The Dotted Line: Why is design-bid-build still the No. 1 process?
The construction industry is full of conversations about how the number of potentially costly and time-wasting design flaws can be reduced when the owner, architect, engineer, general contractor and even key subcontractors get together before construction starts to hammer out the logistics and other project details. For these reasons, collaborative methods like integrated project delivery (IPD) are garnering interest — but they aren't making big inroads yet.
According to the Lean Construction Institute of America and other groups, the design-bid-build (DBB) model is still the most widely used project delivery method in the U.S. For straightforward projects, like a simple stretch of highway or a time-tested national chain-store unit, DBB makes sense. The project team can expect few design surprises and limited change orders, and therefore can effectively predict the schedule.
Even for municipal heavy-construction projects, DBB is the norm for Skanska USA's building unit said Robert Luckey, corporate senior vice president of that division and a member of the company's project planning group.
However, DBB contracts, like many of the form agreements attorney Michelle Schaap reviews from professional organizations such as the American Institute of Architects or ConsensusDocs, don't promote collaboration among the team's players.
"That’s not to say that you can't encourage, require or foster cooperation and collaboration," said Schaap, who works for Chiesa Shahinian & Giantomasi, which has offices in New York and New Jersey, "but I think if you're doing design-bid-build, you're starting out behind the eight ball."
Legal reasons for design-bid-build
For public projects, there are legal and political issues that play into the decision to use the DBB process. DBB makes it’s easier to compare bids when the agency is required to award the project to the low bidder because contractors and subcontractors have the same information, said Scott Holcomb, construction attorney at Dickinson Wright in Phoenix.
With an IPD or a design-build process, the costs aren't fully flushed out upfront. Team members often are assembled based on their qualifications, not on costs. The team members gain experience working together over time, and often are awarded more and more work. Holcomb said that inevitably draws complaints, and often produces a recipe for political fireworks when local small businesses are cut out of the bidding process, the attorney said.
Collaboration on private projects
For private work, Luckey said, the reluctance to explore collaborative methods is sometimes driven by architects who don't want to lose control or who don't want to take direction from both the owner and general contractor. “The design community is not quite there yet,” he said. "There are national firms that embrace [IDB] and some that would not want to deliver on that.”
However, Luckey said, designers and others need to let go of exclusive relationships. In fact, he said, that upwards of 80% of Skanska's private projects are delivered as construction manager at risk (CMAR).
When a company assumes the CMAR position, it typically locks in a contract amount by giving the owner a guaranteed maximum price (GMP) before the project design is complete, according to the Construction Management Association of America. The CMAR usually offers pre-construction services related to scheduling, budget and design, and can also issue subcontracts for fully designed portions of the project before the entire design is done.
All parties answer to the owner in order to territory issues that creep up with CMAR. This creates what Holcomb refers to as “constructive conflict,” where the architect and general contractor can disagree, but the process is done through the owner.
Whether or not a private owner can take advantage of CMAR or other collaborate delivery method depends on the financing method, said Stephen Richman, manager of the construction, municipal and real estate litigation practice at Dickinson Wright. “If they have financing groups they have to answer to, they want as controlled a budget as they can get,” he said.
Although collaborative delivery methods offer benefits for private and public owners, they come with additional responsibilities that can be burdensome. For instance, small public agencies might not have the staff or funds for the additional auditing and monthly administrative duties that collaborative methods entail, Holcomb said.
Skanska's owner clients, Luckey said, are surprised at how much work is required with a collaborative model like IPD or CMAR. “It’s more involvement and it’s time-consuming,” he said, “and they have to be available constantly to the team. They’re not sure what they signed up for until they’re actually in it."
Nevertheless, public and private owners that have been through one project that, for example, uses IPD, tend to replicate that method on the next project, Luckey said. WHY?
Growing public use?
As architects and contractors continue to employ collaborative project delivery methods in the private sector, they are pushing for such practices in public projects. Holcomb pointed to Arizona’s construction community as the driving force behind getting state lawmakers to allow delivery methods like CMAR. But, he said, for CMAR to become widespread nationwide, "the industry is going to have to drive that."
But resistance on the part of some public agencies – DBB machines, Luckey called them – will be hard to overcome. “I think there are certain agencies that will never change,” he said.
Schaap said all parties should keep in mind that no matter the delivery method, collaboration help avoid potential conflicts. “If you can bring more [of them] to the table earlier,” she said, “by definition, your design is going to be more efficient, and [project members] are going to feel better that they were taken into consideration.”
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