DESIGN-BUILD:

An Introduction to Design-Build

A Classical Notion of Single Source Responsibility:
Design-Build is a process that has been embraced by the world’s Great civilizations. In ancient Mesopotamia, the Code of Hammurabi (1800 BC) fixed absolute accountability upon master builders for both design and construction. In the succeeding millennia, cathedrals and cable-stayed bridges, cloisters and corporate headquarters, have been conceived and constructed using the paradigm of design-build.

Return to the time-honored approach of the Master Builder, where a single source has absolute accountability for both design and construction.

When the citizens of classical Greece envisioned their great temples, public buildings and civil works, master builders were engaged to both design and construct these monumental structures.

Master builders accepted full responsibility for integrating conceptual design with functional performance. To assume anything less than complete accountability for delivering a project was unthinkable.

Throughout each massive logistical undertaking, they commanded skilled craftsmen, procured time-tested materials, and controlled every aspect of the project. A master builder with the chief architect, engineer and builder molded into one.

Enduring structures such as the Parthenon and the Theatre of Dionysus are testimony to an age and a process that are greatly admired, though the process was thought to be virtually abandoned by modern designers and constructors. Today, however, there is a resurgence of the master builder’s approach in the new world.

Informed owners have begun asking practitioners to take more than just an artistic (and more than simply a means and methods) interest in their facilities. Steeped in the work ethic exemplified by the ancient master builders, today’s design-build process offers reassurance that the design and construction industry can delivery comprehensive services. This valued assurance can only be provided by a singular source.

Design-builders want full accountability for architecture, engineering and construction. In fact, like the ancient Greek master builder, they insist on it. By knowledgeably pursuing design quality, and by effectively controlling costs and schedule, a design-builder makes certain that concept-to-completion is more than idle discourse. It is a reality carved in stone.

Design-Build

Design-Bid-Build

What are the Benefits of Design-Build?

The benefits to be gained in establishing a well-designed and -managed Design-Build process include the following:

Singular Responsibility With both design and construction in the hands of a single entity, there is a single point of responsibility for quality, cost and schedule adherence. The design-builder is motivated to deliver a successful project by fulfilling multiple parallel objectives, including aesthetic and functional quality, budget, and schedule for timely completion. With design-build, the owner is able to focus on scope/needs definition and timely decision-making, rather than on coordination between designer and builder.

Quality The singularized responsibility inherent in design-build serves as a motivation for quality and proper project performance. The Owner's requirements and expectations are documented in performance terms and it is the design-build entity's responsibility to produce results accordingly. The Design-Builder warrants to the Owner that it will produce design documents that are complete and free from error. (By contrast, with "traditional" design-bid-build, the Owner warrants to the Contractor that the drawings and specifications are complete and free from error. Because it is the Owner's warranty for the design documents under design-bid-build, the traditional approach relies on restrictive contract language, audit and inspection and occasionally, the legal system, to ensure final project quality.)

Cost Savings Design and construction personnel, working and communicating as a team, evaluate alternative materials and methods efficiently and accurately. Value engineering and constructability are utilized continuously and more effectively when the designers and contractors work as one team during the entire design process.

Time Savings Because design and construction are overlapped, and because bidding periods and redesign are eliminated, total design and construction time can be significantly reduced. Design-build is ideal for the application of "Fast Track" construction techniques. With design-build, materials/equipment procurement and construction work can begin before the construction documents are fully completed. The resulting time savings translates into lower costs and earlier utilization of the completed facility.

Potential for Reduced Administrative Burden During procurement, the potential exists for design-build to reduce the Owner's administrative burden; however, preparing RFPs and conducting evaluations can be resource intensive during the early learning curve. During actual design and construction, the Owner is not required to invest time and money coordinating and arbitrating between separate design and construction contracts, but rather is able to focus on timely decision making.

Early Knowledge of Firm Costs Guaranteed construction costs are known far earlier than in other delivery systems. The entity responsible for design is simultaneously estimating construction costs and can accurately conceptualize the completed project. Staged contracting for design-build services affords the Owner one or more "go, no-go" decision points during design. The decision to proceed with the project is made before substantial design expenditure and with firm knowledge of the final cost.

Improved Risk Management Performance aspects of cost, schedule and quality are clearly defined and responsibilities/ risks are appropriately balanced (individual risks are managed by the party best positioned to manage that risk). Change orders due to "errors and omissions" are virtually eliminated, because the design-builder has responsibility for developing drawings and specifications as well as constructing a fully-functioning facility.

Defining Design-Build Project Delivery

Design-Build is a method of project delivery in which one entity (design-builder) forges a single contract with the Owner to provide for architectural/engineering design services and construction services. (Design-build is also known as design/construct and single source responsibility.)

By contrast, with the "traditional" design-bid-build approach, the Owner commissions an architect or engineer to prepare drawings and specifications under a design contract, and subsequently selects a construction contractor by competitive bidding (or negotiation) to build the facility under a construction contract.

When discussing the merits of project delivery methods, it is important to distinguish between true delivery systems and other contract- related activities, trends and philosophies. For example, design-build, design-bid-build and construction management are the three project delivery systems most commonly employed in North America. Partnering and total quality management (while they can be excellent tools when appropriately applied) are not project delivery systems.

