General Contracting
Since the early days of Lueder Construction, we’ve been known for our strength in the hard bid market. Today, we participate in the hard bid public market with projects we feel confident we can do successfully, and to keep apprised of pricing, designs, methods and the competitive landscape. We also participate in a variety of other bid approaches – usually with lump sum or GMP (guaranteed maximum price) contracts – remaining true to our budgets and timelines with the same level of quality and integrity we’ve been known for since our early days.
Here we provide the pros and cons of four popular contracting approaches. Check them out and contact us. Believing the most successful projects are those where we’re involved early in the process, we’re happy to review each of these approaches with you relative to your project.
Competitive Bid
- Lowest price on bid day
- Scope of work, materials, and quality standards are generally well-defined and agreed upon
- Objective contractor selection process
- Most owner decisions made up front, allowing construction to proceed immediately
- “Holes” in the bid documents generate change orders, resulting in higher final project costs
- Greater time in the design phase due to the many decisions that are necessary to generate adequate bid documents
- Preliminary budgets are hard to determine since there is no contractor on board to assist in the process
- Delays could occur due to surprises on bid day. These could result in re-bidding the project, cost cutting, or project cancellation
- Greater participation is required of the owner and architect in the contract administration of the project
- Adversarial relationships can occur between the owner, architect, and contractor as all have different financial goals
Design Build
In this method of contracting, Lueder Construction will contract with and manage the efforts of the architects and engineers, as well as act as the general contractor on the project. By offering this “umbrella” type of contract, Lueder becomes the single source for the complete construction project. Often a GMP (guaranteed maximum price) is defined early in this process to give you confidence that we will meet your project goals.
- Works well with simple projects where the scope of work is easily defined
- Can be a very quick time-frame from design to project completion
- Can result in a very cost effective outcome
- Lack of competition on pricing can result in a higher final project cost
- Lack of fiduciary responsibility of the designer to the owner can result in decisions that are cost driven instead of preserving the owner’s wants or needs
- Traditional checks and balance are not in place
- Complicated projects with difficult to design scopes of work can result in misunderstandings leading to future claims
Design Assist
In this approach, Lueder Construction is selected early in the process, possibly even before the architect is on board. We work alongside the architect and owner assisting them with cost-effective decisions regarding construction-related issues like materials, scheduling and budgets. The architect and Lueder each contract directly with the owner, creating a “three legged stool” of accountability to one another.
- Dramatic time savings are possible as the scheduling and pricing tasks are taking place concurrent with the design phase
- Budgets are reliable and well defined early in the process.
- Long lead items may be pre-selected and/or pre-ordered saving additional time and reducing costs
- Subcontract and material pricing may still be bid, thus creating a competitive pricing scenario for the majority of the project costs
- A partnering relationship is generated where each party is tasked with protecting the needs of each other team member
- Dramatically reduced chance of claims or legal battles
- Initial costs may appear higher
- Care must be taken to ensure a complete understanding of the scope of work
Negotiated
In this approach, private owners negotiate with Lueder after an interview process with others. Project pricing or fee may or may not be a major factor in this selection process. Factors such as safety, shared values, quality, and work history all come together in the owner’s final decision. With this approach, we get to a comfort level with one another based on trust and respect and confidence that we will achieve the intended vision for the project.
- Depending upon the point in time the contractor is brought on board, cost and time saving can be achieved based on their input during the design phase
- A positive relationship is generally fostered between the owner, architect and contractor due to the selection process
- Many of the same benefits in the Design Assist method of contracting are realized with the Negotiated method.
- Care must be taken to ensure a complete understanding of the scope of work
- The interview process can turn into a “theatric” presentation
- The contractor’s pricing structure may not be thoroughly defined during the interview process
- Depending on the parties involved, the interview can become a subjective process
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