Design-Build versus Design-Bid-Build

By slarcWMB

Posted October 18, 2021

In Posts

Design or build? How about both. The traditional Design-Bid-Build process for delivering new construction has been giving way over the past few years to an approach that offers many benefits to Owners, Architects and Builders.

Termed Design-Build, it reduces

image by The Leffler Group

…the two steps of selecting an architect and bidding a project to just one where the architect and builder team up with an Owner to design and build a project as a single team. In an era when time is money, and 10-20% of construction costs are based just on the duration of the project, it seems obvious that the Design/Build approach can offer cost savings to an Owner, among many other benefits.

The Design-Build approach has increased to well over 50% of all construction projects today, making it one of the most significant trends in design and construction in decades.

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Smith LaRock Architecture P.C. specializes in the design of facilities for the Process Control Industry. We integrate architectural design requirements with key human factors to create designs that support the control mission, protect the Users, and promote better safety and deeper HSE benefits.

Simply stated, Design-Build

…is a system of contracting under which one entity performs both design and construction for an Owner. The D/B entity is made up of an architect who teams up with a builder. Typically the Builder is engaged by the Owner, and the Architect is engaged by the Builder under a contract set up for design-build: the main premise is to form an alliance between Owner and Design/Builder to eliminate the adversarial nature a pure bid project can create where Builders must compete with other Builders for a project.

To win a hard Bid project

…assuming all other things to be relatively equal, the lowest price is often a key factor- after all, who wants to pay more if they don’t have to? Whether price is a good factor or not is the subject of another discussion; in this approach, it is human nature for low bidders to look for ways to gain back compensation the they perceive is lost in the act of offering a ‘low’ or ‘winning’ price through change orders discovered during the build process, generating that adversarial feeling. As a project proceeds and more issues arise – and they do- there’s no such thing as a perfect project, the perception or feeling is more and more adversarial.

Under a collaborative approach

…like Design/Build, the Owner engages a Builder with an Architect as a teaming approach, and the project is developed with input from all principals. The Owner has access to real-time construction pricing during design; the architect can design the building with real-time value-engineering input from a builder so the most efficient systems can be developed; and the Owner has the Builder bid the project for him or her once the design is completed. Yes- the bidding process still occurs, just at a different level.

On behalf of the Owner

…the Builder tenders the project to the various subcontractors who need to be involved to get the various disciplines/products installed- concrete workers, steel framers, roofers etc. The Builder coordinates the collection of their bids and forms the ‘best pricing’ as a combination of subcontractor experience and safety record, performance record, pricing, and availability, confirming each subcontractor’s proposal to verify all parts of the project are included.

As a benefit, the Owner gets to see

…an open-book ‘Bid Tabulation’ showing three or more bids for each part or product needed for the work is assembled, and the final price is developed- a “Guaranteed Maximum Price” (GMP) – can then be provided to the Owner. By creating opportunities to foster these relationships during the design process, the old-school delivery process where Owners and Builders are adversaries is left out of the process. The architect works closely with the Builder during construction phase to help ensure all the protections available to the Owner by having the architect remain engaged are still in place.

There are essentially six primary advantages that are associated with the design/build process:

Single responsibility – The design/build approach provides both architecture/engineering and construction under a single contract. Therefore, the Owner’s control of the entire design/build process is strengthened and financial risk is reduced by contracting with a single firm that is unconditionally committed to the success of the project.
Early knowledge of the GMP – An experienced design/build team, using modern BIM tools and working closely with its Owner/teammate can accurately visualize the completed project at an early stage through the computerized tools. Continuous and concurrent estimating during the development of design results in accurate, guaranteed construction costs and schedule far sooner than traditionally possible. This permits the acquisition of project financing and approvals well in advance of the delivery of Issue For Construction (IFC) documents- the plans and specifications.
Value-engineering – working as a team, the design and construction personnel can evaluate alternative concepts and systems with the Owner, as well as materials and methods efficiently and accurately. From the very beginning of a project, both design and construction expertise is collaboratively focused on all components of a project. Operating expenses can be evaluated against capital cost up front to further help optimize lifecycle costs.
design-build-relationships

Time strategies – The design and construction processes can run concurrently to a certain degree; unique bidding periods and redesign time are minimized once a project definition is known, and long lead time purchases can be made by the Builder far earlier in the project schedule to ensure those materials are on site. The total project duration can be significantly reduced, resulting in earlier utilization and superior total project economics.
Quality enhancement – Design/build projects can enable higher quality results than the traditional approach that often pits architect against contractor. Since the design/builder has the overarching responsibility for performance, it is motivated to build with quality and efficiency. Having a say during the design phase helps the Builder eliminate the traditional finger pointing among the architect, engineer and contractor groups, and allows resources and attention to be productively focused on cost effective solutions as needed that reflect best value and quality.
Economical Efficiency – Real-world applications of the design/build process have been extensively studied over the past couple decades and some interesting metrics have been uncovered. Of the three project delivery types evaluated – Design/Build, Construction Manager (CM) At Risk, and Design-Bid-Build – when assessing total cost, schedule adherence and quality delivered on over 350 projects in six markets: light industrial, heavy industrial, multistory residential, simple office, complex office and high technology, it was found that Design/Build is the most repeatable, economical and efficient project delivery system in the building and construction industry today.

The findings of the construction study concluded:

Unit cost –Design/build costs at least 4.5% less than CM@R and 6% less than DBB;

Construction speed –Design/build is constructed at least 7% faster than CM@R and 12% faster than DBB;

Delivery speed – Design/build is delivered at least 23% faster than CM@R and 33% faster than DBB;

Quality –Design/build exceeds the quality expectations of all other formats.

There is ample evidence today

…that the Design/Build approach incentivizes the Architect and Builder and the Owner by offering more cost-effective and time-efficient methodologies than other project delivery methods, except for one key item. The primary obstacle to deeper penetration of this approach today is education about its processes and benefits.

Using an EPC approach

…(engineering procurement contractor) is essentially run as a large scale Design/Build approach, except the EPC then engages the Design/Build team. EPC selection may still be a traditional Bid approach.

As an Owner, it should be known

…that pushing their direct involvement further away from the Owner’s purview increases risks and can reduce project success. Owners and Architects need contact to ensure needs and wants are embedded into a project.

Many Owners are unfamiliar with

…or have not / cannot use the Design/Build delivery system to enjoy its benefits; some are restrained within a company’s own procedures to continue applying the status quo approach. Success is elusive; if there are advantages out there to help your projects achieve better success, Smith LaRock would like to help you achieve those benefits.

Many major companies are using the design/build process to construct their new facilities every day. When you find a good Design/Build team, it makes sense to use that team to your advantage.

The government and companies that believe the Bid Process produces the least costly project are the last real holdouts to D/B procedures since public and shareholder money demands a more public process. But cheaper is not necessarily better.

It is evident to many major companies that the Design/Build process is gaining momentum to become the leading project delivery system in the industry. Before 2016, the Design Build Institute of America predicts that more than 50 percent of all projects will follow the Design/Build approach. In the final analysis, Design-Build is easier for the Owner, more efficient, faster and less expensive than any other process of facility planning and construction.