Selecting the right delivery method

Project Delivery Methodologies

?There are a multitude of delivery methodologies available to owners.?Selecting the right approach, along with the team and process, are critical to the project’s success.?Options for project delivery include traditional design-bid-build, CM at-Risk, design-build, or design-builder are the most common.?Picking the right approach requires understanding the pros and cons of each.

The first thing we’ll discuss is the project team needed for accomplishment of a project.?This is necessary to understand since each delivery methodology has its unique manner by which team members are contracted.?Depending on the project type and complexity, team members on the design professional side can include civil, landscape, structural, architectural, interiors, MEP/FP, and/or specialty consultants.?Specialty consultants could include lab, kitchen, automation, and/or cultivation system designers.?The project could include an owner’s representative (sometimes called a project manager or program manager).?Other professional services that aren’t design related include site survey (topographic or ALTA), geotechnical, and environmental.?On the construction side, the project could have a general contractor and/or a construction manager.?The owner can contract with each of the above entities in a variety of manners, as discussed below.

Now that we’re armed with information, let’s dig into the delivery methods.

Design-Bid-Build

This is the traditional approach to project delivery.?Under this approach the owner hires an architect for professional services.?The architect, and/or the owner, retains other professional services team members.?The design team then works collaboratively with the owner in development of the construction documents.?The documents are normally developed in multiple stages including schematics, design development, and construction documents.?The construction documents include drawings and specifications.?At each submittal stage the architect provides an architectural cost opinion and advises the owner on the anticipated construction cost.?Once the construction documents are completed the project is bid to general contractors.?The owner can limit the contractors to a select group of pre-qualified firms or advertise the project for bidding by any contractor.?In a design-bid-build approach the low-bid contractor is typically awarded the project.?The process can be modified to include performance criteria for evaluation as part of the bid process.

Pros:

• Lowest initial assumed cost of construction

Cons:

• Multiple points of contact and responsibility based on a multi-contract approach.?The minimum number of contracts would be two, one with the architect and another with the general contractor.
• Higher number of change orders than a teamed approach with pre-construction services.?Change orders can lead to project costs exceeding budgets.
• Limited pre-qualification of general contractors.
• No pre-qualification of subcontractors. Limited to no visibility of sub bids.
• Post-bid value engineering averages fifty cents on the dollar.
• No early release packages for fast-tracking.

The following delivery methodologies each represent team approaches.?Under a team approach to project delivery the construction manager (CM) and/or general contractor (GC) is part of the team in the early stages of design.?Utilizing a team delivery allows for pre-construction services of the CM and/or GC.?These services include the development of schedules, construction cost opinions, value-engineering and value analysis, and constructability reviews at each design submittal stage.?This information can be utilized to accelerate the schedule using fast-tracking.?Fast-tracking focuses document delivery on packages aimed at accelerating the project schedule.?These drawing packages can include equipment, sitework, foundations, under-slab, and the building shell.?Even without these component packages, the use of a team approach will shorten the project schedule.?This is because of the timelines that make up ?the design-bid-build methodology as related to document completion and bidding.

CM at-Risk

The CM at-Risk delivery is most like the traditional design-bid-build as related to contracts.?The owner will hold a minimum of two contracts: one with the architect and the other with the construction manager.?The design is developed in much the same way as design-bid-build.?However, as noted above, the inclusion of pre-construction services from the construction manager (CM) allows for detailed analysis of the design at each submittal stage.?Generally, at 85% Construction Documents the CM provides a guaranteed maximum price (GMP) for project development.?At this stage, the GMP includes a design and construction contingency.?When the design reaches final Construction Documents (CDs) the GMP is modified, and the design contingency removed.?At this point the GMP should remain the same or lower.?The only reason a GMP would increase is based on owner requested changes between 85% and final CDs.

As noted above, utilizing a team delivery provides the opportunity to accelerate the schedule.?Bidding at 85% CDs shaves 30-days off the traditional design-bid-build (D-B-B) approach.?If value engineering is required, it can be completed during development of final CDs.?With D-B-B, value engineering happens after the bid and requires the design team to issue a value engineering addendum.

With this methodology, the CM can also be the general contractor thereby a CM/GC.?Another form of CM delivery is CM as an advisor.?The process is much the same however, the CM and GC are different entities and thereby add another layer of responsibility.

Pros:

• Cost of construction established during design.?Updated at each submittal stage.
• Low number of change orders due to pre-construction services.
• Higher opportunity for success related to schedule, cost control, and quality based on,
• CM selected based on an RFQ/P process.?Thereby, qualifications and fees are both considered.
• Subcontractors are prequalified by the CM prior to bidding.?The owner can also have input on subcontractors.
• Value engineering is bid and thereby provides full value.
• Early release packages allow for accelerated schedules.

