Choosing a Project Delivery Method

Choosing a Project Delivery Method: Design-Build Done Right

Project delivery is a comprehensive process including planning, design and construction required to execute and complete a building facility.

Determining the project delivery method is one of the most important decisions made by every owner embarking on a construction project. Choosing the best method for any project must start with a good understanding of the choices available. Owners must also have a firm grasp of the impact of each choice, because the delivery method: establishes when parties become engaged; influences the choices of contractual relationships; and influences ownership and impact of changes and modification of project costs. In all delivery systems, there is always a minimum of three parties involved: owner, designer and contractor. It is important to choose a delivery method that best meets the unique needs of each owner and their project.

Project considerations have fundamental impacts on the delivery method selected. These considerations include a realistic budget, a schedule that includes a reasonable performance period, a responsive and quality design process, a risk assessment with allocation of risks to the appropriate parties and a recognition of the level of expertise within the owner’s organization.

Commonly Used Project Delivery Methods

An owner has several areas of concern when embarking on a project. The chosen project delivery method may be hybrid of multiple delivery methods. Each of these delivery methods establishes different relationships among the parties involved and different levels or risk.

Design-Bid-Build

The traditional US project delivery method typically involves three sequential project phases: the design phase; the bid phase; and the construction phase. This sequence usually leads to a sealed bid, fixed-price contract.

Pros

  • This method is widely applicable, well understood, and has well-established and clearly defined roles for the parties involved.
  • This method is the most common approach for public owners having to comply with local, state or federal procurement statutes.
  • The owner has a significant amount of control over the end product, particularly since the facility’s features are fully determined and specified prior to selection of the contractor.

Cons

  • The process may have a longer duration when compared to other delivery methods since all design work must be completed prior to solicitation of the construction contract.
  • The designer may have limited ability to assess scheduling and cost ramifications as the design is developed, which can lead to a more costly final product.
  • The owner generally faces exposure to contractor change orders and claims over design and construction issues since the owner accepts liability for design in its contract with the contractor.

Design-Build

This method of project delivery includes one entity and a single contract with the owner to provide both architectural/engineering design services and construction.

Pros

  • DB can produce a project more quickly than a conventional DBB – fast-track, less project duration.
  • There is a single point of accountability for design and construction.
  • Cost efficiencies can be achieved since the contractor and designer are working together throughout the entire process.
  • Change orders would typically arise primarily from owner changes.

Cons

  • Less design control and involvement by the owner and stakeholders.
  • Owner must be highly responsive in its decision making to take full advantage of the speed of DB.
  • The owner does not receive the benefit of the checks and balances that exist when it contracts separately with a designer and a general contractor.

Construction Management at Risk

This delivery method entails a commitment by the CMR for construction performance to deliver the project within a defined schedule and price, either a fixed lump sum or a guaranteed maximum price. The CMR provides construction input to the owner during the design phases and becomes the general contractor during the construction phase.

Pros

  • The owner gains the benefit of having the opportunity to incorporate a contractor’s perspective and input to planning and design decisions.
  • The ability to ‘fast-track’ early components of construction prior to full completion of design

Cons

  • A premium is placed on the proper selection of the CMR, based on the CMR’s particular skills and experience, to provide the best value to the owner.
  • While the CMR provides the owner with professional advisory management assistance during design, this same assistance is not present during the construction phase, as the CMR is in an ‘at-risk’ position during construction.

Choosing the Best Method

Several factors need to be considered when selecting a project delivery method that best fits the goals and requirements of the owner and the project. Contact Jaime Partners to learn which method would be most beneficial for you and your project.

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