Owners Representatives, Private Construction Consultants, Construction Managers & General Contractors: How they differ?

February 28, 2010

Owner’s Representatives & Private Construction Consultants:

Owner’s Representatives and Private Construction Consultants are generally used for larger dollar, higher volume projects where the economics point to incorporating high-end management to protect the owner’s interest.

General Contractor (GC) vs Construction Manager (CM): 

Differences appear to be more a product of administrative structure and employee relationships than about the actual techniques of the construction project itself. Besides the Construction Manager At Risk and the Guaranteed Maximum Price the difference is minimal.  In fact, within any given locale, it’s likely the same Mason, Electrician, HVAC or Concrete Contractor will be used regardless of whether the lead player is a GC or a CM.

Hence, owner preference may be the only factor in the decision on which direction to go.

However the trend for high dollar, large, complicated construction projects require a group of highly specialized individuals that can be found with a Construction Consulting agency or firm. Construction consultants usually contain a group of seasoned specialists that offer individual trade talents and as a group have the ability to make complicated large projects progress with relative ease.  The main function of the consultant is to guard and protect the owner’s investment and to manage the entire process.  The fee for a Owner’s Construction Consultant can range from 3 to 6% of the cost to build.  However, it’s the expertise of the consulting firm that will pay off in the end.  A high-end Consulting Team increases potential dividends related to scheduling procedures, cost overruns, delay claims, litigation, estimating deficiencies and Change orders, not to mention the construction procedure expertise and quick decision process ability.  The reality in any project is “time is money.” The longer it takes to build and complete a project, the costs exponentially increase, especially in the case of a large construction project.

Statistics show that only 65% of Construction Projects meet the original planned schedule.  Why?

1)  Owner’s inability to make critical decisions in a timely manner

2)  Design Team’s failure to respond to critical questions in a timely fashion

3)  Design team errors and omissions

4)  General Contractor mis-management

5) Project Management practices and performance

Main Reason:  Insufficient Owner Representation

That being said, what decision should the owner make and who should he choose for his project?

Factors in making the decision, Project Size and Value, project complexity and who has the best experience to handle the owner’s needs from start to finish.

Often overlooked in the decision making process is the proper owner’s representation.

The root cause for project failure is LACK OF, UNQUALIFIED OR INSUFFICIENT Owner’s Representation.

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