Term
| Describe how the Owner, A/E, and contractor are in a tripartite relationship. |
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Definition
| This relationship is created by obligations to third parties to the contract. For example, the owner- A/E agreement may require certain duties of the A/E acting on behalf of the owner. The contractor has the right to rely on the proper performance of these duties. The A/E, similarly, relies on the contractor to perform certain duties identified in the owner-contractor agreement, even though the A/E is not a party to that contract. The A/E relationship to the contractor in the owner-contractor agreement is a third-party relationship. These third-party relationships create the third side of the triangle in the construction process. (PDPG 5.2) |
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Term
| How can a project be Fast-Tracked? |
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Definition
| Process of overlapping activities to permit portions of construction to start prior to completion of the overall design. (PDPG 7.1.5.3) |
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Term
| What are the options for Basis of Payment? |
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Definition
Stipulated (lump) sum
Unit price
Cost–plus fee
Cost-plus fee with a guaranteed maximum price (PDPG 7.1.6) |
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Term
| What is a Stipulated Sum? |
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Definition
| An agreed amount for a defined extent of work based upon complete or partially complete construction documents. This is the simplest method of stating the basis of payment wherein a single amount is agreed upon for completion of entire contract. (PDPG 7.1.6.1) |
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Term
| When would a Unit Price Payment Basis be used? |
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Definition
| Unit prices are used in cases where the exact extent or quantity of work cannot be calculated accurately or otherwise determined in advance of actually performing the work. Commonly used for civil engineering projects where the types of work, such as unstable soil or rock excavation, can be identified during the design of the project but the actual quantities of such work items can be only be estimated. (PDPG 7.1.6.2) |
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Term
| What type of contract is a Cost-Plus Fee usually used with? |
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Definition
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Term
| What does a cost-plus fee include? |
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Definition
| The contract calls for compensation for the actual cost of direct expenses, plus an additional fee for overhead and profit. The fee is usually a percentage of the direct expenses, but also may be a fixed-fee amount. (PDPG 7.1.6.3) |
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Term
| What is a GMP and why is it used? |
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Definition
| Added to the cost-plus fee, a guaranteed maximum price may be negotiated when project design is in the early design stage such as design development and may be only sufficiently complete to allow for adequate project definition. A contingency amount in the project budget should be included to allow for the inevitable changes and a resulting increase to the guaranteed maximum price. (PDPG 7.1.6.3) |
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Term
| What are penalty and bonus clauses used for? |
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Definition
| A clause providing a penalty of a daily amount for not completing the work in the allocated time or by the agreed-upon date can be included in the contract. However if there is penalty clause in the contract, it should be accompanied by language that pays the contractor a bonus/incentive amount for early completion. Usually, the per-day amount for penalty and bonus/incentive are the same amount. (PDPG 7.1.6.4) |
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Term
| What type of payment basis is Shared Savings used with and why? |
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Definition
| Used with GMP. payment is made based on an agreed-upon portion of the difference between the original cost (stated or agreed) and the actual amount of proposed changes or substitutions. The savings are shared on a percentage basis between the parties to the agreement. (PDPG 7.1.6.5) |
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Term
| Why are liquidated damages used and what is required to enforce them? |
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Definition
| Usually, a fixed monetary amount per day, deducted from monies due the contractor for failure to substantially complete the work within the stipulated time or by a stated calendar date. Some sort of documentation is desirable to substantiate the potential loss from delay of completion. If the amount for liquidated damages is not based upon financial loss and is an excessive arbitrary amount, disproportionate to the value of the performance, it might be considered a penalty and become unenforceable. (PDPG 7.1.6.6) |
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Term
| What are the two Contract Types? |
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Definition
| Single-Prime and Multiple-Prime. |
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Term
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Definition
Design-Bid-Build. t is a linear sequence of activities generally occurring in the following order:
Project conception
Design (including schematic and design development)
Construction documents
Competitive bidding
Construction
The basis of this delivery method is that design is completed prior to bidding/pricing and construction. (PDPG 7.2) |
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Term
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Definition
| Design-Negotiate-Build (D-N-B). A delivery method, if only one contractor is involved in developing the costs and negotiating a contract to construct a project. Although the design- negotiate-build is similar to design-bid-build, it is a more informal process and may not include specific procurement requirements or specific rules of engagement. (PDPG 7.3) |
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Term
| What are the two types of Construction Management? |
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Definition
| (Construction Manager as Agent (CMa) or Construction Manager as Contractor(CMc)). |
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Term
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Definition
| Construction manager as contractor is effectively the contractor and provides contractor project management services, guarantees the cost of construction, and signs subcontracts for most of all of the construction work. |
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Term
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Definition
| Construction manager as agent usually divides the project into multiple contracts for procurement and award of contracts. Construction manager as agent provides management services to the owner and usually includes consolidating applications for payment and coordination among contracts. A construction manager may also provide construction expertise, cost estimating experience, and scheduling services to the A/E during the design stage of a project. (PDPG 7.4) |
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Term
| Describe the Owner-Build process. |
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Definition
| A project delivery method, the owner is involved in aspects of contracting for every portion of a construction project. Because the owner can act similar to a contractor, the construction contracts are between the owner and the specialty contractors (subcontractors). (PDPG 7.6) |
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Term
| What is an RFQ and why is it used? |
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Definition
| Request for Qualifications. The information received in response to the request for qualifications, helps the owner discern the qualifications of those who may be considered for a project. This may help to narrow the field as the request for proposal is sent only to those who have been approved or prequalified. (PDPG 2.6.2.2) |
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Term
| How is a proposal different from a bid? |
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Definition
| A proposal implies an opportunity for more consideration by the recipient and is sometimes utilized when project cost or other conditions will be determined by negotiation. A proposal is usually in response to a request for proposal. (PDPG 11.4.2) If accepted, a proposal can form a contract. |
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Term
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Definition
| Defined by the American Society of Heating, Refrigeration, and Air Conditioning Engineers (ASHRAE) as a method to improve the delivery of a process. Focusing on quality, the method includes making sure that all components of the building are planned, installed, and maintained according to the owner’s requirements. (PDPG 2.8) |
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Term
| What is Total Project Commissioning? |
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Definition
| Includes validation of the project delivery process entirely from the concept stage into facility management. Uses a specialist known as a commissioning authority, or sometimes agent, who is an independent entity not affiliated with the other participants on the project team. (PDPG 2.8) |
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