3 Project Participants and Roles

Introduction

It takes many different organizations and individuals to develop, design, build and operate a building project. This chapter will focus on the different types of organizations and the various roles that an organization may perform on a project.

The Owner

Every building project has one or more owners. The owner is the organization, or individual, who has legal title to the building, and typically, the land upon which the building occupies. There are many (many) different types of owners. Some are individuals, e.g., it is typical for an individual or multiple individuals to own a single-family detached residential house. In other instances the owner may be a private company, e.g., a corporation may own its headquarters building and manufacturing plants. Other projects are initially built by a speculative developer who owns the building during construction but intends to sell the building and property after it is complete, aiming to profit from the development. An example of a speculative developer is a company that develops a new apartment building, and then, following occupancy (or possibly earlier), sells the building to a separate company that will own and operate the building. These speculative developers take on the risk of delivering the project, but they can make high profits if the project is delivered successfully and they sell the property for a profit.  Other projects are owned by public (government) owners, which could be federal, state, or local owners, or even international government entities. Examples of public owners include the General Services Administration (GSA), the different branches of the military, the Department of Veterans Affairs, the Commonwealth of Pennsylvania, the State College Borough, the State College Area School District, and the Pennsylvania Department of Transportation (PENNDOT).

Many of our core facilities that form that support the public, e.g., roads, bridges, schools, correctional facilities, airports, parks, and dams are owned by a public owner. It is interesting to note that there has been an acceleration of more collaborative public projects through Public-Private Partnerships (P3). Through a Public-Private Partnership, the government may provide some long-term concessions, or payment guarantees, to a private sector partner, and then the private sector partner develops and frequently operates and maintains the project. An example is the Dulles Greenway project in Leesburg, VA. For this project, a private company (TRIP II) purchased land to construct a private toll road from Dulles Airport to Leesburg, VA. The organization was provided a 37 1/2 year concession from the Virginia Department of Transportation to allow the private company to collect a toll from each vehicle that used the road. After 37 1/2 years, the road ownership will revert to the Virginia Department of Transportation. The owner was able to leverage the future toll revenue stream to raise the funds needed to construct the project. This specific type of Public-Private Partnership has also been r referred to as a Build-Operate-Transfer (BOT) project. This approach can be used for schools (guaranteed payment per student per year) or correctional facilities (guaranteed payment per inmate). In addition to operating the facility, sometimes these awards also include providing all services, e.g., a prison operator may manage the entire facility.
Some projects have a separate 3rd party developer who is not the owner. A contracted developer can help an owner by guiding them through the delivery process and helping to perform tasks that are the responsibility of an owner.

The owner has a very unique role on the project since they will pay for the facility, and they are the entity that defines the overall scope and contractual structure for hiring all other participants on the project. It is critical that core services providers spend time understanding the core business and values of the owner so that they can provide high-quality service to them.

Service Providers

Most projects, potentially excluding privately developed small residential projects, have many different companies that are engaged in delivering and operating a facility. These companies may be very targeted, with a strong specialty in a very specific area. Examples include a specialty lighting design firm that only performs lighting design, or a specialty controls company that only focuses on installing Heating, Air Conditioning, and Ventilation (HVAC) control systems. But there are many firms that can perform a number of roles on a project. For example, some architectural firms will perform architectural design, mechanical system design, electrical system design, structural design, and site design. Some contractors will manage the delivery of the entire project along with performing concrete construction, framing, and other specific trades on a project. These companies that can perform many different roles on a project do not fit into one specific category of company.

Overall, everyone who performs services for an owner are service providers (and in some people’s terminology ‘contractors’ since they are contracted to perform work for the owner). To identify some typical categories of companies, the later sections will divide the different roles performed by companies into the following categories: Designers, Design Consultants, Contractors, Specialty Contractors, and Vendors & Suppliers.

