UPDATE: The Design-Build Institute of America responded to the study results and claimed the researchers are "off the mark," as they did not account for possible additional costs resulting from owner-initiated scope changes, according to the Engineering News-Record.
DBIA's Executive Director Lisa Washington told the News-Record that the DBIA database "does not include information on owner-directed changes that result in intentional modifications to scope and budget. In the absence of access to this additional information, projects can appear to be over budget, but in fact are not."
- The Journal of Engineering and Construction Management has published a study that found the design-build delivery method in construction contracting results in a majority of on-time projects, but half of projects using that method run over budget, rendering that method’s advantage of cost savings "uncertain," according to the Engineering News-Record.
- A team of researchers in China and Australia looked at 418 projects in the Design-Build Institute of America database and discovered that although 50% of them resulted in cost overruns, 75% were completed on time or ahead of schedule.
- Researchers also found that the most commonly used award method is best-value with discussion, and the dominant contracting method is lump sum.
There has been a wave of discussion in the construction industry recently about how different contract types and delivery methods affect a project’s progress and outcome. Most recently, Santa Clara County CEO Jeff Smith blamed the design-bid-build contract method for troubles that have plagued the Valley Medical Center project.
The county fired Turner Construction last year for allegedly dragging its feet on completion, but, at the time, Turner maintained the pile of county change orders and design changes were responsible for the delays. The county even filed a lawsuit against Turner for breach of contract and negligence, to which the company responded with legal action of its own. The two parties have since decided to mend their relationship, and Turner has returned to the job.
Smith’s argument is similar to that of the Massachusetts Bay Transportation Authority after $1 billion in cost overruns and delays on the Boston Green Line rail extension. The MBTA ended up getting rid of its general contractor White-Skanska-Kiewit, along with the other lead contractors on the project. The supposed culprit in the MBTA case, was the procurement process for the guaranteed maximum price aspect of WSK’s contract. Details have arisen since then, however, that point to the MBTA’s possible lack of management and oversight before the project even started.
While some contract types might be better suited for certain types of projects, the contract type and procurement method don’t automatically seal a project’s fate; the quality of management is always a crucial factor.