Key takeaways
- Construction project delivery is the whole process of getting a Construction Project built, from the early planning through to the handover of the finished Works.
- On most Projects, the parties work through construction project delivery in stages, from planning and design, through procurement and tender, to construction, completion and handover.
- Several parties share construction project delivery, from the Principal and the Superintendent through to the Head Contractor, the Subcontractors and the Consultants.
- Construction project delivery begins when the Principal decides to carry out a Project, chooses a project delivery method and issues the tender documents.
- Contractors carry more or less design and risk through delivery depending on which project delivery method the Principal has chosen.
What is construction project delivery?
Construction project delivery is the whole process of getting a Construction Project built, from the early planning through to the handover of the finished Works. It takes in the design, the procurement, the construction and the close-out of the Project.
Construction project delivery is sometimes confused with the project delivery method. The two are different things. A project delivery method is the model the Principal chooses for how a Project will be designed and built, such as Construct Only or Design and Construct.
Construction project delivery is the running of the whole Project through every stage. A project delivery method is only one early decision inside construction project delivery.
How does construction project delivery work?
Construction project delivery starts with the Principal. A Contractor joins later, once the Project goes to tender. Most Projects follow the sequence below.
Deciding to build and going to tender
A Project begins when the Principal decides to carry out a build, works out the project delivery method that suits it, and drafts the tender documents. Many Principals settle the delivery method at this early point, and set how the Project will be designed and built before any Contractor sees it.
Receiving the tender and deciding to bid
Contractors become involved once they receive the tender documents. Contractors who study the documents closely work out the risk the Principal is asking them to carry, and price it into the bid before they decide whether to submit.
Winning the tender and signing the Contract
Once the Principal awards the tender, the winning Contractor signs the Contract for the Project. Many Contractors then engage their Subcontractors for the parts of the Works they will not carry out themselves, and set up to start on site.
Delivering the Works
Contractors deliver the Works once the Contract is signed and the site is set up. Delivery runs month by month, while Contractors handle the changes, the delays and the payment claims that come up as the job proceeds, and the Superintendent oversees the work and certifies payment along the way.
Reaching completion and handing the Project back
Contractors reach Practical Completion when the Superintendent certifies the Works are finished except for minor items. Many Contractors then work through the Defects Liability Period, fixing any notified defects, before they settle the final account and the Project fully closes out.
Contractors carry the results of each stage of construction project delivery into the next.
Who is involved in construction project delivery?
Several parties share a Construction Project, and each one takes on a different part of construction project delivery. Below is what each party does.
Principal
Principals own the Project, pay for the Works and appoint the Superintendent to administer the Contract. Many Contractors ask for written confirmation of which individual can bind the Principal, and keep it on the Project file.
Superintendent
The Superintendent administers the Contract for the Principal, certifies payment, assesses Extensions of Time and values Variations. Under AS 4000 the Superintendent acts as the Principal’s agent on some functions and as an independent certifier on others, so Contractors work out which role applies before they respond.
Head Contractor
Head Contractors answer to the Principal for the whole of the Works, and pass parts of the Works down to Subcontractors. Head Contractors stay liable to the Principal for work their Subcontractors perform badly.
Subcontractor
Subcontractors carry out defined parts of the Works for the Head Contractor. Subcontractors hold rights under their Subcontract, and separate rights under Chapter 3, BIF Act that the Head Contractor cannot remove by drafting.
Specialist Trade Contractor
Specialist Trade Contractors carry out work that needs a licence, accreditation or certification the Head Contractor does not hold, across fire, electrical, mechanical, structural and facade trades.
Consultant
Consultants prepare and certify design, and advise the Principal. On a Design and Construct Project, many Principals novate their Consultants across to the Contractor after award, and the Contractor then answers for design those Consultants prepared earlier.
Project Manager
A Project Manager appointed by the Principal coordinates the Project, and usually cannot direct a Variation. Contractors who act on a Project Manager’s instruction without a Superintendent’s direction often cannot claim for the work.
Contractors who know which party controls which part of construction project delivery avoid acting on the wrong person’s say-so.