Designers

There is typically a lead designer(s) on a project who takes responsible charge of delivering a comprehensive, integrated design for the project. On commercial building projects, this company is typically an Architectural firm, but on industrial or infrastructure projects, it is most likely to be an Engineering firm. The designer typically engages in a contractual relationship directly with the owner, and their responsibility is to manage and produce the design documents within the design phase of a project.  Some design firms are quite specialized, e.g., a residential architect who focuses only on single-family houses.  Other design firms may be very diverse and operate in many different market sectors, e.g., offices, hospitals, hospitality, and correctional facilities.  Design firms can also vary in the market geographic market that they serve.  For example, some designers will focus on a local market, and specialize in the codes and construction methods within that market, and they will also build relationships with the local code enforcement and governmental approval agencies, which can be helpful when aiming to gain fast approval of designs.  Other designers will work across many geographic markets and may have multiple offices either within one country or internationally.  These companies may form a joint venture with a more local designer when working on complex projects to ensure that there is local representation on the project.  Finally, some designers work on very specific scopes of work within the design process, e.g., architectural design or early schematic design, while others may perform many different scopes of work within their organization, e.g., architecture, structural, mechanical, interior design, and lighting design, to name a few.  These more full-service designers will need to hire and maintain a diverse team of architects and engineers within their organizations to be successful.

Design Consultants

A lead designer will typically hire additional design consulting firms to perform targeted scopes of design work. These may include scopes such as structural design, lighting design, mechanical system design, electrical design, landscape design, or other specialty areas. Design consultants are typically smaller firms with a specialty in an area, although there are certainly several large design consulting firms. Many students within the structural, mechanical, and lighting / electrical options within Architectural Engineering will work for these design consulting firms, as well as possibly working for more integrated lead design firms.

Contractors

The prime contractor(s) focus on the management of the construction of the project, along with potentially performing specific trade work. The prime construction contractor may be referenced by a diversity of names depending upon the project delivery approach (discussed in the next chapter) and upon the scope of work that they self-perform with their own workforce. For example, if they simply manage the construction activities performed by others, they may be referenced as a Construction Management firm. If they are self-performing work, along with coordinating the work of other trades, they may be referenced as a General Contractor. Overall, the services performed by a prime contractor vary significantly.

Similar to design firms, there are many different types of construction companies.  Some are very small, while others are very large.  Some focus on targeted geographic markets or types of buildings/facilities.  And some perform significant scopes of work on a project while others focus on the management and planning of the construction activities while subcontracting a very large portion of the work.

One distinguishing characteristic of the prime contractor(s) is that they hold a direct contract with the owner. They accept the primary responsibility and risk related to constructing the facility.

Specialty Contractors

A Specialty Contractor performs a specific scope(s) of construction within the project. Examples of specialty contractors are concrete contractors, mechanical contractors, drywall contractors, masonry contractors, roofing contractors, electrical contractors, etc. The companies typically focus on self-performing (with their own labor force) the work for a single trade, or sometimes multiple trades. Specialty contractors will be responsible for purchasing the materials, procuring the equipment, installing, and testing the construction activities for their scope of work. Specialty contractors can be a great source of knowledge within a specific trade or system. They accept a fair amount of risk since they are financially responsible to put their work into place, and they may be able to get a good profit margin if successful, but also may lose a fair amount of money when things do not go as planned. On some projects, you will hear people referring to specialty contractors as ‘subcontractors’ or ‘trade contractors’. Their contract is typically with the lead contractor for the project (which is why they are sometimes referred to as subcontractors), but it can be more appropriate to recognize their specialty area by referencing them as specialty contractors.

Vendors and Suppliers

Vendors and suppliers are companies that support the project by providing different building materials or equipment to the project. Examples include concrete suppliers, lumber suppliers, mechanical equipment manufacturers, electrical equipment manufacturers, excavation equipment rental companies, etc. Some of these vendors and suppliers are very large, and others may be smaller, local vendors. The key difference between a vendor or a supplier, as compared to a specialty contractor, is that they do not have a workforce located on the construction site. Instead, they may manufacture or purchase items, and then deliver them to the site for others to use or install.

Concluding Comments

It is very important to realize that companies can perform many roles on a project, so it is quite difficult to define the specific company type for some organizations. For example, some companies perform both design and construction services, such as integrated design-build firms. Some developers will both owner properties and develop them as speculative (at risk) developments, while also being a 3rd party contracted developer. Some industrial contractors will perform all engineering services on a project, procure all the material (and maybe even own several supply chains such as piping) and perform the fabrication and assembly. The important takeaway is that companies can enter either one very specific role on a project, or series of projects, or they can enter into many different roles. In the next chapter, we will discuss typical project delivery methods used on projects.
This chapter has also not discussed many other participants in the delivery of a project. Projects must always interface with the local government authorities, including the code office, zoning office, and other services, e.g., fire department. Projects will also have insurance, and potentially bonding, companies involved. And most projects have some financial agencies involved in lending money to the owner during the delivery of the project.