Construction Project Delivery Methods

Consideration of the best delivery method – the working contractual relationship between the organization, contractor, and designer – should be explored and decided upon as early as possible in the design process.

The delivery method chosen will be based on your organization’s capabilities combined with the construction complexity and scope of your building project. With a small upgrade, you may be able to request contractor estimates based on minimal drawings and narratives. For more complex projects, such as a new building, complicated addition, or significant renovation, selection of a specific project delivery method will be an important decision impacting time, price, and ultimately the quality of your building.

The three most common delivery methods include: Design/Bid/Build (DBB), Design/Build (DB), and Construction Manager/General Contractor (CM/CG). The method selected is based on a balance of risks and responsibilities. Note that there can also be overlap between project types. Your design consultant will help you determine the best option for your project and plan the best strategy given your region and local building potentials and restraints. For a general reference, the following summarizes each delivery method:

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Design/Bid/Build (DBB)

Design/Bid/Build is considered the traditional project delivery method in which the organization first contracts with design professionals to plan and design the project. In a linear work sequence, the design team collaborates with the organization to refine project intentions and produce a full set of construction drawings and specifications. A request for bids is then issued for contractors/builders to bid on the project. With design/bid/build, the contract is most often awarded to the lowest bidder, though other value-based criteria may have been included.

This project type is best suited for budget sensitive, complex projects, where the organization wants maximum participation in design. However, a balance between the following advantages and disadvantages should be considered:

Advantages

Disadvantages

This is a familiar project delivery method and may be most appealing for an organization new to the construction process. It’s a simpler process to manage. There is a clearly defined project scope for both design and construction. The project scope is finalized prior to start of construction, and there is a single submitted set of documents. Both designer and contractor are accountable to the organization. This process creates the most bidding opportunities. The architect is the organization’s representative.

The schedule may be longer than with other project delivery methods. The price is not established until the bids are reviewed. It may require redesign or rebid if the bids exceed the project budget – incurring costs and affecting schedule. If the project scope is incomplete, or the organization requests changes, change orders may foster adversarial relationships between all parties and result in schedule delays and increased costs. There is more room for litigious activity. There is no opportunity for contractor comments on project planning, value engineering, budget, or estimates prior to bid.

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Design/Build (DB)

For Design/Build, a single contract is established with one entity, typically the contractor, to provide both design and construction. Procurement for DB teams may include selection based on the organization’s determination of best value, lowest cost, or a combination of both. Because there is one contract, the process is streamlined. A guaranteed total price can be provided early in the process, based on design criteria, or once the design is moderately developed. The contractor/architect team then develop drawings and specifications that fulfill the criteria, staying under the guaranteed maximum price.

This project type is best suited for time and budget sensitive new projects where the organization has a clear idea of what it wants. Written performance standards and an architectural program are necessary to ensure the organization’s wants and needs are met.

Advantages

Disadvantages

Shortest Schedule: Allows for overlap of design, procurement, and construction phases. Early comments from the contractor may result in construction cost savings. There is a single point of responsibility for design and construction covering cost, schedule, and performance. It is possible to secure a guaranteed price early in the process. The organization has input on all subcontractor selection. The D/B team assumes higher risk.

Problems and costs could be incurred if the organization is unclear about what it wants. Once construction begins, changes are difficult and expensive given the overlapping schedule. The organization must make quick decisions with reduced time for reviews and comments. Alaska has fewer qualified DB firms to select from. The organization loses control in selection of the design team, but still maintains interface with the designer. There is an overemphasis on price, which may compromise quality. The organization has greater responsibility in navigating with the contractor.

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Construction Manager/General Contractor (CM/GC)

CM/GC is also known as Construction Manager at Risk (CMAR). With this delivery method, the organization first contracts with an architect for design. During the design phase, the organization then hires a contractor (as a construction manager) to provide feedback during the design and construction phases of the project. During the design phase, the CM works with the designer and the organization to help identify risks, provide comments for cost estimates, value engineering, and project schedule projections. They also provide input on constructability, systems value, and potential cost savings, including suggestions for innovative construction solutions.

Following completion of the design phase, the CM and organization negotiate on the price for the construction contract as a guaranteed maximum price (GMP).

This project type is best suited for large new or renovation projects that are schedule sensitive, difficult to define, unique construction types, or subject to potential changes. Complexity may include multiple phases, technical complexities, or complex coordination, where the oversight and coordination delivered by a construction manager is significantly beneficial. These technical challenges often require “thinking out of the box” for innovation solutions.

Advantages

Disadvantages

The CM is selected based on qualifications, experience, track record, and other value-based criteria. The organization can select a “best value” team. Quality is guaranteed at the maximum price. The organization participates in all subcontractor selection. There is more surety of outcome because of early, collaborative involvement of the CM. There is a “team” relationship among the organization, architect, and contractor, fostering innovative thinking. There often are results in improved cost control. There is an optimization of construction schedules. There is an ability to “fast track” construction by bidding early work prior to final design completion. The need for change orders is minimized.

Higher pre-construction costs are incurred. The organization is responsible for changes. The architect may not take input from CM during design. It can be difficult for organizations to determine if the established GMP is reasonable for the type of project constructed. The level of sophistication can limit competition. There can be schedule and cost ramifications if an acceptable guaranteed maximum price is not reached.

Once in the construction phase, the same three key milestones will be met, regardless of project delivery method:

1. Notice to proceed
2. Substantial completion
3. Final commissioning

The construction phase is completed when the building is finished, the contractor has completed the final list of deficits, and a certificate of occupancy is issued.