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Building Owners can often improve the results they get from the design and construction process if they reconsider their project delivery choices.  The three most common delivery methods are:

• Design-Bid-Build
• Construction Management
• Design/Build

Design-Bid-Build

This is the simple, traditional approach. The Design-Bid-Build process starts with the Owner hiring an architect to design the facility. Once the facility is designed, the Owner puts the project “out to bid” to a select list of general contractors. These general contractors estimate the project. They take each component or trade item of work, price it with their own historical cost history, or, in most cases, with subcontractor quotes received for the project. The costs for each trade item of work are added together, and a bid is submitted for the entire project. Typically, the general contractor with the lowest overall price wins the project.

This process has some significant problems:

• Price is uncertain until bids are tallied
• Project cost is dependent on quality and quantity of bids received
• Process has tendency to be adversarial and negatively impact quality
• Project cost often increases due to changes and claims

This approach also has several potential advantages:

• Clearly identifies winning service provider based on lowest responsible bid submitted
• Saves Owner money during design process since general contractor is not involved
• Simplicity makes it suitable for straightforward projects

Design-Bid-Build is most useful for public sector projects and simple, straightforward projects. We seldom recommend this delivery method, because it doesn’t provide the owner with budget, schedule or constructability analysis during the design process. Typically with this method, the owner wants what is expected and deserved, the architect wants the project exactly as designed, and the winning general contractor has to live by its numbers, which may mean shaving and squeezing costs in every possible way.

Construction Management

In a Construction Management approach, the Owner puts together a “Team,” right from the outset. This team is comprised of the Architect/Consulting Engineer(s), Construction Manager and Owner (or his representative). The Owner is more involved in the process from Preconstruction through Construction than under the traditional Design-Bid-Build process. The CM provides preconstruction services such as cost, schedule, value engineering, alternative materials/systems, logistics planning, etc. The control of design and construction should emphasize: 

• Cost: budgets, cost models, design to cost
• Time: milestone and detailed CPM (Critical Path Method) scheduling
• Quality: constructability reviews, overall quality assurance

Despite its advantages, Construction Management can encounter some problems.  These include:

• Architects and engineers may have more disagreements with the contractor, because the contractor has some influence with the owner
• Owners may have less influence selecting sub-contractors
• Owners may worry they are not getting the competitive pricing they would with the design-bid-build process

The advantages to the Owner are numerous, with the most important being:

• Subcontractor bids can be reviewed to determine who is best qualified rather than who has the best price
• Construction Manager can develop alternative cost considerations, through value engineering, if overall estimated cost is negatively impacting the Owner’s budget constraints
• Putting entire Team together before design phase begins allows everyone to participate early in process, understand expectations and constraints, and support design goals
• “Open book” philosophy makes project costs transparent and increases Owner’s confidence in the integrity of the process

The Construction Manager generally works under a Guaranteed Maximum Price (GMP) and is compensated for the cost of the work, plus an agreed upon fee based on the project scope, complexity and duration. In essence, the Construction Manager acts as an extension of the Owner’s staff, eliminating the maximize profit/minimize risk motives inherent in the Design-Bid-Build process.

C. E. Floyd often recommends the Construction Management approach because it protects the client’s interests at all stages of a project’s development. It also ensures that cost, time and quality are effectively managed on the client’s behalf. This delivery method gives the Owner detailed information to make the best-informed decisions for their projects.

Design/Build

Design/Build is a project delivery method in which the design and construction services are contracted by a single entity known as the Design-Builder (in most cases a Contractor). In contrast to the traditional Design-Bid-Build approach, Owner’s minimize their risk by placing responsibility on the Design-builder to provide innovative, complete and functional systems.

C.E. Floyd generally retains the services of an Architect for Civil/Landscaping, Architectural and Structural designs and selects design-build Subcontractors for Plumbing, HVAC, Fire Protection and Electrical designs. A member of the Owner’s staff should be included to participate in the design process to insure that the Owner receives a complete and functional facility, including all program components.

Potential disadvantages of Design/Build are:

• Less Owner control of the process because they’re relying on a sole entity to do the work
• Lower quality if the owner doesn’t participate actively in the process
• Loss of checks and balances to make sure that quality and scope are achieved
• Less competitive bids due to the design/build selection of subcontractors

Design/Build’s advantages are:

• Single point of contact and responsibility for both design and construction
• Faster schedule delivery because the design and construction phases overlap 
• Early identification of guaranteed costs
• Reduction in design fees
• Decreased risk for Owner since design/build team is responsible for errors and omissions during design

C.E. Floyd Company values the opportunity in design/build to control all design disciplines to ensure the owner’s program and budget constraints are achieved. While the process gives us (the contractor) greater risk, we enjoy the challenges and creativity the design/build process delivers.

So What’s Right For My Project?

Before selecting a specific project delivery method, Owners must first understand the goals, priorities and risks for their project, such as schedule, budget, quality, etc. Ultimately, the Owner should select a Contractor with a solid portfolio of similar projects, experience resolving anticipated challenges, and references who speak volumes about the contractor’s capabilities. The Owner must then have trust and confidence that their selection will deliver the type of quality project within their schedule and budget constraints.

Contact us to learn more about how we can help you with your next construction project.