Common project delivery methods used in Australia
Each Principal usually chooses the project delivery method before a Contractor bids – that choice will therefore establish how much design a Contractor takes on, the payment structure for the project and how early the Contractor gets involved in the project.
Contractors in Australia work under a number of Project Delivery Methods, including:
Construct Only
Under a Construct Only method, the Principal completes the design and engages a Contractor to build it, usually under AS 2124 or AS 4000. The Principal keeps the design risk, and Contractors carry the cost of building to the design they are given.
Design and Construct
Under a Design and Construct method, Contractors take on both the design and the construction, usually under AS 4300 or AS 4902. Contractors on Design and Construct often answer for design the Principal’s Consultants prepared before award, once those Consultants are novated across.
Early Contractor Involvement (ECI)
Under Early Contractor Involvement, the Principal brings a Contractor in during the design phase to price buildability, program and cost, then moves to a delivery phase on agreed terms. Contractors get paid for the early input, and price the build with better information than a cold tender gives them.
Managing Contractor
Under a Managing Contractor method, the Principal engages a Contractor early to manage the Works, often for a management fee plus reimbursable cost, and frequently with a Guaranteed Maximum Price. Contractors see this method on Defence, Commonwealth and large commercial Projects.
Construction Management
Under Construction Management, a Contractor manages the trades for the Principal, and the Principal often holds the trade Contracts directly. Contractors carry less delivery risk under this method, and take less reward.
Alliance
Under an Alliance, the Principal and the Contractor share risk and reward through gain-share and pain-share, under a bespoke collaborative Contract. Contractors meet Alliance work mostly on major transport and infrastructure Projects.
Public Private Partnership
Under a Public Private Partnership, a private consortium designs, builds, finances and often operates a public asset for a set concession period. The construction Contract forms one part of a larger Project finance structure.
Engineer Procure Construct (EPC)
Under Engineer Procure Construct, a Contractor takes single-point responsibility for the engineering, the procurement and the construction, usually on resources and energy Projects under a FIDIC form. Contractors carry almost all of the delivery risk under this method.
Contractors turning over $5M to $100M meet Construct Only, Design and Construct, Early Contractor Involvement and Managing Contractor most often, and meet Alliance and Public Private Partnership work rarely. Rachelle compares each method from the Contractor’s side in project delivery methods for Australian construction projects.
The contract forms used on Australian Projects
Once the Principal settles the project delivery method, the Principal usually picks the form of contract it wishes to use, particularly whether the contract will be based on a Standard Form or purpose-written (bespoke). A number of standard contract forms are familiar within the Australian Construction Industry, including:
- AS 4000-1997
- AS 4000:2025
- AS 4902, AS 4901, AS 4903
- AS 2124
- AS 4300
- ABIC and Master Builders Australia
- GC21
- AUSDEFCON
- NEC4
- FIDIC
and other amended forms.
Contractors rarely work under a published standard form with its original General Conditions. Principals generally amend the standard form contract substantially, either by attaching Special Conditions of Contract or by drafting in-line amendments in the electronic version. Most of these amendments move risk onto the Contractor, shorten the notice periods and widen the indemnities. Contractors who price to the General Conditions of Contract would give up their margin before they even mobilise.
If you need help understanding the different Contract Types and how the Standard Forms of Contract work, as well as the particular amendments used for these contracts, contact Rachelle Hare today.
Rachelle Hare – In My Experience
I spent years inside Tier 1, Tier 2 and Tier 3 Contractors, and I watched the same delivery failures repeat in the same order, whatever the size of the business.
The jobs that finished clean had someone senior owning contract administration from the day the Contractor mobilised. That person kept the notice register as a live document and put the Variation in the week the Superintendent directed the work, while the people who did the work were still on site to describe it.
The jobs that ended in a claim followed one path. The Contractor absorbed the first few changes to keep the relationship comfortable, then kept absorbing them, and reached final account with 11 months of unclaimed work and nothing contemporaneous to support it.
