When it comes to capital improvement projects, the choice of project delivery method can have a significant impact on the outcomes. Two commonly used methods are design-bid-build (DBB) and design and build (DB). In this blog post, we will delve into the key differences between these two methods and explore the benefits of one over the other.
The Evolution of Project Delivery Methods
Over the past two decades, there has been a growing demand from public owners for enhanced quality, reduced costs, and shorter project delivery periods. Consequently, the industry has experimented with different project delivery methods to meet these demands.
According to the Construction Industry Institute (CII), two widely accepted methods are design and build & design-bid-build:
- Design and Build: This method involves hiring a single entity, the design/builder, to handle both the design and construction aspects of the project under a single contract. The design and construction work can be performed by the entity itself or subcontracted to other companies. Collaboration between the design and construction disciplines is high in this approach, and the general contractor typically assumes contractual responsibility.
- Design-Bid-Build: This is the traditional process in the U.S. construction industry, where the owner contracts separately with a designer and a contractor. The design firm is responsible for delivering 100 percent complete design documents, and the owner solicits fixed-price bids from contractors to execute the work. Designers and contractors have no contractual obligations to each other, and the owner bears all the risks associated with the completeness of the design documents.
Factors to Consider in Choosing a Project Delivery Method
To determine the most suitable project delivery method and contractual arrangement, owners should carefully analyze the following factors:
- Capacity and Technical Capability: Owners need to assess their ability to closely manage the construction process. The level of control and supervision required can vary depending on the chosen method.
- Individual Project Drivers: Each project has unique requirements and objectives. Owners should consider the specific needs and goals of their project when selecting a delivery method.
- Sensitivity to Cost and Schedule Escalations: Cost and schedule overruns can significantly impact a project’s success. Owners should evaluate their tolerance for potential escalations and choose a method that aligns with their risk appetite.
- Comfort with Bearing Project Risk: Different delivery methods allocate project risks differently. Owners must evaluate their comfort level in assuming risks and choose a method that suits their preferences.
Benefits of Collaborative Delivery Methods
Collaborative delivery methods, where construction has input into the design process, are gaining popularity. These arrangements involve contractual obligations for design and construction teams to work together in the project’s best interest. Owners with limited capacity to manage construction or discomfort with project risk often find the collaborative design and build method more effective.
Superior Performance of Design and Build
To determine the project delivery method’s effectiveness, it is crucial to examine past project results achieved using different methods. Multiple studies conducted by the CII, the American Society of Civil Engineers (ASCE), and various universities have consistently shown that owner-submitted projects delivered using design and build significantly outperformed those using design-bid-build in the following areas:
- Cost Performance
- Schedule Control
- Number of Change Orders
- Quality of End Product, with reduced rework
The Advantage of Design and Build Across Multiple Factors
Cost and Schedule: Research studies have consistently indicated that design and build projects outperform design-bid-build projects in terms of cost, schedule, changes, rework, and overall practice use. Collaborative project delivery systems produce more reliable cost outcomes, making design and build favorable for public owners.
Risk Reduction: By involving the design and build entity throughout the design process, the risks associated with design completeness are transferred to the contractor. This reduces the likelihood of costly change orders, which can disrupt budgets and schedules.
Higher Quality: Design and build teams with experience working together consistently deliver the highest quality project outcomes. Their projects exhibit lower difficulty during start-up, fewer call-backs, and a better ability to meet project needs.
Evolving Project Drivers: For projects driven by quickly evolving needs or demands, the design and build method provides an advantage. It allows scope refinement even after the project has commenced, providing flexibility and adaptability to changing requirements.
While no single project delivery method is universally applicable to all projects, the overwhelming evidence from various research efforts suggests that design and build projects outperform their design-bid-build counterparts in terms of cost, schedule, quality, reduced risk, change orders, and adaptability to evolving facility needs. However, it is important for owners to assess their unique project requirements, risk tolerance, and management capabilities when choosing the most suitable delivery method.