Project Delivery & Contract Strategy
(PDCS)
OVERVIEW
Project Delivery and Contract
Strategy Alternatives
PDCS Descriptions
• ID numbers were used in lieu of names
• Names were given to the PDCS options at
the end of the research
12 PDCS Alternatives
• Each is unique
• Other options may exist but generally are
variants or combinations of the 12
Project Delivery & Contract Strategy
(PDCS)
Criteria for Project Delivery and
Contract Strategy Characterization
PDCS Alternatives
Definition Criteria
• Phase sequence
• Project team relationships
• Compensation approach
Phase Sequencing
• The sequencing of the design,
procurement, and construction project
phases, relative to each other
Project Team Relationships
• Project team relationships are described
in both contractual and functional terms
Compensation Approach
• The type of compensation approach
that is used for each contractual
relationship.
Designer(s)
Constructor(s)
– Firm Price
Cost reimbursable + fixed fee
– Competitive Lump Sum
Unit Price
Guaranteed Maximum Price
Cost Reimbursable + Fee
PDCS Development
• Eleven PDCS alternatives were identified based
on the three criteria
• Survey of CII and non-CII companies was
undertaken to examine the use of each PDCS
alternative
• Data from 82 projects were collected
• Eleven PDCS alternatives are currently used in
industry
• Twelfth alternative was added during development
of tool
Traditional Design-Bid-Build PDCS 01
Traditional with Early
Procurement - PDCS 02
Traditional with Project Manager
- PDCS 03
Traditional with Construction
Manager - PDCS 04
Traditional with Early Procurement
and Construction Manager - PDCS 05
Construction Manager-at-Risk PDCS 06
Design-Build (or EPC) - PDCS 07
Multiple Design-Build (or EPC) PDCS 08
Parallel Primes - PDCS 09
Traditional with Staged
Development - PDCS 10
Turnkey - PDCS 11
Fast Track - PDCS 12
Key Assumptions
• Use tool during front end planning
• Safety goals/objectives can be achieved equally
well by all PDCS alternatives
• Alliance/partnering relationships can be used with
all PDCS alternatives
• Facility startup is excluded except under the
Turnkey alternative
• Infrastructure projects were not adequately
represented
Project Delivery & Contract Strategy
(PDCS)
Selection Factor
Overview
Development of Selection
Factors
Basic Premise: Project objectives are translated
into selection factors that drive the choice of a
PDCS alternative for a project
• Research project 165:
–
–
–
–
Identified typical project objectives
Identified 30 selection factors
Confirmed use and level of importance
Reduced selection factors to 20 by eliminating
redundancy and overlap
Factor Groupings
• Cost-related factors
• Schedule-related factors
• Other factors
(5)
(3)
(12)
Cost-Related Factors
Selection Factor
Factor Action Statement
1.
