June 2018 — The development of a project team is critical to the success of any project. In the building industry, owners and developers have several methods available for creating a project team. The traditional methods have given way to more creative or hybrid methods of project delivery. These hybrid methods have provided bridging mechanisms to manage the time, budget, and resource constraints of a project.
Project Delivery Methods
There are four primary project delivery methods used, each having benefits and limitations. When analyzing a specific project, each method should be evaluated in order to select the most appropriate. The intent of the project and its goals regarding schedule, costs, quality, and safety will help determine which method is the correct one.
Design-Bid-Build Approach
Under this traditional method, an architectural firm is hired and serves as the owner’s agent. Although the firm may have numerous responsibilities, including the selection of consultants, its primary responsibility is providing and managing the design and construction documents for the project. As the design progresses, the architectural firm and external cost estimators periodically prepare cost estimates. Once the construction documents and specifications are completely finished, and other requirements of the owner have been met, the project is bid and subsequently awarded to the general contractor with the lowest responsible bid.
Some architectural firms have an in-house team that may include engineers, interior designers, planners, and landscape architects. If not, the architect hires independent architects and engineers to provide the specialized design services needed to complete the design phase. The architect advises the owner when determining the owner’s space and building needs, administers the contract, and monitors the progress of construction.
This design-bid-build approach achieves the owner’s goals with reasonable speed and costs. However, the larger sizes and increasing carrying costs of today’s building projects have inspired the creation of project management organizations that can complete the project more quickly with lower costs.
Design-Build Approach
Design-build is a method of project delivery in which one entity, a design-build contractor, enters into a single contract with an owner to provide architectural and engineering design and construction services. This method may be architect-led, contractor-led, integrated (where the design-build firm has both in-house design and construction capabilities), or proprietary (where an owner may select from pre-engineered structures).
Design-build is also known as design-construct and single-source responsibility. This method is unlike the traditional design-bid-build method, which uses separate contracts for the design and construction phases of the project. Under design-build, rather than hiring an architect, the owner enters into a contract with a single firm with design and building capabilities or a construction entity that employs the architect as a consultant.
As with the design-bid-build approach, a guaranteed maximum price for the entire project is provided; construction management techniques to overlap design and construction phases are used; and the overall project delivery is expedited. Today, approximately 50 percent of all commercial projects are developed using the design-build approach.
Early in the relationship between the owner and the design-build contractor, the scope and price of the project are set. The design-build contractor may have some in-house design capability, such as basic architectural design and mechanical and electrical engineering, or may subcontract for some of the design services or the construction activities. The design-build contractor is a true project manager with the responsibility for taking the building from concept to occupancy. The contractor is obligated to produce a finished building for a firm price, but saving money for the owner is not a priority.
Design-build combines the design and construction of a project into one contract. The benefits of the combination include encouraging collaboration between the design team and construction team to develop innovative techniques to build the project, as well as sharing knowledge about both constructability and the level of detail required to exceed the owner’s requirements.
The time savings in design-build projects are realized by eliminating the lead time necessary to contract a designer and then accepting bids from contractors to build the design. Projects move from design to construction much faster through the use of the single design-build contract.
Construction Management-at-Risk Approach
Construction management-at-risk (CMAR) is a method of project delivery in which an owner contracts separately with a designer and a contractor. The owner contracts with a design company to provide facility design. The owner also selects a contractor to perform construction management services and construction work, according to plans and specifications.
In this approach, integrated efforts provide value-added expertise because the contractor usually has significant input in the design process. The contractor generally guarantees a maximum construction price.
Although similar to the design-bid-build method, there are the three key differences.
- A construction manager is hired to manage the construction process, including the selection of subcontractors.
- Through coordination between the architect and construction manager, the design and construction phases can be overlapped, thereby expediting the delivery process.
- The construction manager, who is responsible for quality control, scheduling, and the estimate of construction costs, provides a guaranteed maximum price for the project.
Unlike the design-bid-build approach, construction management administers the process on behalf of the owner, keeping the owner’s best interests in mind. In the design-bid-build approach, the architect assists the owner in ensuring that the contractor’s work conforms to the contract and its drawings and specifications. Often, however, the owner lacks the time, expertise, and objectivity to effectively coordinate all the activities related to construction. The owner, whether an individual or an organization, needs representation by a technically qualified manager who can coordinate all the construction activities from building concept and design to occupancy and completion of the final punch list.
The different interests of the owner, design professional, and contractor can lead to conflict. The owner wants the best finished product for the least amount of money. The design professional wants the best design while earning a profitable fee. The contractor wants to meet the drawings and specifications at the highest profit. Thus, the goal of producing a quality building is tempered by each party’s financial motivation. The construction manager is hired by the owner to promote a team effort and manage the two separate activities of a building project—design and construction.
Multiple Prime Contracts Approach
The multiple prime contracts approach, also known as professional project management, is a method of project delivery in which an owner divides a project into two or more parts and then enters into a separate contract for each part. Multiple prime contracts are often used for large or complex construction projects that require phases and multiple bid packages. A bid package is prepared for each significant, definable phase. The owner (often a public entity) contracts with design and construction organizations, and often a construction manager, for each of these phases.
Under the multiple prime contracts approach, the project administrator manages the total project, coordinating the design, contracting, scheduling, and funding of each subproject to get the job completed on time and on budget. This is often called fast-track construction. Major highway construction with subprojects like bridges, interchanges, and other components is a contemporary example. Multiple structure and mixed-use projects are other examples. In addition to their immense structural challenges, these projects often present unique financial demands and legal complexities.
This article is adapted from BOMI International’s The Design, Operation, and Maintenance of Building Systems, Part I course, part of the RPA and FMA designation programs. More information regarding this course or BOMI International’s new High-Performance Sustainable Buildings credential (BOMI-HP™) is available by calling 1-800-235-2664. Visit BOMI International’s website, www.bomi.org.