Many governments, municipalities and utility agencies have big dreams for supporting their communities with capital improvements, but they’re faced with limited time, money and expertise. Every major infrastructure project has unique stakeholders and conditions, so rigidly adhering to a single approach limits the value and effectiveness. Opportunities for flexibility in how these projects are delivered help bridge the gap between necessary resources and what’s available. Let’s explore the pros and cons of common delivery methods to identify which one offers project owners the most flexibility:
Design-Bid-Build (DBB)
Contract Structure: DBB projects implement two separate contracts under the project owner—one for the designer (value-based) and one for the builder. As with all four project delivery methods compared here, trade subcontractors are contracted under the builder.
Contract structure: DBB projects implement two separate contracts under the project owner—one for the designer (value-based) and one for the builder. As with all four project delivery methods compared here, trade subcontractors are contracted under the builder.
Advantages: This project delivery method is widely accepted throughout the construction industry and facilitates owner involvement during design. It offers independent oversight of the builder, along with higher quality control.
Disadvantages: DBB requires multiple points of responsibilities, which reduces collaboration between the designer and the builder. The owner takes on most of the risk, and low-bid contractor selection often results in performance issues and change orders. Linear phasing increases the project duration and lowers cost control.
Best application: This contracting type is best for owners that want to be heavily involved, don’t have a tight schedule, are looking to execute a project that is extremely complex, or the scope is still uncertain.
Flexibility: DBB offers little to no flexibility.
Contract structure: CMAR (also known as construction manager/general contractor, or CM-GC) projects operate under separate contracts—one for the designer (value-based) and one for the builder (value-based with cost considerations).
Advantages: This delivery method encourages early builder involvement during the design phase, increasing the accuracy of risk, cost and schedule assessments in addition to early constructability reviews. Rather than low-bid contractor selection, the owner may choose their builder based on qualifications and experience. Pricing and design can be executed in parallel, optimizing the project schedule.
Disadvantages: Similar to DBB, CMAR designates multiple points of responsibilities. There’s no legal obligation joining the designer and the builder, creating the potential for disputes and claims to delay project completion.
Best application: CMAR works when the schedule isn’t a top priority, the project scope is complex or uncertain, and the owner wants construction input during the design phase.
Flexibility: This delivery method offers more flexibility than DBB because owners are given more information to make more educated and accurate design decisions earlier in the project. Understanding the impact of these decisions enables project owners to be more certain of the project cost and schedule.
Contract structure: FPDB (also known as lump-sum design-build) projects utilize a single contract for the design-build entity (cost-based with value considerations).
Advantages: FPDB projects feature a single point of responsibility, allowing the owner to transfer risk and the performance warranty to the design-builder. Project owners may fast-track the schedule by procuring work packages prior to the completion of final design. This provides the earliest possible fixed price and facilitates cost control. Shared incentives and collaboration between the designer and the builder promote innovation and creative problem-solving.
Disadvantages: Once price is established, owner involvement may be limited. There’s a greater potential for unforeseen costs due to change orders, disputes and schedule delays.
Best application: FPDB is best used when the schedule is critical and existing conditions are widely understood. This delivery method works for owners who don’t want direct involvement throughout design and construction on a project with a well-defined scope.
Flexibility: FPDB provides project owners with more flexibility through procurement and during final negotiations of the fixed price. However, once the fixed price and qualified proposal terms are accepted, flexibility becomes limited except through change orders.
Contract structure: PDB projects implement a single contract for the design-build entity (in contrast to FPDB, value-based with cost considerations).
Advantages: With PDB, owners have a much better understanding of the impacts of their design decisions and maintain full control of design during the preconstruction phase. PDB offers owners a single point of responsibility, high quality control, access to all cost data, and opportunities to transfer to the design-builder. There’s tight collaboration between the designer and the builder.
Disadvantages: PDB requires a more up-front design effort than FPDB, and open-book bidding occurs later.
Best application: This delivery method is best for project owners when they are seeking a high degree of involvement on a complex project. It’s also beneficial when time is critical and project scope is uncertain.
Flexibility: When compared to CMAR and FPDB, it’s clear that PDB offers the most flexibility. Project owners benefit from the collaborative environment PDB facilitates in the earliest phases of design, when the most influential best-value decisions are made.
In contrast to traditional DBB, collaborative delivery approaches including CMAR, FPDB and PDB offer strategic advantages and maximize flexibility for project owners. Project owners developing complex infrastructure projects no longer are limited to traditional approaches and should consider PDB as their best option for optimizing cost, schedule and their overall experience.