Control cost growth
Completion within original
budget is critical to project
success
Cost-Related Factors
Selection Factor
Factor Action Statement
2. Minimal cost is critical to
project success
Ensure lowest cost
Cost-Related Factors
Selection Factor
Factor Action Statement
3. Owner’s cash flow for the
project is constrained
Delay or minimize
expenditure rate
Cost-Related Factors
Selection Factor
Factor Action Statement
4. Owner critically requires
early (and reliable) cost
figures to facilitate financial
planning and business
decisions
Facilitate early cost estimates
Cost-Related Factors
Selection Factor
Factor Action Statement
5. Owner assumes minimal
financial risk on project
Reduce risks or transfer
risks to contractor(s)
Schedule-Related Factors
Selection Factor
Factor Action Statement
6. Completion within schedule
is highly critical to project
success
Control time growth
Schedule-Related Factors
Selection Factor
Factor Action Statement
7. Early completion is critical
to project success
Ensure shortest schedule
Schedule-Related Factors
Selection Factor
Factor Action Statement
8. Early procurement of longlead equipment and/or
materials is critical to
project success
Promote early procurement
Other Factors
Selection Factor
Factor Action Statement
9. An above-normal level of
changes is anticipated in
the execution of the project
Ease change incorporation
Other Factors
Selection Factor
Factor Action Statement
10. A below normal level of
changes is anticipated in
the execution of the project
Capitalize on expected low levels
of changes
Other Factors
Selection Factor
Factor Action Statement
11. Confidentiality of business/
engineering details of the
project is critical to project
success
Protect confidentiality
Other Factors
Selection Factor
Factor Action Statement
12. Local conditions at project
site are favorable to
project execution
Capitalize on familiar project
conditions
Other Factors
Selection Factor
Factor Action Statement
13. Owner desires a high
degree of control/influence
over project execution
Maximize owner’s controlling role
Other Factors
Selection Factor
Factor Action Statement
14. Owner desires a minimal
level of control/influence
over project execution
Minimize owner’s controlling role
Other Factors
Selection Factor
Factor Action Statement
15. Owner desires a substantial
Maximize owner’s involvement
use of its own resources in the
execution of the project
Other Factors
Selection Factor
Factor Action Statement
16. Owner desires a minimal
Minimize owner’s involvement
use of its own resources in the
execution of the project
Other Factors
Selection Factor
Factor Action Statement
17. Project features are welldefined at award of the
design and/or construction
contract
Capitalize on well-defined scope
Other Factors
Selection Factor
Factor Action Statement
18. Project features are not
well-defined at award of
design and/or construction
contract
Efficiently utilize poorly defined
scope
Other Factors
Selection Factor
Factor Action Statement
19. Owner prefers minimal
number of parties to be
accountable for project
performance
Minimize number of contracted
parties
Other Factors
Selection Factor
Factor Action Statement
20. Project design/engineering
or construction is complex,
innovative, or non-standard
Efficiently coordinate project
complexity or innovations
Project Delivery & Contract Strategy
(PDCS)
Weighting Selection Factors
Weighting Selection Factors
Preference Rank
• Up to six selection factors should be
identified
• Selection factors should be ranked in
ordered from most important to least
important
• Preference rank order should be tied to
priority of project objectives and other key
project requirements
Weighting Selection Factors
Preference Scores
• Preference scores quantify the relative importance
of each selection factor
• Highest ranked selection factor is always assigned
a preference score of 100
• Other selection factors are assigned preference
scores to reflecting the magnitude of their
importance to the project relative to the firstranked factor.
• Use increments of five (5) or ten (10) at a
minimum
Weighting Selection Factors
Illustration
Factor Action
Statement
Control cost growth
Maximize owners
controlling role
Ensure shortest
schedule
Ease change
incorporation
Rank
Preference Score
2
4
85
55
1
100
3
70
310
Weighting Selection Factors
Experienced Based
• Priorities of project objectives should be a
guide
• Knowledge and experience of project
managers and other team members should
be tapped in weighting selection factors
• Preference ranking and scores are not
totally objective but should not be totally
