From the course: Construction Management: Managing Risk

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Risk vs. project delivery method

Risk vs. project delivery method

From the course: Construction Management: Managing Risk

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Risk vs. project delivery method

- Earlier, I mentioned different types of project delivery methods, and I suggested that the type of project delivery method chosen by the owner can also affect the risk to a construction company on a project. Traditionally, the delivery method used on a construction project has almost always been design-bid-build. This method of project delivery can pose the least risk to a general contractor. Because if there's a complete set of plans and specifications, you know the rules. You know the scope, it's all in writing, and you can price it accordingly. If the plans are wrong or they don't work, that is generally legally not a burden that the contractor has to bear. That risk belongs to someone else. It's spread somewhere between the owner and the architect. In legal terms, a contractor has that right to assume the plans are correct and buildable. If they're not, they have the right to compensation if those plans have to be amended. That risk of defects in the plans belongs again to the…

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