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April 2021

Operational Benefits of Design/Build or Alternative Delivery

Design/Build provides a platform to increase collaboration, reduce schedule, and ultimately provide the most value to the owner.  Providing the most value is not always the lowest cost initially.  Many times operational cost and furthermore future maintenance issues are not considered when selecting equipment to be specified on projects. 

Design-Bid-Build was the predominant delivery method for decades.  This delivery method was used on public and private projects.  Under this scenario, the project was designed and specified typically with an or equal specification that resulted in the lowest possible cost for all equipment included in the project.  Under this delivery method the owner always received the equipment that was the lowest cost that could generally meet the spec.  All equipment always has numerous items that are not exactly the same, but generally provide the same performance. 

Private Industry moved to Design-Build prior the public sector.  The reason behind this is that private industry is typically making products or running plants and the operational side of the equation is almost more important than the initial capital cost.  If a pump or processing piece of equipment goes down more regularly due to problems which shuts down a plant or manufacturing process, this can cost the owner much more than a little bit more for the initial capital expense.  Private industry (particularly manufacturing, food processing, etc.) needs to keep the facilities running.  Downtime is unwanted, unacceptable, and much more costly due to equipment problems.

The public sector has been able to realize this same benefit through the use of alternative delivery and specifically design/build.  Through the collaboration with the design/build partners, specific or critical equipment may be provided within the design/build platform to meet the owner’s needs and not just the lowest priced piece of equipment on bid day.  Many factors go into selecting equipment – initial cost, replacement cost, spare parts cost, spare parts availability, existing service relationships, etc.  Ultimately, the owner can get the piece of equipment they specifically want and probably not at a premium.

Including the owner’s operational staff in equipment selection decisions for input on previous experiences and operational problems or concerns will go a long way to forming a successful partnership under design/build.

 

David M. Ervin, DBIA

Vice President, MEB

March 2021

How NOT to Approach Design/Build

I received a call recently from a colleague who owns a successful A/E firm in a nearby state.  Since most of his firm’s work is for municipal government clients, the predominant delivery method has been traditional Design-Bid-Build.  His clients are migrating more into the Design/Build delivery method, and he is looking to enter that arena.  “I was going to reach out to one of our competitive-bid contractors,” he said, “They don’t charge a lot on change orders, they generally build in accordance with our plans and specs, and their punch lists are usually short.  I’m sure they would be a good partner to join on a  Design-Build project.”

Maybe not!

 

If you are new to the Design-Build delivery method, choose your partners carefully.  While good D-B-B contractors have talented estimators, they may not have experienced preconstruction managers that understand the nuances of D/B delivery.  Here are some tips for entering Design/Build if you do not have familiarity:

  • Start small.  Find a project type in which you have a lot of expertise, and a client that is open to creative project delivery.  Don’t go after the $50 M project at s a first project – start with one where you can get comfortable with your D/B partners, learn the aspects of delivery and not lose your shirt if the project does not go well.

  • Reach out to contractors who have D/B experience.  Even if you are new to Design/Build delivery, we have all worked with contractors on negotiated or Construction Management-at-Risk contracts.  These contractors understand the preconstruction process – how to work with owners, architects and engineers during the design and construction documents phases to get the best results for the client.

  • Find partners that have a similar value system to your own.  Does the contractor work in an environment of trust, respect, and confidence in the entire team? Does your staff have equal respect for the contractor’s team and what they bring to the D/B process? Cooperation is vital to a successful D/B project.

  • Don’t go it alone.  Find colleagues in the A/E/C industry that have had success with Design/Build projects. Join a team in a support role where you can share your specific expertise, but not necessarily take on the entire design risk (and reward) for the project.  When joining a well-organized D/B team that has delivered successful projects, be a sponge – soak up everything you can about the process.

  • Assign senior staff members to the project.  The biggest mistake I see a lot of firms make in Design/Build is to start the project off with inexperienced teams.  D/B pursuits are often at the team members’ risk, so you support them with your less expensive staff, saving the senior staff for the clients that are paying, right?  This approach is the best way to get upside down quickly.  The decisions that are made made during the first 10% of the project are the most critical – and the riskiest.  They must be made by experienced team members, who can quickly evaluate high-level design options and their impact on cost/schedule/constructability.

  • Read DBIA literature and utilize DBIA agreements.  The DBIA understands Design/Build, and the contract templates responds more to the industry – owners, contractors, and designers – than other association templates.  Take advantage of the experience that other A/E/C colleagues have instilled in these documents.

  • No-ego environment. Put the ego aside.  This is an extremely  very collaborative process with one goal in mind – the best project that meets the client’s needs. If you always need to drive the process, control communications with your client, and protect the owner from the contractor, Design/Build is probably not for you.

While the Design-Bid-Build construction procurement delivery will not go away,  the construction industry continues to evolve toward more creative and collaborative delivery methods.   My firm has been delivering CM at Risk and Design-Build projects for over 25 years and have has found the collaboration and creativity of the teaming to be very rewarding, and a great business decision.

 

Thomas G. Tingle, AIA

President, GuernseyTingle