Cons:

• Multiple points of contact and responsibility based on a multi-contract approach.?The minimum number of contracts would be two, one with the architect and another with the CM.
• Higher initial cost to cover construction contingency.
• Possibility of higher initial cost due to use of qualified and limited subcontractor base.
• Process is built on trust.?If trust is violated the integrity of the process will become questionable.?

Design-Build

Under a design-build (D-B) agreement the owner will hold one contract.?The typical structure is an owner-general contractor agreement for design-build services.?Utilizing this approach, the general contractor (GC) retains and controls the architect.?From an architect’s perspective, this isn’t what I consider the optimal approach.?I believe architects are far better suited to help clients develop their vision.?This is because architects are trained to deliver exactly that, a client vision.?In many D-B arrangements the general contractor will keep the architect at arm’s length from the client.?This allows the contractor to control the design, and thereby cost.?However, it limits the owner’s ability to effectively evaluate value engineering along with systems and equipment proposed by the contractor.

Since design-build is a team delivery the process includes pre-construction services.?The advantages of these services have been discussed previously.??As with CM at-Risk, at 85% Construction Documents the GC provides a guaranteed maximum price (GMP) or construction cost (if using cost plus) for project development.?As with CM at-Risk, the GMP/construction cost includes a design and construction contingency.?When the design reaches final Construction Documents the GMP/construction cost is modified, and the design contingency removed.?

The same schedule benefits apply to design-build as with CM at-Risk.

Pros:

• Singular point of responsibility.
• Cost of construction established during design. Updated at each submittal stage.
• Low number of change orders due to pre-construction services.?The only change orders presented should be owner requested modifications and/or unforeseen conditions.
• Higher opportunity for success related to schedule, cost control, and quality based on,
• GC selected.?Thereby, qualifications and fees are both considered.
• Subcontractors are prequalified by the GC prior to bidding.?The owner can also have input on subcontractors.
• Value engineering is bid and thereby provides full value.
• Early release packages allow for accelerated schedules.

Cons:

• Contractor controlled design / vision adherence.
• Contractor controlled adherence to cost with minimal checks and balances.
• No requirement for the number of bids by trade packages.
• Possibility of higher initial cost due to use of qualified and limited subcontractor base.
• Process is built on trust.?If trust is violated the integrity of the process will become questionable.?

Design-Builder

Under a design-builder agreement the owner will hold one contract.?The structure is an owner-design-builder agreement for full services.?Utilizing this approach, the design-builder retains and controls the architect and general contractor.?The structure of the agreement is such that the architect and contractor work collaboratively with the owner and design-builder in development of the project.

Since design-build is a team delivery the process includes pre-construction services.?The advantages of these services have been discussed previously.??As with other team deliveries, at 85% Construction Documents the design-builder provides a guaranteed maximum price (GMP) or construction cost (if using cost plus) for project development.?As with the other team deliveries, the GMP/construction cost includes a design and construction contingency.?When the design reaches final Construction Documents the GMP/construction cost is modified, and the design contingency removed.?

The same schedule benefits apply to the design-builder delivery as with other team approaches.

Pros:

• Singular point of responsibility.
• Architect leads design working collaboratively with the owner and design-builder.
• Cost of construction established during design.?Updated at each submittal stage.
• Low number of change orders due to pre-construction services.?The only change orders presented should be owner requested modifications and/or unforeseen conditions.
• Higher opportunity for success related to schedule, cost control, and quality based on,
• Design-builder selected.?Thereby, qualifications and fees are both considered.
• Subcontractors are prequalified by the design-builder prior to bidding.?The owner can also have input on subcontractors.
• Minimum number of trade packages can be stipulated in the prime agreement.
• Value engineering is bid and thereby provides full value.
• Early release packages allow for accelerated schedules.

Cons:

• Possibility of higher initial cost due to use of qualified and limited subcontractor base.
• Process is built on trust.?If trust is violated the integrity of the process will become questionable.?

urban-gro’s (UG) Design-Builder delivery

UG offers clients delivery of projects utilizing the design-builder methodology.?Our design-builder approach includes integration of our in-house services covering architecture, interior design, mechanical, electrical, plumbing, fire protection, lab, integrated cultivation design (for CEA projects), equipment, pre-construction, and construction.?We are the only true turnkey provider of in-house services for the CEA industry.?Our team has completed turnkey project in the CEA, retail, medical, industrial, and ecclesiastical industries on a national scale.??