General Contractor / Design & Build
Whether as a private builder or a commercial real estate developer, in both cases it can make sense to build a structure in a
contractor relationship at a fixed price.
Against the background of our experience in the calculation and costing of construction projects, the tendering, execution and efficient coordination of construction work, we also offer to provide all construction services for the turnkey construction of a building as a general contractor (GU) for you. The building is thus constructed by us on your property at a fixed price in line with the market and you leave the cost and deadline risk to us.
In contrast to the fiduciary construction support offered by an owner’s representative, external construction manager or architect, such a type of contract creates a binding cost security (within the framework of the contract concluded and the design and construction specification selected). Of course also Dates and milestones are bindingly agreed and secured by positive or negative incentives (such as bonuses, penalties, etc.). This is not, or only to a limited extent, feasible with an architect on a fiduciary basis, since in terms of construction it is strictly speaking a matter of pure assistance. Although the architect is available to you as an expert supervisor (construction manager) and as a coordinator during execution, the responsibility for costs and deadlines basically falls to you as the client. An architect is only liable for his professional planning and corresponding control of the construction work, rarely for the economic result of the construction project.
With a GU you pass on this economic responsibility and the cost risk with regard to efficient, speedy and economical execution to them. Of course, this constellation does not relieve you of the responsibility that the required plans must be available correctly and in accordance with the process.
In order to create clear conditions and to establish rules that are comprehensible for all parties involved, the required plans and documents are set out in a document regulations and defined in a plan delivery program realistically and tracked on an ongoing basis. This must of course be coordinated with the desired schedule of the execution and forms the basis for the interaction of all parties involved in the construction, especially the planners.
To reduce or get rid of this responsibility as well, we come to the next point:
On request we also offer our TUservices as total contractor on. In addition to execution, this also includes all the necessary planning services that are required for successful and functional project execution. A total contractor (or general contractor GÜ) takes everything off your hands, except one thing: your wishes, requirements and ideas – your vision.
Whichever form of cooperation you choose, your advantage is our intensive business relationships with experienced partners who share our business philosophy. Customers appreciate our fast, prudent and budget-conscious performance and the personal approach, with the signature of an owner-managed company.
Glossary of terms
The GU has no or only partial planning responsibility. He assumes the complete cost and schedule risk, distributes the necessary work among firms on the open market, and lives off the margin he makes by pushing prices and managing contracts well. If the plans contain errors or are changed during the construction period, there is a risk of subsequent changes, as the planning is controlled by the client. Contrary to the common opinion that building with a JV is more expensive, it can be assumed that a JV pays off by its presence and economic interest alone, as it spurs the planners and executing companies on to the highest possible efficiency and often significantly speeds up the construction process. As there are numerous JVs on the construction market, the prevailing competitive pressure usually results in a correspondingly healthy market price, which neither private nor institutional builders need to shy away from.
The general contractor usually assumes the execution, schedule and cost risk at a fixed price. There may also be variable compensation arrangements combined with a cost ceiling to allow the client to participate to a certain extent in the opportunities and savings.
The client must make the architect’s and execution planning available to the general contractor on time. Engineering and specialist plans may be regulated differently as required. Specific workshop plans or production plans are with the subcontractors and specialist companies. However, the basis and the motor for coherent, on-time construction progress are usually the work plans of the client’s architect. The construction management and control of the execution is carried out by the general contractor, whereby the client himself can still appoint his own construction management or site management in order to control the general contractor.
The client no longer has to keep an eye on the flood of individual offers, invoices and subcontractor service contracts, as only the general contractor invoices according to construction progress and payment schedule are cost-relevant for him.
The client hands over the planning responsibility as well as the scheduling and financial risks to the total contractor (in Germany usually called general contractor GÜ), his task and responsibility is limited to defining his wishes and the release and confirmation of the planning documents, which he then receives on an ongoing basis before execution. For each document, he must confirm that what has been executed is in accordance with his wishes and the defined objective. So he is still involved in the process, but has very little responsibility. Often he has a concept architect who reviews the TU execution plans to see if they meet the agreement. He must release progress payments on time if the TU is on track.
The TU owes a defect-free building that meets the standards and laws and complies with the specifications of the client.
This type of cooperation often comes about through a functional tendering process, in which a client merely describes the objective of the planning and hardly provides any concrete planning documents.
Planning responsibility, cost responsibility, everything from a single source. If you buy a house off the shelf that a property developer / builder has planned to exploit (subsequently sell) the residential units, that is more or less a TU contract where the vendor has acquired and developed land at their own risk (i.e. planned according to assumed market demand without specifically consulting the ultimate owners). In principle, the following applies: If the property belongs to the TU / developer, the subsoil risk lies with him, because “subsoil risk is developer risk”. Comes all ready developed incl. property, the building ground risk remains with the seller.
Advantage: You reduce cost risks to a minimum and only pay your special requests as an additional price.
Disadvantage: You have no direct influence on many architectural details.
The services are awarded and negotiated individually in contracts. For this purpose, the planning must be fully developed and the architect, as the client’s “building trustee”, usually also takes over the construction management. He awards the contracts in consultation with and on behalf of the client on the basis of the agreed planning basis. In principle, the orders are only concluded by the signature of the building owner.
Contracts for work and services are often NPK-based (catalogue of standard items) and must contain precise quantity specifications in the bill of quantities for the respective items put out to tender, which must of course in turn be precisely verified in the case of invoicing by means of measurement or measurement (German designation), both arithmetically and qualitatively on the construction site by checking the quality of work and completeness.
Cost performance under this fiduciary type of contract depends to some extent on the quality of the architect as designer, “cost manager” and construction manager. However, the architect can only be held liable for unexpected additional costs to a limited extent, if at all.
The architect develops a plan with the client. The planning provides the consensus basis for further decisions, and based on this the architect takes over if necessary. also construction management functions (HOAI Phase 8, SIA 102 Phase 5.2 Realisation). He can make technical decisions himself, since the comprehensive planning already defines his scope of action. The builder has thus left him a margin of decision “to the faithful hand”. The architect can therefore sign work reports “in trust”, approve invoices and arrange minor orders himself, but basically he is an assistant and does all this “on behalf of the client”. For any cost decision, the building owner must be informed and agree. The architect checks technically and submits it to the builder for confirmation. Contracts are concluded between the client and the executing companies. Invoices go to the builder’s address “via” the architect’s office as the postal contact point. The architect is fully responsible for the correct implementation of the design (which complies with standards, laws and the rules of architecture), but not specifically for the financial decisions and consequences. With this type of contract, the client has a good basis and relinquishes technical responsibility, while retaining the financial responsibility.