29 July 2013
Multiple delivery methods are available to owners seeking to complete a new project. Often they have little experience in construction. Within the last 15 to 20 years design-build has assumed a prominent position among preferred project delivery methods. Much of the growth has been fueled by contractors seeking more profit/control and the Federal government attempting to streamline its process and commit budgeted funds faster.
The open market bidding process has several pitfalls when not handled well. Best value doesn't always win the project and it's not uncommon an award goes to a contractor that made a big oversight. Making it tougher, a good contractor bids the plans and specs while a poor one looks for the ambiguities that can later be exploited as changes to make up for a low bid. The owner and their design team are then forced to contend with each ambiguity.
For the contractor, getting in early with a quality proposal and controlling the process is a welcome alternative. If done right, it can have good results that include quicker turnaround and less overall cost. At the same time, owners need to realize a few key points. First, the contractor's design team typically answers to the contractor and not the owner. Second, if the owner has no design experts in their corner who is there to assure the owner's intent is being implemented? Who if anybody will ask whether the owner wants to spend an extra 5% now on a system that will quickly save them 15% later?
Recently, a national contracting publication ran a survey and follow-up article on contractors in design-build. Quotes include "There's less competition in this market," "Profit margins are higher," and "Less competition, better margins." All of these are generally true if either the contractor is given lots of leeway or the delivery time can be shortened. Design-Build proponents contend it results in fewer design errors and faster resolution of problems. This is often because most situations are quickly settled in the contractor's favor to expedite the work.
One huge mistake owners often make is assuming a five to ten page written Request for Proposal (RFP) will provide contractors the same guidance about their intentions and requirements as a set of construction documents consisting of 500 detailed drawings and complete specifications. Not only does a short RFP leave room for a lot of alternate interpretation, but the contractor has to make judgment calls or financially account for possible risks where direction is limited.
Bridging documents are a good solution to the design-build problem of securing a project through a written RFP. Bridging documents can be quickly prepared by a design team independent of the contractor and are often the best solution because they convert the owner's goals into clear industry language. They can also be used to secure competitive proposals from several design-build contractors where the contractors are then free to differentiate themselves on the enhanced value they can bring. At the same time, the owner can retain that same bridging document team as their voice throughout the process.
We have been involved on both sides of the design-build table. We prefer working with contractors sharing a common vision that projects should result in both client satisfaction as well as profit. In fact, we prefer contractors that sell their design-build services based on both the quality of their work as well as competitive pricing. We've also worked as the owner's representative to help them prepare their RFP and bridging documents. In both cases we find a team approach produces the best design-build solution.