What is Innovative Contracting?
Innovative Contracting incorporates new practices to supplement traditional low-bid, design-bid-build contracting. Innovative contracting can decrease project delivery time, reduce construction time, improve safety, incorporate innovation, and reduce costs.
In Traditional Contracting, the project owner must manage two separate contracts – one with the designer and one with the contractor. If something goes wrong or there are unforeseen circumstances requiring changes, the designer and contractor may suggest different reasons, and even blame one another, for the cost overruns or schedule setbacks, which can lead to litigation and delays and add to the overall project cost.
In Design-Build contracting, the owner manages only one contract with a single point of responsibility. The designer and contractor work together from the beginning, as a team, providing unified project recommendations to fit the owner’s schedule and budget. Any changes are addressed by the entire team, leading to collaborative problem-solving and innovation. While single-source contracting is the fundamental difference between design-build and traditional contracting, equally important is the culture of collaboration inherent in design-build.
Job Order Contracting
Job Order Contracting (JOC) is a project delivery method utilized by organizations to get numerous, commonly encountered construction projects done quickly and easily through multi-year contracts for a wide variety of renovation, repair and minor construction projects. JOC is most commonly used to clear deferred maintenance backlog, perform rapid response recurring project needs, and construct renovation projects. JOCs are a competitively bid, fixed price, multi-year construction contracts based on established or published unit prices. These contracts are indefinite delivery-indefinite quantity (IDIQ) contracts for on-call construction services. A JOC serves as an umbrella contract with a potential maximum amount of work over a specified term.
In Construction Management-At-Risk Contracting (CMAR), the owner first selects and retains a design firm, similar to a design-bid-build project. Once the designer is selected, the project moves forward with the early stages of design with the intent of initiating a second contract with a construction manager at 30-60% percent design. With CMAR, the owner has oversight of the entire process and can ensure that the CMAR firm (construction manager) and selected designer have the opportunity to develop an immediate and strong, collaborative working relationship.