Last week, we discussed the 5 key issues Owners should consider before beginning a Design-Build project. What if an Owner decides Design-Build is not right for the project? While Design-Build has gained some popularity, it is often not the right method for most projects. It requires an experienced Owner, who is not afraid to keep close tabs on their project. For most projects, we recommend some version of the traditional project delivery method, Design-Bid-Build.
In the traditional project delivery system, the Owner contracts separately with the Design Firm that produces the construction documents, and the Builder. The process is based on the sequential process of design, construction documents, bidding, and construction.
The word “bid” may be daunting, and maybe you think it is too formal for your project. You would be partly right; an open, public bid is too complex for what many projects require. Bids can be organized publicly (open), or they can be invited (select), in which the contractors are pre-selected to bid on the Contract Documents produced by the Design Professional. The difference between a select bid and a Design-Build project, is that the Contractor of a Design-Build project is chosen before the Contract Documents are produced. Depending on the complexity of your construction, you may not be able to determine the best, and most economical, Builder for your project until you have ironed out the details of the drawings and specifications.
In a traditional contract, the Architect’s role is often as arbitrator of disputes between the Owner and Contractor. Unlike the Design-Build method, the Architect in this type of contract is the Owner’s representative and is looking out for the Owner’s best interests. The Architect will review the progress of the work, change orders, and other documentation in order to assess the Builder/Contractor’s work and report back to the Owner.
In the traditional DBB arrangement, the Owner warrants to the Builder that the construction documents are complete and free from error, thereby assuming the risk. Although, while the Owner holds the risk in this type of contract, the Architect’s role is to ensure the project is built according to the documents. Therefore, the Owner is generally not responsible for negotiating change orders with the Contractor.
While publicly bid projects may require the Owner to accept the lowest qualified bidder, generally the Owner may select a Builder based on qualifications, experience and cost. The Builder/Contractor is permitted to subcontract any parts of construction that he/she feels necessary.
A significant advantage of Design-Bid-Build is that it is the industry accepted standard, and has been for a long time, so the roles and phases have been clearly defined and all parties should understand their individual responsibilities. Frequently, we come across both designers and builders who are unfamiliar with the Design-Build process, and responsibilities are unclear. No one wants to begin haggling about project responsibilities halfway through a building project.
- Budget Management: It is the design team’s responsibility to offer an estimate of construction costs, in order to produce a design within the Owner’s budget. Failure to stay current with costs, or potential cost increases during the design phase, may cause project delays or may make it necessary to revise the construction documents. On the other hand, bidding a project invites competition among qualified Builders, and offers the Owner a range of potential options.
- Communication: Since the Builder/Contractor was brought into the project once the construction documents were completed, there is little opportunity for collaboration on alternate designs and materials. The Owner is unable to take advantage of the Builder’s input on the design during the design phase, leading to potential delays or cost increases.
- Quality Control: when projects are bid, there is a tendency to choose the lowest bidder. This has the potential to bring an unqualified contractor into the project, who under-bid the project in hopes of winning the contract. On the other hand, since all Builders are basing their price on the same construction documents, the price the builder bid is the price they are held to.
- Accountability: In a Design-Bid-Build project, the Design team is working directly for the Owner, so the Owner can trust the expert opinion of the Architect’s judgment.
- Scheduling: Since the construction documents cannot be bid until they are 100% complete, the Design-Bid-Build method will usually extend the total project time.
The traditional Design-Bid-Build method is best suited for projects that are budget sensitive, but not extremely schedule sensitive. While the schedule can be set and maintained at the beginning of the project, the project has the potential to take longer than other methods. The Owner can have as much, or as little, control over the design as they would like, unlike in Design-Build, where the design is driven mainly by the Builder.
Next week we will discuss Construction Management, a blend of Design-Build and Design-Bid-Build, with some new elements we will introduce. If you would like to know more about a particular Project Delivery Method, feel free to email us.What is your experience with Design-Bid-Build projects? Let us know!
(The featured photo is a design-bid-build project of a Church of Jesus Christ of Latter-Day Saints in Corning, New York).