Many large construction projects, including hospitals and health care facilities, utilize a Fast Track project delivery process. The goal of the Fast Track method is to bring a facility from concept to reality in a fraction of the time of a normal building project. Naturally, this process provides certain benefits and risks that an owner of the project must be comfortable with.
The Fast Track process saves time by engaging the contractor prior to the completion of design. Generally, the contractor is compensated using a “Cost Plus the Contractor’s Fee” method, often with the contractor giving a Guaranteed Maximum Price (GMP). Once design is near 60% to 70% complete, the contractor can establish its GMP and engage subcontractors and suppliers. Likewise, permits for construction can be obtained from governmental entities at this point. Construction commences and continues while design is ongoing. For a successful project, this compressed schedule takes considerable knowledge, resources, and coordination.
One potential benefit to the Fast Track process, particularly in health care projects, is the late release of design documents. Often, this allows a health care facility to select its major medical equipment, such as imaging equipment, at a later date. As a result, the owner may procure the latest technology without having to renovate a newly constructed facility. Also, the owner is not required to finance the equipment for long durations without generating revenue. These benefits can be helpful to an owner seeking to stay on the cutting edge of technology while controlling its costs.
The Fast Track process, however, is rife with potential pitfalls. While the late release of design documents may provide some benefit, the architect’s incremental release of design documents increase the frequency of mistakes or conflicting information in the plans and specifications. Likewise, a contractor who relies on incomplete project documents to provide its schedule and pricing information may need periodic adjustments to both. Thus, contingency funds and Change Orders must be used to equitably compensate the contractor.
For a successful Fast Track project, the owner, architect, and contractor must engage in an open and flexible relationship. Also, the owner should not expect a savings in construction or design costs. Often, the opposite is true. Fast Track projects come in over budget and late more often than any other procurement method. The benefit to the owner should come in having a new facility on-line in a shorter period of time from the initial concept. It is important for an owner to assess the level of risk it is comfortable with, its level of sophistication in administering construction projects, its prior relationships with capable architects and contractors, and the urgency of its need before engaging in a Fast Track project.
Hall Render has experience in supporting healthcare providers throughout the Fast Track process. From structuring the agreements to fairly and proportionately allocating the risks among the various competing interests, to bringing any project disputes to resolution, Hall Render’s experience in the construction industry can provide an invaluable benefit.