During the past decade, the use of and interest in design-build in the United States has greatly accelerated, making this delivery method one of the most significant trends in the design and construction industry. According to the American Institute of Architects Practice Memo, "Design­-Build is attracting a lot of attention, because owners, including government agencies, are finding it attractive [for] complex and unusual projects, because it ... eliminates some of the major seams in getting a project built."

In its recent study on design-build, the American Society of Civil Engineers maintains that "Design-­build has been used successfully on complex power plant and chemical process facilities and on simple straightforward office buildings and family housing. In fact," claims the ASCE report, "There is no reason that design-build cannot be used on most types of construction projects, including traditional civil infrastructure projects."

AIA, ASCE and others cite a number of reasons why owners and the A/E-construction community are considering design-build. Primary among these are:

• Owner-driven demands for better quality and continuous improvement in project delivery and in the final product;
• Interest in saving time and money, such as through a process wherein constructability is a key concern from the outset;
• Desire to avoid the legal entanglements of adversarial relationships;
• Need to realign the responsibilities and risks on a project, by dividing responsibilities/risks according to the party most capable of managing those risks;
• Response to the restructuring of American business and the increased influence of global markets/foreign competition.

Caveats: What Should the Owner Watch Out For?

Complexity of the Process Design-build project delivery requires careful planning and professional execution to be successful. The Owner should choose a design-build process variation based on factors such as the project's complexity, funding, design intent, responsibility/risk allocation and other important issues. For owners who do not have in-house personnel with expertise in preparing and administering design-build requests for proposals (RFPs) and contracts, an owner's design-build consultant (sometimes called design criteria professionals) may be retained to prepare scope definition and RFP documents, and to provide additional consulting services as needed.

Challenge to Converting Owner Needs to Performance-Based Language Preparing a statement of facility requirements (sometimes called the design criteria package) that is comprehensive enough to assure compliance by the offerors, but avoids overly restrictive requirements or details that would inhibit creative solutions, is the most challenging aspect of preparing a design-build RFP. When facility requirements are stated in performance terms and related to recognized industry standards, the approach not only provides flexibility to the offerors in meeting the desired objectives, but it fixes responsibility upon the design-builder in clearly understood performance terms.

Availability of Design Liability Insurance and/or Performance and Payment Bonds Certain insurance carriers and bond sureties may not be familiar with design-build. This can lead to some hesitation about providing these services on design-build contracts. The parties to a design-build contract need to make sure that adequate coverage exists in both the professional liability and surety arenas.

Who Uses Design-Build?

Design-build is the project delivery system of choice on more than 50 percent of the non-residential construction projects in the European Community and is used on more than 70 percent of the non-residential projects in Japan, according to recent industry publications.

In the United States, the private sector's use of design-build has been increasing in frequency and application during the past thirty years. Design-build is being used in a wide array of commercial and institutional applications including hospitals, educational facilities, office buildings, retail centers and hotels. Design-build has also been used for decades in the industrial and power sectors.

In the U.S. public sector, the federal government, many states and local governments employ design-build contracting for a significant percentage of their building programs. In the seven years from 1986 to 1992, total use of design-build in the public and private sectors grew 172%, from $18 billion to $49 billion (Engineering News-Record 1993 Report).

How is a Design-Build Entity Selected?

The traditional method of selecting a Design-Builder has been direct selection. This technique permits the early involvement of the Design-Build entity with the Owner as critical initial decisions are made and preserves the full range of benefits that design-build can provide.

The public sector and some private owners may be prevented from utilizing direct selection. The methods most commonly utilized by public agencies (and by some private owners as well) have been negotiated selection, cost/design competitions and bidding.

A summary of these selection methods follows:

Direct Selection The Design-Builder is selected directly by the Owner on the basis of such factors as reputation, technical and managerial qualifications, past performance, and prior association. Direct selection is most commonly utilized by private sector owners.

Negotiated Selection A number of Design-Builders are prequal ified or interviewed, with selection based upon the same criteria noted in direct selection plus additional factors such as preliminary design solutions, fees to be charged, recent comparable costs, personnel to be assigned to the project, and scheduling commitments. As with direct selection, the negotiated source selection approach is most commonly utilized by private sector owners; however, major federal agencies (GSA, Corps of Engineers, U.S. Postal Service) are also adopting this method on certain projects.

Cost/Design Competitions Proposers are shortlisted on a qualifications basis and requested to submit a qualitative proposal and firm price. The Owner establishes an evaluation system for qualitative features and for price. The technical proposals are received by the Owner with the price submitted simultaneously but separately. The Owner reviews each technical proposal, then price, and makes selection based upon previously stated selection criteria.

Cost Competitions This method of evaluation most closely resembles the design-bid-build process. Typically, specific design concepts are issued as a part of the criteria package. The selected firm's role in design is more that of a detailer than conceptualizer. Frequently, proposals are solicited only from prequalified design-builders. The proposals are evaluated, deemed to meet the base criteria, and award is made to the low bidder. This process eliminates two of the most advantageous features of design-build competitions: multiple design solutions and innovations in materials/systems.