Methods

Criteria

Weight

Score (from 1-5, where 5 is the best)

Description

Design-Bid-Build;

Engaging with a single entity to provide designs or, construction services.

Understand the technical and resource capacity according to the requirement

Escalating cost and schedule with measuring potential risks

Works separately with another entity

Medium

4

As a multi-national company explored in the TechnipFMC case study, Technip FMC; needs to adopt Design-Bid-Build; method to develop and improve their works. Design-Bid-Build; helps in encouraging the construction companies to improve their existing architecture, engineering and construction processes (Arshad, et al., 2019). However, it requires more legal stability and development to prevent contractual risks.

Design-Build;

Hired as an entity to provide design, construction and performance under a single contract

It can be performed by their resources or can be subcontracted with other entity

Medium to High

4.5

The "Design-Build" is a well-adopted 'Project Delivery' method across the USA because of its competitive 'superior cost' and timely delivery sense. Almost 75% of the "D-B" project has finished before their deadline (Chen, et al., 2016). It can help the company mentioned in the TechnipFMC case study to increase its revenue by providing work before the actual time and schedule. However, 'cost-overrun' is still uncertain.

CM at Risk; or CMAR;

Under the CM at-risk; method noted herein TechnipFMC case study, the construction manager needs to deliver the performance under the Guaranteed Maximum Price; contract

The construction manager can be an individual entity hired by a project owner at their planning or pre-planning stage to work on the schedule, cost, cash flow, engineering and methods.

High

5

The implementation of the "CM at-risk" delivery method enables the construction company to make the project owner agreeing on the "guaranteed maximum price" when the project is at 80% completion (Kim, et al., 2020). It helps in mitigating delays and the last moment changes efficiently. It is stated in the TechnipFMCcase study that it also helps the project owner to reduce their 'construction' cost.

Types of Contract

Criteria

Weight

Score (from 1-5, where 5 is the best)

Description

Lump sum; Contract

Agreeing on a lump sum price for a particular project before the starting of the project

The contract will be based on the agreement in executing and completing the discussed project within the schedule and decided lump sum money

High

3

The "Lump sum" contract can be a risk to the construction company if not completing the delivery within time. However, as noted in the TechnipFMC case study interested and conscious project managers are comfortable with this contract (Sancho Calderón, 2017). However, during the actual project process, the 'target-cost' can act as a burden in generating quality performance. So, it is the responsibility of the organization to appoint a credible team and managers to handle a project under this contract.

Guaranteed Maximum Price; Contract

The company needs to efficiently calculate the maximum project price to not face any financial loss

Enhances the company to plan independently, but it requires to make the plan under its initial offered cost

High

4.5

The application of the "Guaranteed Maximum Price" contract is beneficial in strengthening the project mechanisms and focusing on specific areas. It is different from the 'target costing' factor, where "GMP" can generate creative works and measures the project operations(Bugrov & Bugrova, 2019). The analysis of this contract needs to be done carefully to achieve its maximum outcome.

Cost-plus Fixed Fee; Contract

The prices will be finalized after understanding the requirement and capacity of the project to generate the profit

It can be changed according to the performance generation

High

3.5

It is the most beneficial method while conducting 'outsource' construction works. The implementation of the "Cost-plus Fixed Fee" contract is related to the 'procurement', 'engineering', and 'construction' processes (Mahmoudi, et al., 2020). The additional fees can be received as a profit for the organization. It is a sustainable and low-risk process.

Methods

Criteria

Weight

Score (from 1-5, where 5 is the best)

Description

Competitive;

Competitive; procurement process related to competitive proposals, bidding, direct purchases, maintenance, professional and non-professional service generation, and material and supply processes

The bidding process allows the best value at the best price

Medium

3

The different 'procurement' methods are responsible for making complex decisions in a construction project. A client can appoint an entity through the Competitive; procurement or bidding process(El-Sawalhi & El Agha, 2017). It is an important process as it defines the companys procurement method and ability to work on certain situations. It is transparent and generates result according to the market demand and prevent favoritism among the construction industry.

Negotiated;

An individual entity offers price according to their capacity and performance standard to the project owner

There is no competition between the constructors and the organization select for their ability and good portfolio in a negotiated pricewith an agreement from both party

High

4.5

The Negotiated bidding method enables a construction company to serve a long-term relationship with the project owners company. The negotiated procurement process is relatively common and highly successful among the private sector with individual clients (Kim, et al., 2019). It is easier to engage with big projects without engaging in any competition.

Best Value;

Focuses more on the performance generation and expertise quality rather than choosing by the cost

The value-based construction work can be compared with the cost and beneficial aspects before engaging an entity

High

5

Acquiring an efficient project result is related to both value and cost. However, due to the 'cost-bidding' process, receiving 'value-based' work is rare. It is a perfect opportunity in producing 'value-based' work within an agreed budget to get noticed by other big organizations. The best value procurement method enables the project owner to select an entity by judging their management capability and their risk-management techniques in any situation (Perrenoud, et al., 2017). The project owner will not engage with a construction company who is not clear about their capacity and risk mitigation plans.

Plans

Intensity

Description

Risk Register;

High

For the present TechnipFMC case study, it is important to identify and register the potential risks to prevent any uncertain situation during the construction works. The 'risk register' is mostly related to the potential issue that can delay the project processes other than the 'regulatory compliance'. The main risk related to the 'construction industry' is delayed schedule, 'cost overrun', and performance deterioration that involves the project owner, contractor, and 'subcontractor'(Abd El-Karim, et al., 2017). The engagement of experienced managers and workers can help the organization to identify any potential risks at an earlier stage. The international projects need more concentration and a thorough background check to avoid any resource and cost-related risks in the beginning.

Risk Quadrant Analysis;

High

Risk Mitigation;

High

After identifying the potential risks, it is important to implement risk mitigation planning to reduce the disruptions. The appropriate project visibility and flexibility can resolve the negative impacts related to the project resources and coordination (Zailani, et al., 2016). The 'optimization' of the 'supplier' development and proper project planning for reducing 'cost overrun' and delay issues.