Turner Construction Pmcs

Turner Construction PMCS – Group 3

1.) What is Turner’s business strategy?

Turner Construction is primarily in the business of managing risks for both the owner/developer and themselves. They pride themselves to be the best in the business of managing their projects and risks and developing positive relationships with their customer. Their primary strategy is to understand the risks associated with the projects and constantly evaluate ways to keep the project on track and save money for both the client and themselves. Usually in their projects, owner promises GMP (Guaranteed Maximum Price) for the project. There is a built in construction contingency of approximately 2.5% of the project costs.  TCC makes money through a fixed fee for the project. If the project goes south, TCC will have to dip into their fees to support the completion of the project. The construction contingency provides incentive for both the owner and TCC to keep the project on track. Usually there is an agreed formula in the contract to split the construction contingency between the parties (owner and TCC). The owner will take the savings from this split and TCC can record the rest as their earnings from the project. The contingency if returned in the early phase of a project can cause issues with unforeseen risks that may arise later. If it is not released till the end of the project, it can cause stress with the owner.  With the intent of having a uniform forecasting system, they developed IOR (Indicated Outcome Report). This was first developed in the 1920’s and has been constantly enhanced and embedded into the DNA of the company.  Turner’s business strategy is to effectively manage the risks in their projects using IOR, maintain a positive relationship with the owner and retain as much of the construction contingency without compromising the project. Even their bonus structures and audit structures are built that way to ensure there is no compromise in identifying risks in a project....