Single Source Contracting: What is it and what is the benefit?
August 31, 2011
Building or renovating a marina can be, and usually is, a long and complicated process. One of the major obstacles these days is the permitting procedure. In order to obtain the necessary permits to move forward a good deal of time and money is required to complete concept designs, impact studies and environmental assessments.
Permit approval brings a developer only to the starting line of a project and the next stage will usually involve a complicated mix of marina consultants, architects, engineers, contractors, sub-contractors and a whole host of “experts”. Apart from the obvious cost of all these experts, a huge amount of the developer’s time is required to define their input, coordinate their work and assess their recommendations. The result of this process is a specification or tender document, which is then sent out to various marina construction companies who spend more time and money reworking the designs to suit their particular dock systems. This can involve cutting corners and interpreting specifications to allow the very minimum possible so as to ensure a competitive bid.
This is not an ideal situation for a developer who wants a quality marina. There is no doubt that this tried and tested system works; however, it comes at a cost of both time and money.
Single source contracting turns the traditional way of approaching a construction project on its head. Instead of starting at the beginning and battling forwards step by step, the single source option starts with the end product and works backwards. Most developers know more or less what they want even before entering the permitting stage. Certainly, there is market analysis to be done to define berth sizes, wave studies, dredging plans, berthing layouts, electrical designs, etc. The list goes on.
Single source offers the developer the opportunity to appoint a single main marina construction contractor from day one, making them responsible for coordinating all of the preliminary work and giving the developer one point of contact for all aspects of the project. The appointed contractor then works closely with the developer from day one in a partnership to ensure that the developer is getting exactly what he wants and to the highest standards required. The contractor takes over the burden of day-to-day coordination of most facets of planning the marina project, freeing up the developer to concentrate on his business. The developer saves a huge amount of time by avoiding a lengthy bid process, a huge amount of effort by appointing a single point of contact, and a huge amount of money by avoiding expensive consultants who make their margins on their advice rather than on actual construction.
Weekly meetings ensure that the end product is always the goal and the developer is not side tracked by uneconomic or unbuildable ideas. The developer is involved at every stage, but is not required to manage or oversee the daily issues. The single source contractor will ultimately build the facility, so he can absorb much of the initial cost in the planning stage, confident that he will make his fair margin on the actual construction contract.
The key to a successful single source /design-build project is confidence. The developer must be confident that the contractor is a strong and professional company with a good marina dock system that is suitable for his marina. He must also be sure that the contractor he’s appointed as his single point of contact has the necessary skills and abilities to carry out all stages of the work properly. The best way to verify a contractor’s ability to perform is to look at the contractor’s past performance and reputation in the industry.
Remember that the alternative is for the developer to put his trust in a handful of different companies who all have their own goals, and who will end up often costing more for a lesser end product. Single source contracting offers the developer the opportunity to develop his marina in a partnership with the experts who will actual build the facility from day one.