I have a problem understanding why the explanation for Project B regarding CM-C with the presumption that it is a fast track delivery. It wasn’t mentioned in the scenario, however, Fast-track was only mentioned in Project C. Can anyone explain what I have missed in this question, or was it just an error.
I got this question wrong because I had Project A as low risk, C and D as medium risk, and Project D as high risk.
Question and Answer as follow :
Q:
The principal of an architectural firm is meeting with their project managers at a monthly meeting, where the team discusses potential projects that the firm is considering pursuing. The following projects are being considered:
- Project A - A repeat client who wants to develop a rental project. The client wants to use a traditional project delivery method and only works with a few qualified contractors in the area.
- Project B - A new client wants to develop an industrial project using a CM as constructor. The architect will prepare multiple bid packages.
- Project C - A repeat client wants to develop a new-construction condominium project using the CM-C project delivery method with fast-track.
- Project D - A new client who has provided positive references wants to develop a commercial project. The client will competitively bid the project.
Drag and place the potential projects in order from least to most risky.
A:
We discuss the various factors that affect how risky a project is in our video Evaluating Risk in Prospective Projects (2:25).
Project A presents a low level of risk to the architect because the client is a repeat client developing a relatively low risk project typology (rental housing) using the design-negotiate-build (DNB) delivery method. DNB tends to be less risky than DBB and other delivery methods because the client is interested in working with a highly qualified contractor, not necessarily the contractor with the lowest price.
Project B presents a high level of risk - the client wants to use a construction manager as a constructor (CM-C) with fast track, which presents risk to the architect because it’s more likely that errors could be made in the drawings with this delivery method, due to the increased speed at which the architect prepares their drawings. The client is also a new client, which is more risky than a repeat client because the architect and client haven’t yet developed a working relationship.
Project C presents a high level of risk for similar reasons to project B, and is also a condominium project. Condominium projects are notoriously litigious.
Project D presents a medium level of risk to the architect - the client is new however they have good references, and a project with competitive bidding is somewhat risky because the contractor may not be as qualified as a contractor selected in the DNB process, however it’s not as risky as CM-C with fast track.