I have also been on the other side of that conversation as in-house counsel for a Head Contractor. I can tell a Contractor how a claim reads when it lands with no notices behind it, and how fast the assessor discounts it.
How to engage Rachelle for construction project delivery advice
1. Call or email Rachelle
Tell Rachelle what the Project is, what stage it has reached and what needs to happen next.
2. Rachelle confirms the scope
Rachelle sets out exactly what work she will do and exactly what you will receive.
3. Rachelle sends a fixed-price quote
Rachelle prices the work in writing before she starts any of it.
4. Approve the quote
You approve the quote and engage Rachelle.
Rachelle prices every construction project delivery engagement as a fixed fee before she starts, with no hourly billing and no open ended arrangements. Contractors can read the full construction lawyer Brisbane page for the legal side of that work.
FAQs about Construction Project Delivery
What is construction project delivery?
Construction project delivery is the whole process of getting a Construction Project built, from the early planning through to the handover of the finished Works. It takes in the design, the procurement, the construction and the close-out. On most Projects the Principal starts the process, by deciding to build, choosing the project delivery method and issuing the tender documents. Contractors and Subcontractors join once the Project goes to tender, and they work through their part of delivery from the bid through to Practical Completion, the final account and the release of Security. Construction project delivery is a broader idea than the delivery method or the construction contract, both of which are parts of it.
How is construction project delivery different from the project delivery method?
Construction project delivery is the running of the whole Project through every stage, from tender to final account. A project delivery method is only one early decision inside that process, being the Principal’s choice of who designs the Project and who builds it. Common methods are Construct Only, Design and Construct, Early Contractor Involvement, Managing Contractor and Alliance. Contractors and Subcontractors often use the two terms as though they mean the same thing. Reading the delivery method first, then working through the delivery day to day, keeps the two clear and stops Contractors pricing one thing and carrying another.
Who is responsible for delivering a construction Project?
The Head Contractor carries responsibility to the Principal for delivering the whole of the Works, and passes defined parts down to Subcontractors and Specialist Trade Contractors under back to back Subcontracts. The Principal owns the Project and appoints the Superintendent to administer the Contract, certify payment and direct changes. Consultants prepare and certify the design, and on Design and Construct Projects the Principal often novates them across to the Contractor. Contractors and Subcontractors answer for their own Works and for the Works of anyone they engage beneath them, which is why the back to back position on each Subcontract matters through the whole of delivery.
What are the stages of construction project delivery?
Most Projects move through five stages. Planning and design, where the Principal settles what to build, the delivery method and the tender documents. Procurement and tender, where Contractors read the documents, price the Works and decide whether to bid. Pre-contract, where the winning Contractor signs the Head Contract and lets its Subcontracts. Delivery, where Contractors build the Works and run the changes, delays and payments month by month. Completion and handover, where Contractors reach Practical Completion, work through the Defects Liability Period, settle the final account and recover their Security. The decisions made at one stage carry into the next.
When does construction project delivery start and finish?
Construction project delivery starts when the Principal decides to carry out a Project, and finishes when the Principal releases the last of the Security after the Defects Liability Period ends. For a Contractor, the involvement starts later, when the tender documents arrive and the Contractor decides whether to bid, and it runs through to the final account and the Security release. Contractors who treat delivery as the construction phase alone leave the tender stage and the close-out stage unmanaged, and both of those stages shape how the Project turns out.
Is construction project delivery the same as the construction contract?
Construction project delivery is the running of the whole Project, and the construction contract is the document the parties sign to record how they will deliver it. The Contract sets out the price, the program, the risk allocation and the process the parties follow when the job changes. Construction project delivery is everything the parties actually do across the Project, from mobilising on site to settling the final account. Contractors work under the Contract through the whole of delivery, and the Contract is one of the tools of delivery rather than the delivery itself.
Get advice on your construction project delivery
Contractors and Subcontractors can get advice at any stage of a Project, from the choice whether to bid through to the final account and the release of Security. Rachelle prices every engagement in writing before any work starts.
Call Rachelle direct on (07) 3063 3373
