Project Delivery Methods
To insure maximum efficiency to all elements involved in any construction project, it is important to bring organization and structure together, in the planning, design, estimating and project management for any project.
Each project has a delivery method that is optimum for its unique environment and the business conditions in which it must be delivered. Owners and project managers must carefully analyze those conditions before selecting the specific method by which each project is to be delivered. Not doing so is the single largest problem in today’s construction and real estate industry.
Since the early 1980’s, Owners and developers of construction projects have been putting greater pressure on the Architecture & Engineering/Construction community to increase quality, decrease cost, and more importantly compress the period it takes from concept to completion. As a result, Owners and the industry have experimented with various forms of project delivery methods. Perhaps the most challenging concept to develop at the start of a project, is exactly what does the Owner require and what is the true definition of the project delivery method that was ostensibly been selected. As a result, the industry needs a set of standard definitions for project delivery as a basis for communicating the technical requirements for bringing a new project from the Owner’s concept to operation.
Project Delivery Methods
The Construction Industry Institute maintains that there are really only three fundamental project delivery methods: Design/Bid/Build, Design/Build, and Construction Management.
The different methods are distinguished by the way the contracts between the Owner, the Architect, and the Contractor (or builder) are formed and the technical relationships that evolve between each party inside those contracts. The definitions and a brief explanation is included herein. (For a more detailed review of these methods along with a graphic displaying the contractual relationships, please click here after reviewing the following.)
1. Design/Bid/Build (DBB)
This is the traditional project delivery method in which an Owner retains an Architect to furnish complete design services and then advertises and awards the separate construction contract based on the Architect’s full construction contract documents. The Owner is responsible for the details of design and liable to the construction Contractor for the quality of the Construction Contract Documents.
DBB projects can also be awarded on a negotiated basis and a best value basis. In both cases, the probability that the project will be awarded to a Contractor who has submitted a mistakenly low bid is reduced. Additionally, the motivation of the Contractor in both cases is to complete the project in a manner that will get it invited back to do the next negotiated contract. Regardless of the award method, DBB is distinguished by no Contractor input during the design phase. Thus, the Owner must rely on the Architect’s team alone for constructability review, if there is any at all.
2. Construction Management (CM)
CM typically comes in two variations: Construction Manager Agency and Construction Manager at Risk.
Construction Manager Agency (CMA)
CMA is a method whereby the Owner retains the CM at the same time as the Architect and receives continuous technical services throughout the life of the project. The CMA does not assume liability for the actual construction. Thus, this method is very similar to DBB with an additional technical professional furnishing the Owner construction management services only.
Construction Manager-at-Risk (CMR)
Construction Manager-at-Risk (CMR) projects are characterized by a contract between an Owner and a construction manager (CM). in which, the Owner authorizes the CM to handle all the details of a project’s life cycle. The idea of CMR is to furnish professional management of all phases of a project’s life to an Owner whose organization may not have those capabilities. Typically, CMR contracts contain a provision in which the CMR stipulates to a guaranteed maximum price (GMP) above which the Owner is not liable for payment. Often these contracts include incentive clauses in which the CMR and Owner split any cost savings realized below the GMP. CMR contracts can contain provisions for the CMR to handle some aspects of design, but most commonly, the Owner retains the traditional responsibility by keeping a separate design contract and furnishing the CMR with a full set of plans and specifications on which all construction contracts are based.
3. Design-Build (DB)
Design/Build (DB) is a project delivery method in which the Owner procures both design and construction services in the same contract from a single, legal entity referred to as the Design/Builder. The method uses Request for Qualifications (RFQ)/Request for Proposal (RFP) procedures rather than the DBB Invitation for Bids (IFB) procedures. There are a number of variations on the DB process, but all involve three major components.
The Owner develops (with or without the aid of a professional) an RFQ/RFP that describes essential project requirements in performance terms. Next is the evaluation of those offering proposals, and finally, with evaluation complete, the Owner must engage in a contract award for both design and construction services. The DB entity is liable for all design and construction costs and normally, must provide a firm, fixed price and delivery schedule in its proposal, generally from schematic phase designs; sometimes prior to designs.
From the Owner’s standpoint the project’s chain of responsibility has been considerably simplified. Again, the Contractor has early constructability input to the design process. The Design/Builder literally controls this project delivery process. As a result, DB is the delivery method which has the greatest ability to compress the project delivery period and as a result is often used for “Fast-Track” projects.
This is a term that encompasses a detailed review of drawings, specifications and construction processes before a project is put out for bids. The benefits of constructability are reduced costs, improved quality, enhanced safety and better risk control.
This term covers all parties in a design, construction contract that will be mutually beneficial. It can also be called a synergistic relationship, maximizing the effectiveness of each participant’s resources.
Summary – click for more detail
Each project has its own unique delivery requirements and one of the three methods will be MOST appropriate for each individual project. The path to successful project delivery must start by selecting the best delivery method for the given project and then by applying the principles of constructability and partnering, completing that project in a highly professional manner.
Barretta & Associates professionals will assist you in understanding your needs, explaining in more detail the options available to you, outline the pros and cons of each method and selecting the most appropriate method of delivery for your specific project. There is a MOST appropriate method for your project. Do not allow selection by default!