Design-build project delivery on the rise
What was once deemed the wave of the future — design-build project delivery — has long since arrived and is riding high in nonresidential construction, according to a recent national study and several local firms that specialize in this integrated approach.
Design-build is the process by which one company manages both design and construction services under a single contract.
"It gives the (project) owner one neck to squeeze," said Jeffery Lynch, director of client services for New Cumberland-based Navarro & Wright Consulting Engineers.
Lynch and others familiar with this approach said speed is the driving factor because design-build reduces the delivery schedule by overlapping design and construction. The architect and other firms are contracted to the design-builder, who is the first and last contact for the project owner, minimizing risk and potentially trimming cost.
In 2010, more than 40 percent of projects nationally used design-build, a 10 percent increase since 2005, according to a study performed by Georgia-based Reed Construction Data for the Design-Build Institute of America.
In the study, the Mid-Atlantic region ranked fourth out of nine census regions for number of design-build projects — 6,774 — and third in dollar value of those projects — $135.9 billion.
Design-build is most popular in the military sector, where it holds 80 percent of market share by dollar value, the Washington, D.C.-based DBIA said. It's also widely used in the medical, industrial and commercial sectors.
"It's a different mindset," said Lynch, compared with the traditional design-bid-build process, where the project owner has an architect design the project and it's then sent out for bid to general contractors.
Most publicly funded jobs legally require the full design-bid-build procedure. Design-build critics argue criteria for contractor selection is subjective.
While unit cost is not guaranteed to be lower with design-build projects, that often is the case because preconstruction is quicker, construction companies said.
"You want builders on the team who have experience in unique requirements," said Bill Forrey, vice president of Lancaster-based Wohlsen Construction Co. "By utilizing those skills in the design process, the thought is you will have a better product."
The challenge for the design-builder is piecing together the right team to help the owner establish a guaranteed maximum price before the design is completed, so the company can start financing the project earlier, he said.
"It allows you to do things in parallel instead of sequentially," said Forrey, noting that about 75 of his company's business follows this model.
Since the bulk of the design-build work is private, a project owner typically will reach out to design-build firms, Forrey said. The owner will request qualifications and then interview a few firms before soliciting written concepts for the project, he said. They then select the team.
A design-builder is proactive compared with the general contractor, who reacts to bid documents and isn't involved in the preconstruction work, he said.
"It's the same positions, but people in this work have to be skilled at collaboration," Forrey said. "(Design-build) has been around for a long time, but people are getting a lot better at it."
With new technology and continued collaboration, he said he expects more projects moving forward will gravitate to the design-build model.
The speculative nature of the design-build work might deter some companies from getting into it, Lynch said, although larger projects have stipends attached for those planning to pursue them.
The design-builder also has to be very experienced or a project could become costly to the owner and the firm, professionals said.
"One person is ultimately responsible," said Rick Evans, president of Harrisburg-based Reynolds Energy Services, a division of the Reynolds family of construction service companies. "If it doesn't work, that contractor comes back and fixes it. That doesn't exist in the competitive bid market. There is always finger pointing if something doesn't perform."
In the current economic environment, where contractors and subcontractors are hungry for work, it is possible the traditional delivery method could save more money than design-build because of low bidding, added Todd Buzard, vice president of preconstruction services for Reynolds Construction Management Inc., the construction management arm for Reynolds.
"There is a quality issue inherent with design-build, as long as the owner, when he picks the team, sees that quality potential there and he doesn't go cheap," Buzard said.