By Tracey Nasr
With the rising complexity of projects and the growing expectations of developers and building owners, alternative strategies are being explored to speed up projects. Project manager at Edara, Tracey Nasr, weighs up the pros and cons of design and build procurement.
It is a known fact that developers seek minimum costs, tight schedules and zero impacts on the post-bid budget. Some believe that the ultimate resort is choosing the design and build procurement method, not knowing that design and build does not always achieve the desired integrated solution.
Normally decided from an early stage of the project, owners opt for the design and build procurement method because it reduces overall delivery time. In terms of scheduling, this is accomplished by overlapping the design phase with the construction phase. Statistics have shown that three out of four design and build projects are completed ahead of the established schedule. For example, this is evident in the construction of transportation infrastructure, due to its time limitation. It is logical to assume that, since the project is finishing ahead of schedule, there are some savings in the construction cost as well as additional return on the investment, not forgetting the savings in inflation.
A design and build contract held with the consultant usually accounts for seven to 10% of the total project cost, while the selected contr-actor accounts for almost 90%. It can be a burden for the owner to be paying both consultant and contractor at the same time. However, this makes it advantageous for him in his pursuit of a construction loan.
Another advantage in the design and build project is the sole project accountability. Most of the time it is the contractor, but in some projects it might be the consultant, depending on the established type of contract.
Having a single source delivering the project is a big benefit, and it surely reduces the finger pointing.
This is not the case in a joint-venture design and build (architect and contractor), where assigning a project management team becomes extremely valuable to the client in order for him not to be dealing with two different points of contact. The project management team will thus handle this challenge and advise the client, who should still be substantially involved and present at all phases of the design and build project.
While the main reason for selecting design and build is the shortening of the duration of the project, experience has proved that choosing design and build does not necessarily reduce claims and costs. On the contrary, change proposals and variation orders, which are common in large projects, will often surface and result in excessive costs in any design and build case; much more than in a standard project. This is because, at the time of bidding, the contractor may have based his costs on preliminary drawings that do not contain all the new information that he will gradually be receiving from the consultant after signing the contract.
This initial situation also makes it difficult for the owner to initially compare bids ‘apple-to-apple', because unexpected events will arise and the selected contractor will consider them as an excuse to claim for additional money and/or time by holding the architect accountable for the changes in the construction cost occurring between the preliminary drawings phase and the final shop drawings. The contractor would state that the design changes incurred by the architect were never anticipated and that a design contingency was never included in the contract.
These are realities that can't be ignored and owners should know that problems exist in the design and build system. Moreover, the design and build contract between client and contractor, which is customised in most cases, might legally have flaws, especially in terms of role playing. Boundaries might not have been marked properly between the architect, owner and contractor, thus creating tensions in daily on-site interactions. While the focus should be on completing the project for the owner, the project team members may not share common interests. In any problem-solving situation, the contractor will base his decisions on economics, while the architect's design tries to rule by looking better and providing value and safety to the end user. Consequently, different attitudes arise, responsibilities and relationships are unclear and design quality may be shaken.
Regardless of the financial results of the project, the owner is expected to ultimately appreciate the final outcome of his project. The ideal situation to end up with the least cost and time variations, without compromising on quality and without legal issues among parties.
Essentially, the D/B procurement method has the potential to achieve a win-win status in any project. The success factor is sufficiently strong especially when the contract between the contractor and the owner is very clear in terms of role playing and pricing, while making sure that the assigned consultant is a comfortable fit for this D/B type of projects.