Managing contractor case study

Why would you appoint a managing contractor? Find out more in this case study.

You can download the managing contractor case study here or find the full text below.

Managing Contractor - Case Study
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The procurement method of managing contractor involves the client appointing a head contractor (the managing contractor) who may provide or engage sub-contractors to deliver the works. The client and the managing contractor generally negotiate a fixed lump sum management fee. The managing contractor may also receive incentive payments for achieving cost and schedule targets. The design team, including architect, is appointed prior to the managing contractor where their primary role is to create a design brief, documentation and specifications as a basis for the tender documentation to be issued to competing managing contractors. Once the managing contractor is appointed, the design team continues to develop the documentation so that the managing contractor can let each specialist package.

Managing contractor is considered appropriate

  • For complex or high-risk projects with uncertain scope, risks or technology.
  • Where a high degree of expert government input is available.
  • Where early contractor involvement is beneficial.
  • Where the managerial skills of the parties involved can best be utilised.
  • When industry input and innovation during the design stage are desirable. The specialist sub-contractors, architect and management contractor work together to develop project requirements, resolve issues and develop the design.

Action to benefit good design

  • Encourage the client to be involved continuously in the project and to appoint only a highly experienced and competent managing contractor.
  • Fully resolve the brief and scope to ensure the design team has clarity and confidence in undertaking the concept design.
  • Nominate the key specialist stakeholders that the design team should approach.
  • Directly engage the design team early in the process and then novate the design team across to the managing contractor.
  • Allow adequate time and resources in earlier stages of the project’s program to develop the design.
  • Engage independent design advice from either a design champion, design quality team (DQT) or the OVGA to assist with quality management in contract and brief development and at key project milestones.
  • Introduce incentive payment conditional upon achieving good design outcomes as measured by independent design advice/peer review.
  • Effective project delivery, especially for alterations to existing buildings, necessitates a contingency for design and construction.
  • Ensure the contract clearly defines what constitutes the completion of design development.
  • Be responsive to the contractual time constraints of the design team and managing contractor.

Case study: Melbourne Park, Margaret Court Arena

Project background

The Western Precinct project will add an extra 1,500 seats to the 23-year old Margaret Court Arena, bringing its capacity to 7,500. The arena, which opened with Rod Laver Arena in 1988, will become the third enclosed stadium at Melbourne Park and will fill the gap between the 3,500-seat State Netball & Hockey Centre and the 10,500-seat Hisense Arena. A retractable roof and new spectator facilities will also be added to the venue. When complete, Margaret Court Arena will be able to host basketball, netball and concerts, in addition to tennis. The Western Precinct project is part of a $363 million larger project, which will also feature eight new indoor courts, 13 outside courts, a plaza and a pedestrian link between AAMI Park, Melbourne Park and the MCG.

The Western Precinct design team is a joint venture between Melbourne’s NH Architecture and international firm Populous and the managing contractor is Lend Lease. The Margaret Court Arena refurbishment is scheduled to be fully operational in 2015. The project is being delivered in three stages:

  1. Enabling works, foundations and concrete structures (2012).
  2. Erection of the roof (2013).
  3. Commissioning of the operable roof and all major services, construction of main building façades and completion of ‘back of house’ facilities including green room, anti-doping facilities, change rooms (2014).

Key initiatives adopted to protect the design quality

The design team was appointed early in the process to work directly with the client Major Projects Victoria (MPV) and stakeholders to resolve the final project scope.

  • Adequate time was given during Concept Design to establish the scope and included consideration of constructability challenges.
  • Adequate time was provided to allow for the design team to consult fully with stakeholders, with clear hold (review) points integrated into the design program.
  • The design team provided informal advice on the building tender to the client.
  • As lead consultant, the architect was the primary point of contact for the design.
  • There was strong integration of the architectural, engineering and other specialist design consultants throughout the process, with strong involvement of the engineering consultants from the early stages of the project.
  • The client (MPV) required ongoing contact with the design team following novation.
  • The design team developed a positive relationship with all stakeholders.
  • The design was able to evolve with the appointed managing contractor at novation, with time for managing contractor’s input into the design prior to agreeing the final Warranted Maximum Price (WMP).
  • The project was regularly re-costed at key hold points, and a WMP was agreed based on the detailed design. This allowed the required flexibility in establishing the best design solution within budget plus allowing adequate time for extensive site assessment and exploration of latent conditions.
  • There was a provision for independent design advice at all key project milestones.


  • Complexity of project, including new roof design, and extensive latent condition challenges due to the brownfield site.
  • Availability of background information within the brief; including existing plans, surveys and detail of any latent conditions.
  • Complexity of building program which was required to allow for the Australian Open to utilise the venue annually thereby restricting construction to between February and November. Responding to moral rights issues of the original design for the adjacent Rod Laver Arena and protecting its original design intent.

What worked well

  • Providing sufficient time to establish the scope and develop the tender documents.
  • Formal and informal interviews with tenderers, with a focus on people and team in the tender evaluations.
  • Getting the best people for each team: a competent design team and an experienced management contractor.