Ensuring Design-Build Success
While design-build is just one portion of an owner’s delivery methods, when done right, it is a proven and efficient way to deliver the end product—saving both time and money for the owner.
By Mike Magahey, P.E., M.SAME
Maintenance Hangar - Fort Smith, Ark. PHOTOS COURTESY POND & COMPANY
The Design-Build Institute of America reported that in 2014, more than half of construction projects over $10 million were design-build. Of that $10 million, military projects had the highest market share at 81 percent of projects delivered utilizing the design-build methodology. That is a staggering number. Staggering, but still comparable to Pond & Company’s U.S. Army Corps of Engineers (USACE) program last year where 75 percent of our revenue was generated by design-build projects. In the last two years, our USACE program was awarded several design-build projects with design fees over $1 million each.
While design-build is just one portion of an owner’s delivery methods, when done right, it is a proven and efficient way to deliver the end product—saving both time and money for the owner. Recent trends though have indicated the federal government’s intention to move back towards the historical standard of using design-build for 60 percent to 70 percent of all projects over $10 million. As military client’s see their funding reduced for larger military construction (MILCON) projects, they have increased funding for sustainment, restoration, and modernization projects, which are more maintenance specific. While these projects are smaller and more complex from the engineering side, it is important that both the contractor and designer coordinate and function as a unified team. These smaller projects tend to have less overall direction compared to the well-defined MILCON projects.
MILCON clients either prefer the design-build execution option, or they don’t—and the feelings can be strong either way. This can be attributed to current market conditions and the simple fact that not all projects are a fit for this type of execution. With continued tightening of the federal budget over the last few years and political issues, such as sequestration affecting the timing of project funding, smaller projects have gone the design-build route as a function of a limited time frame to execute the project.
There are a number of important prerequisites that can lead to building a successful design-build project team and, ultimately, a well-executed project.
Know Your Partner. The design-build relationship can be filled with friction. Design-build projects are a slippery slope of risk-reward for the team; but understand while the goal is the same, the risks are not. You must know your scope, your role, your liability and, most importantly, your partner. There are numerous contractors in the federal arena that execute design-build successfully. Not all partners though are a good fit for the design firm and vice versa. Before entering into a design-build contract, it is imperative that you properly vet your partner. Conduct your own research. Check the company’s financials. Perform an online search and ask around the industry, including your contacts and other people in similar positions. Most importantly, have a dialogue with your potential partner to discuss key items of the pursuit, including contract format and typical design fees. The more you can get out in the open and talk through with a potential partner, the stronger the relationship will be if issues are encountered as the project evolves.
The design team needs to insist on a thorough review from their contracting partner. If there are not thorough contractor reviews—and an unnecessary or unplanned feature gets on the design documents—the team runs the risk of buying that item as part of the project.
It is essential that the design-build contractor, the project manager and their collective key team members be involved in the design process. This seems basic, but the contractor team should provide a detailed review of every design submittal prior to client submittals. The design team needs to insist on a thorough review from their contracting partner. If there are not thorough contractor reviews—and an unnecessary or unplanned feature gets on the design documents—the team runs the risk of buying that item as part of the project. I have found that having the design-build contractor involved in weekly design meetings helps mitigate the potential for additional costs on a project.
A properly vetted and executed design-build project can improve schedule performance, and result in a more efficient operation for the federal project managers, by simplifying contractual relationship to one entity. Additionally, the project delivery approach results in better communication as the executing agency deals directly with the contractor on all issues, including design.
Design-build has found success and is a very effective project delivery method with the right team—but even still, it remains an ever-evolving process that can always be improved.