The conventional approach to deliver projects is the design-bid-build (DBB) method where a designer prepares the project documents and contractors submit bids for constructing the project. The low bidder gets the job, builds it and the owner operates it. Frustrated with dealing with low bidders, cost creep and schedule delays, some owners have turned to alternative project delivery methods including:
- Design build (DB) where one party designs and builds the project for a guaranteed price. Competitive designs often lead to projects that are innovative and cost effective. The owner is not forced to take the low bid but instead can select the best value proposal.
- Design build operate (DBO) where the design builder also operates the project for a guaranteed annual cost subject only to adjustment for inflation. Usually the period of operation is 15-20 years.
- Design build operate finance (DBOF) where project financing is also provided by the design builder.
- Progressive design build (PDB). The design-builder is selected on qualifications. The initial contract is to develop design to 60-75% completion. At that point a guaranteed maximum price (GMP) is negotiated. If agreement can’t be reached, the project can be completed by reverting to the conventional DBB method.
- Construction Manager at Risk (CMAR) where the owner hires a designer and a construction manager/general contractor. The construction manager works with the designer as a team. A GMP is developed at about 60% completion of design.
There are eight key questions to answer before deciding whether or not to even begin evaluating alternative delivery methods
- Do local laws allow it? Laws vary from State to State.
- Is the project really a good candidate? DB and DBO are best suited for new projects or discrete stand-alone parts of an existing facility.
- Is there a need to complete project more quickly than can be done with conventional DBB?
- Is there a willingness to give up some control of project details?
- Is there a willingness to develop new contract documents?
- Are the regulatory agencies willing to modify their project review procedures?
- Is project financing firm?
- Is there the will to make the contract award on other than low price? You can consider quality and select the proposal that delivers the best overall value if you can get over the mind set of going with the lowest cost.
If the answers to the questions are positive, assemble a team that includes those familiar with all aspects of the project and includes experts that have experience with a range of delivery methods. They can work together to assemble project information that will affect the choice of a delivery method. This information can then serve as input to a workshop involving the team and a facilitator experienced in the delivery methods to complete an evaluation matrix. A matrix like the one below can be constructed in which each of the delivery methods is scored using a numeric scale such as 1-10 for each evaluation criterion. Each criterion can also be given a weighting factor of 1-10 to reflect the relative importance for the specific project under consideration. The resulting weighted scores for the delivery methods can then be considered in making the final selection of the best-fit project delivery method for your project.