subjective either
Weighting Selection Factors
Relative Weighting
• Preference scores are used to calculate the
relative weighting between factors
• Sum of relative weights always add to 1.00
• Relative weights are used with effectiveness
values to calculate a rating score for each
PDCS alternative
Weighting Selection Factors
Example Calculation
Factor Action
Statement
Control cost growth
Maximize owners
controlling role
Ensure shortest
schedule
Ease change
incorporation
Rank
Preference Score
Relative Weighting
2
4
85
55
0.27
0.18
1
100
0.32
3
70
0.23
310
1.00
Project Delivery & Contract Strategy
(PDCS)
Effectiveness Values
Effectiveness Values
Description
• Represent performance level of each PDCS
alternative relative to the other PDCS alternatives
for each selection factor
• Scores are between 0 and 100(increments of 5 or
10)
• Assessed on selection factor-by-factor basis
• Factors independent of each other
• PDCS alternative with highest level of performance
for a selection factor is given a score of 100
• PDCS alternative with lowest level of performance
for a selection factor is given a score of 0
Effectiveness Values
Illustration
PDCS Number
Traditional Design-Bid-Build
Traditional with Early Procurement
Traditional with Project Manager
Traditional with Construction Manager
Traditional with Early Procurement and Construction
Manager
Construction Manager-at-Risk
Design-Build (or EPC)
Multiple Design-Build (or EPC)
Parallel Primes
Traditional with Staged Development
Turnkey
Fast Track
PDCS 01
PDCS 02
PDCS 03
PDCS 04
PDCS 05
Factor 9
Ease
Change
Incorporation
100
80
100
100
70
PDCS 06
PDCS 07
PDCS 08
PDCS 09
PDCS 10
PDCS 11
PDCS 12
60
10
0
20
40
0
70
Effectiveness Values
Basis
• Developed using expertise of research team
• Confirmed through workshops with owner and
contractor project manager representatives
• Documented rationale behind effectiveness values
for each selection factor
• Ensured approach met requirements of decision
theory analysis technique
• Tested validity of effectiveness values statistically
Effectiveness Values
Examples
Factor 1
Factor 2
Factor 3
Factor 4
Factor 5
Factor 6
Factor 7
Control cost
growth
Ensure
lowest
cost
Delay or
minimize
expenditure
rate
Facilitate
early cost
estimates
Reduce or
transfer risks
to contractor
Control
time
growth
Ensure Promote early
shortest procurement
schedule
PDCS 01
80
90
100
0
80
20
0
0
PDCS 02
PDCS 03
PDCS 04
PDCS 05
PDCS 06
PDCS 07
PDCS 08
PDCS 09
PDCS 10
PDCS 11
50
80
80
50
60
90
70
0
0
100
100
70
70
60
40
80
80
0
0
80
70
90
90
60
40
10
30
50
60
0
20
10
10
20
70
90
80
20
0
100
50
60
60
20
70
90
80
10
0
100
50
20
20
50
70
90
80
0
0
100
50
10
0
40
80
100
90
90
60
100
90
0
0
90
100
100
100
80
50
100
PDCS 12
40
40
100
60
0
80
100
100
Factor 8
Effectiveness Values
Rationale
Factor 2 Minimal cost is critical to
project success
Ensure lowest cost
PDCS
01
PDCS
02
PDCS
03
PDCS
04
PDCS
05
PDCS
06
PDCS
07
PDCS
08
PDCS
09
PDCS
10
PDCS
11
PDCS
12
90
100
70
70
60
40
80
80
0
0
80
40
Comments:
Serial phasing provides more time to find lowest cost, though slow
implementation may engender cost escalation – minimal cost at
sacrifice of overall completion schedule.
Arrangements involving a sole contractor with responsibility for design and
construction, coupled with competitive bidding work well for minimizing
cost – minimal cost at the sacrifice of owner’s control over finished project.
Project Delivery & Contract Strategy
(PDCS)
PDCS Tool Walk-Thru
• Tool Workbooks
• Tool Operations
Project Delivery & Contract Strategy
(PDCS)
Benefits of PDCS Tool
• Considers larger set of relevant alternatives in the PDCS
selection process
• Encourages decision-makers to identify and focus on
project objectives and other critical success factors early in
project development
• Enhances insight into PDCS selection through systematic
consideration of all decision variables
• Provides a defensible rationale for PDCS selection based
on quantification of alternatives
CII Value of Best Practices
Corporate Survey
• Questions regarding PDCS Tool
– How frequently over the past two years
would you say that the PDCS structured
process was used on your capital projects?
– None or A Few(1); About Half (4); All (7)
– Please indicate how valuable you believe the
PDCS structured process is to your
organization?
– Not Valuable (1,2); Moderately Valuable (5-7);
Extremely Valuable (9,10)
CII Value of Best Practices
Corporate Survey
• Use of PDCS
– Eleven stated about half to All use the PDCS
– Average = 5.3
• Value of PDCS
– Eleven stated highly moderate to extremely
valuable process/tool
– Average = 7.8
Questions and Discussion!
Thank You!