Successful Project Delivery
In this month’s issue, you will see the results of our Managing Excellence – Delivering Success awards program. The winning projects showcase best practices in construction processes, and the methods and procedures that were used to efficiently control time, cost, and quality. The challenges met by the management teams ranged from the coordination of a variety of interest groups, government agencies, and environmentalists, to an urban site where coordinating the use of offsite storage and lay-down areas was key to the project’s success. The outcome of their effective management techniques is seen in the quality projects that were delivered.
In addition to effective management, school districts must also look at effective delivery methods. School construction can be a stress-filled, expensive experience. Districts (owners) often struggle with how to stretch their limited dollars, and limited staff, and still ensure that their facilities will be high quality. As state laws regarding bidding and construction change, many are looking at alternative construction delivery methods to ensure they get the“best value” for their money. The three primary delivery methods used are design-bid-build, also known as the traditional method; design-build, used extensively for projects with a compressed timeline; and construction management at-risk (CM@R). Each method has its pluses and minuses, and each has varying levels of owner risk and owner control.
Design-Bid-Build — Design-Bid-Build is the most common project delivery option and is commonly referred to as the“traditional” method. The key players are the owner, the architect, and the builder. Separate contracts are held between owner-and-architect, and owner-and-builder. In design-bid-build the owner contracts with an architect for building design, then competitive bids are secured from contractors based on those design documents. Final selection is typically based on the lowest responsible bid or total contract price.
Design-Build — In design-build the key players are the owner and the design-build entity (usually led by an architect or a general contractor). A single contract is held between the owner and the design-build entity for both design and construction services. This single point of responsibility allows for fast-track construction — an overlapping of the design and build phases. Cost or solution is typically the basis for selection of the design-build entity. Final project cost is determined very early in the process. On the plus side, this reduces the district’s financial risks. On the minus side, misunderstandings can occur if the district does not have a very detailed program of requirements in place before the project begins.
Construction Management/Construction Management @ Risk — In construction management at-risk, the key players are the owner, the architect, and the CM@R. Separate contracts are held between owner-and-architect, and owner-and-CM@R. The contracts for the trades are held by the CM@R, hence the term “at risk.” The CM is involved with the project beginning in the design phase, and then takes on the financial obligations for construction under a specified cost agreement, frequently providing a guaranteed maximum price (GMP). On the plus side, this dual agency approach often leads to better project coordination, fewer claims, and earlier delivery. On the minus side, a district can risk overlapping or a gap in services if the roles and responsibilities of each party is not clearly defined.
The following criteria is often used to assess which method will work best.
• Time — Short time frame. Fast tracking required.
• Quality — Complexity of the program. Availability of qualified designers/trades.
• Cost — Financial and risk management policies. Resistance to anything but low bid.
• Risk — Level of risk the institution can accept and effectively mitigate.
• Owner’s Expertise — Experience and capacity of owner’s staff.
There are a number of factors that go into deciding which method will work best for you. The construction industry operates differently in various parts of the country, each state having its own rules and regulations regarding alternative delivery methods. Each school district also has its own history, its own strengths and needs. We say that educational facilities is not a one-size-fits-all business. Neither is the choice of a project delivery method.