305Chap4part2-1 - Chapter 4 Part II 180:305 Negotiated...

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Chapter 4 Part II 180:305 Negotiated Contracts
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Negotiation Contractor not selected solely on basis of low bid Design does not have to be complete for contractor selection Cost Contractor is reimbursed for costs of constructing facility Allows for phased construction
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Cost+ Fixed Fee+ Profit Sharing Reward contractor for controlling costs Target Price Sharing formula for under run
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Guaranteed Maximum Price Some contracts establish an absolute maximum price Any costs over GMP are paid by the contractor
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Sliding Fee Bonus for Under run Penalty for overrun
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Unbalancing bids Charge more for items early in project Contractors do this to improve cash flow Reduce overdraft loan
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Figure 4.1 (p. 67) Project/expense income curves.
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Figure 4.2 (p. 68) Unbalanced bid income profile.
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Figure 4.3 (p. 68) Income profile with mobilization payment.
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Construction Management Contracts One firm coordinates the project from concept design through project completion Links owner with designer and contractors
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305Chap4part2-1 - Chapter 4 Part II 180:305 Negotiated...

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