Is the Design-Build Process Good From the Owner’s Perspective?

Design-build (DB) contracts have become more popular in governmental, commercial, and institutional fields of construction. This has been heavily promoted by the construction industry to property developers as a more cost-efficient means of constructing a project. The workflows for the Conventional and Design-Build project development are illustrated in Figure 1.

FIGURE 1 WORKFLOWS FOR THE CONVENTIONAL AND DESIGN-BUILD PROJECT DEVELOPMENT

The apparent main advantages of Design-Build over conventional owner-designer-constructor projects are:
  • Owner has a one-stop shop
  • Project is more cost efficiently designed
  • Project is more efficiently managed between all disciplines
  • Project costs are more controlled
These points are discusssed below.An advantage to Design-Build projects for the Owner is that it is a one-stop shop. After the prebid design is complete and the contract has been awarded, the project development is under one roof, or one contract holder. Although the Owner will still establish the goals and scope of the project, the contract holder then is responsible for all the project administration and any related liabilities. Under DB, the owner hires a team. Therefore, the Owner’s need to provide the necessary management is reduced. However, the Owner must select the DB team based on overall qualifications and project price. Conventional project development, however, allows for designer continuity and more flexibility of the individual selection of designer and contractor of the Owner’s choice who may be better fitted for the project. For Design-Build, the selection of the designer is typically made by the contractor.Design-Build concept allows the designer and contractor to work on cost-efficient solutions. A DB project allows for construction input from an invested contractor during the design phase of the project. However, when conventional means are utilized, the Owner should encourage and allow the time and costs for its designer to sufficiently explore the associated construction costs with the appropriate contractor(s) to offset this potential advantage.Another potential advantage of DB is that the project will be more efficiently managed between all disciplines This is because it will be under the control of essentially one entity. In reality, however, some actual architectural and engineering work is needed before the DB project can be bid (see Figure 1). This consultant may also be retained by the Owner for oversight, as well as coordination of the prebid design work during the bid and the initial stages of the DB contract. After the DB contract is let, the DB design phase has to be completed with the plans and specifications issued for the construction with the contractor as the administrator and the “consultant” to the designer on constructability issues. Then, the contractor’s main work of construction begins with the designer providing mainly plans and specification clarifications, and inspection support. Given the sequence for project development, a distinct advantage of the use of DB can not be seen over conventional project development process which is simply from designer to the constructor with designer oversight and clarifications during construction (See Figure 1).Another potential advantage to Design-Build is that the project costs are more controlled. In effect, the owner may believe that since it has a DB contract that all the costs are included and thus the cost is fixed. However, because the design used to bid the job is incomplete to conceptual in nature, the scope of work is not sufficiently defined. Moreover, if the Owner refuses to pay for the conceived out-of-the-scope costs, the Owner may not have “a leg to stand on” and could result in dispute resolution proceedings. Prebid design specifications for DB contracts can be vague or misleading in many aspects. Therefore, engineering judgment has to be used for critical aspects of the project by all competitive bidders in preparing their bids for the project. Moreover, there is no standard set in DB Request for Proposal (RFP) that requires that any design needs to be done prior to bid, nor is it practical. It is unreasonable to assume the contractor would have to do the design prior to bid to resolve uncertain design criteria and unknown parameter values. Even within the course of the design process, it is not common to encounter areas of input for the design of the construction which was heretofore not recognized or not needed until at later stages in the project. Therefore, these bids are based on the “Owners” supplied information and reasonable engineering judgment. The presumption here is that DB plans and specficiations are sufficient to bid on.Prebid analyses when using engineering judgment and considering reasonable assumptions based on vague, missing, misleading, or defective design data and criteria in the DB RFP can lead to a fairly wide range of reasonable construction estimates. In conventional project development with plans and specifications issued for construction provided, a more realistic scope is identified and more competitive and less presumptive or “open book” bids for construction result. Any engineer knows that you have to have the proper input data to design something and in turn the appropriate plans and specifications to estimate the construction costs from (see Figure 2).

THE VALIDITY OF THE INPUT DATA AND THE PLANS AND SPECIFICATIONS HAS A DIRECT RELATIONSHIP TO THE CONSTRUCTION COST ESTIMATE

FIGURE 2 PROCESS OF DEVELOPING CONSTRUCTION COST ESTIMATES

 Therefore, the bids obtained from conventional means minimize the risk of the number and magnitude of design changes after the bid. If, however, DB is the direction the project is going to go, where do you draw the line in the effort made in the prebid design?CONCLUSION: For more complex and expensive construction projects there does not seem to be a distinct advantage for Design-Build over conventionally built projects unless the reduction of the contract project administrative duties is preferred by the Owner. Cost control factors are better managed through conventionally driven projects.Provide your comments below.

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