed and written, the construction manager bids out the packages. These bids are then received and opened together with the owner. As an owner, you can see all costs and choices available in an open book format. A guaranteed maximum price or GMP can also be established to give a ceiling against price escalation while still allowing for room for cost reduction and value engineering.
Scherer Construction can be hired directly as a general contractor in a conventional method. Using this contract delivery structure, the owner or their representative remains the key responsibility holder. The general contractor’s responsibility is to manage the subcontractors, keep the schedule, and stay within the budget. When the owner has already chosen an architect and the construction plans have been finalized, it is time to partner with a general contractor. This can be achieved through negotiation or competitive bid. Utilizing negotiation allows the owner to select a contractor based on experience, relationship, and trust. This method is typically “closed book”, in that the owner does not see the actual cost to the general contractor.
Because of the advantages of both the design/build and construction management delivery styles, the two methods are often combined using a hybrid method. This allows for both the design/build “turn-key” delivery, where all responsibility and a majority of the risk are transferred to the contractor, and also a transparent cost structure of construction management. Combining these methods shortens the project delivery time and encourages cost control.