Project Delivery Systems – Course Project

Project Delivery Systems – Course Project
You work for Wolverine Professional. Wolverine Professional serves as a professional construction
manager to private companies and government agencies regarding project organization issues. Your
boss just got a new project for Wolverine Professional and she has asked you to study it and advise the
client on selecting the best project delivery system, financial contract type, and procurement method for
the project.
The project information is presented below as a series of facts and assumptions. Remember that there
will be more than one way to select the ‘best’ project delivery system, financial contract type, and
procurement method. This selection depends on what you consider to be the most important factors
related to the project. The key is to have a logical and systematic analysis that is consistent with your
client’s overall needs. In the end, you are required to present just one method to your boss. You
must also provide supporting arguments for the selection.
▪ Background
You have been asked to advise one of the nation’s fastest growing high tech companies, COMDO, on the
best way to accomplish its expansion program. The following paragraphs present the provided
▪ Program Description
COMDO’s expansion program consists of two specific projects . In order to meet accelerating demand
for its latest product, COMDO wants to build a new production facility (Project 1) on a site adjacent
to its current facility in China. It is very important for COMDO to have a Signature building of
High-Quality Design to project an image reflecting its new growth. COMDO also wants to consolidate
its work force (currently housed in 4 different office buildings around the world) into a new 300,000
square foot office building (Project 2) to be built in the northeast region of Ann Arbor, Michigan in
the United states.
▪ Project Drivers
COMDO has advised you that it needs to have the production facility (Project 1) completed as quickly
as possible . Money is no object, since the margins on its product are so high that it will be making
lots of money every day the plant is operating. COMDO also believes that it has a 6-month window
before any of its competitors will be able to develop a comparable product. Wall Street analysts have
been advised of these facts and are expecting the production facility to be up-and-running in a short
period of time to enable COMDO to maintain its competitive advantage. The facility is extremely
complex , using the most advanced and latest clean-room technology, specialized mechanical and
electrical equipment, and control systems. COMDO advises you that this facility will be a
“one-of-a-kind project” and nothing like its other facilities. Successful completion of this facility will
largely be dependent upon the completion of several objective performance tests that measure the
ability of the plant to meet production needs.
The office building (Project 2) , on the other hand, does not pose any significant technical challenges. Its
development is only complicated by the fact that the construction of the building will be phased,
based primarily on how quickly COMDO can terminate its long-term leases on current spaces. In fact,
it is possible that 100,000 square feet of the space will not be constructed and occupied until two
years after the main building is completed. In addition, COMDO was awarded governmental support
and funding to set up the office complex through a program that encourages growing high-tech
companies to have a presence in the inner cities. The government also demanded COMDO to hire
local companies to work on the project. All costs associated with the project need to be reported
periodically to the governmental agency in order to receive the allocated funds. The budget allocated
to the office building (Project 2) is a fixed amount which is very tight, and thus, any expenditure on
the project will be monitored carefully by the governmental sponsoring agency. The governmental
sponsoring agency has also assigned a Representative from the government side to work with
COMDO’s facilities department in delivering this project. However, you know from different sources
that this Representative has earned a bad reputation with the local contractors based on past projects
they have done with him in the Ann Arbor area.
▪ Owner Characteristics (COMDO)
COMDO is run by young entrepreneurs who are unfamiliar with construction, but quite savvy in dealing
with Wall Street. Management does not want to disappoint analysts and needs to demonstrate that it
can competently handle this aggressive expansion program. Its facility department has basically
focused in the last three years on managing space and office allocation demands of an increasing
work force. The facility department typically hires a single third party general contractor for this work,
although on some smaller projects, COMDO will directly hire the trade or sub-contractors without a
general contractor with the assistance of professional construction management firms. Nobody in the
facility department has ever built a new office building or a new production facility.
COMDO upper management fully supports the program, but is skeptical of the capabilities of its facility
department to handle something this complicated. Management has demonstrated a willingness to
use outside consultants for a variety of business issues. You have found out, however, that the
president of the company has a “hands-on” style and frequently likes to have the power to control
even the smallest issues that the company faces.
▪ Marketplace Considerations
The construction market is booming and all major A/Es and contractors are quite busy. There are,
however, several qualified signature design-build firms that have the technical capability and interest
in performing this work. None of them has ever worked with COMDO before.
1. COMDO’s president expects Wolverine Professional to provide a recommendation on the most
appropriate way to structure the framework for its expansion program (i.e., you need to provide
recommendations for the factory and office building projects separately), including project
delivery system, financial contract type, and procurement method . You should analyze the
two building projects separately and recommend a delivery system (develop relationship
diagram), financial contract type, and procurement method for each. The analysis to determine
the project delivery method, financial contract type and procurement method for each building
should use the matrix format discussed in the Instructions to the Course Project video and slides.
You are required to analyze 3 options for project delivery system per building, 3 options for
financial contract type per building, and 2 options for procurement method per building. Please
remember to document all your assumptions and rationale for the selection of criteria, scores,
and weights given to each element of the matrix. Identify any issues, including characteristics of
COMDO that could affect your recommendation. (66 Points)
Project Delivery System Course Project Page 2 of 3
2. Please write a memo as a cover sheet for your recommendation. The memo should provide a
brief introduction to the project and an executive summary of the recommendation you are
providing. (14 Points)
Project Delivery System Course Project Page 3 of 3
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