Understanding Project Delivery

for the Design and Construction of Public Buildings

T
he programming, design Identifying the optimum delivery method
and construction of for public projects depends on how public
important public buildings institutions value their own input; project
require the coordinated cost and schedule; overall project quality;
architecture
efforts of a large number short-and long-term goals; and the
of professionals and organizations. accountability of the project participants.
Critical to the successful delivery of a
complex building project is effectively Contractual Relationship
guiding these diverse parties into a Agent-Vendor
productive and responsive force that When evaluating the opportunities and
represents the interests of public agen- constraints of each delivery method, it’s
cies, institutions and taxpayers. Five important to identify how a project bene-
primary project delivery systems have fits from an agent-contractual relationship
evolved to organize the design and or from a vendor-contractual relationship.
construction work:
Agents, by definition, act in the owner’s
1. Design-Bid-Build interest, providing professional services
2. Construction Management–Agent for compensation. They typically have
3. Construction Management– special expertise and are expected to
Contractor or Construction adhere to a professional standard of
Manager at Risk performance - that is, to exercise reason-
4. Design-Build able care in their services. In selecting
5. Contractor Pre-Selection an agent, the owner normally considers
qualifications, experience and integrity as
The first two delivery systems utilize an most important. Architects, engineers and
open, competitive bidding process and construction managers put their profes-
are therefore generally available for sional expertise to work on behalf of
public sector projects under current law. their clients. As agents, they take respon-
Design-Build, Construction Manager- sibility for overseeing that the owner’s
Contractor and Contractor Pre-Selection needs and intentions are fully identified,
do not include competitive bidding and defined and accommodated.
therefore require special legislation.

Each of these systems has a unique

decision-making structure with distinct
advantages and disadvantages.
Opportunities and Constraints
of Project Delivery Methods

Vendors, by definition, supply a specified contractor builds according to the plans 4. Design and construction roles are
product for a fixed price. Vendors are and specifications, and that the owner clearly defined, and responsibilities
expected to adhere to a standard of meets financial and other obligations to and liabilities clear.
performance established in the construc- the contractor. 5. Owner is an active participant in
tion documents. When selecting a design process.
vendor, the owner usually considers the Design-Bid-Build is an effective project-
cost of the product being supplied, its delivery system that, for many years, has Disadvantages of Design-Bid-Build
delivery, warranty and, only in cases of helped public owners achieve quality in 1. Design-Bid-Build construction phases
disqualification, the experience and repu- the design and construction of public are sequential and may require
tation of the vendor. A contractor who projects. The architect is typically selected more time.
is constructing a building for a specific at the onset of the project based on qualifi- 2. Owner is at risk for final construction
price determined through an open cations and experience, and represents the cost. Actual construction costs are
bidding process is acting as a vendor. owner’s interests during both design and not known until design and bidding
If specifications are met and drawings construction, delivering professional are complete.
adhered to, the contract is satisfied. service as the owner’s “agent”. The
building contractor that is successful in Construction Management
Design-Bid-Build bidding will then contract with the owner Some owners or public agencies planning
In this traditional method of project as a “vendor” to construct the specified construction of complex projects may not
delivery, a design team of architects and design for the lowest responsible price. have resources in-house to manage plan-
engineers is hired to work with an owner ning, design and construction of a major
to develop plans for a building to fit Advantages of Design-Bid-Build building project. To support this need,
the goals, budget and aspirations of the 1. Contractors bid competitively, based Construction Management services can
owner. Based on completed construction on complete design documents to be provided in two different ways to
plans, a contractor is selected through maximize the built product for the price. an owner.
a bidding process to build the building 2. The owner selects the architect on the
for a set price. During the construction basis of qualifications or ability. The
period, the architect works to see that the architect’s role is that of owner’s
advocate.
3. The architect is active in construction
administration so design intentions
are followed.
In one form of Construction Management, In the second form of Construction 2. Early cost commitment gives owner
the owner contracts separately with an Management, the owner contracts sepa- project cost security.
architect, a Construction Manager as rately with an architect and a Construction 3. At Risk entity is responsible for
Agent (CM-Agent) and—through a Manager at Risk or Construction Manager managing construction process and
competitive bid process—one or more as Contractor (CM-Contractor). In this has more clout with subcontractors.
prime contractors. The CM-Agent vendor form, the construction manager is 4. CM-Contractor can reduce owner’s
provides early cost estimating, scheduling “at risk” since he provides both contractor burden in management of large or
and assistance to the owner throughout the services and construction management complicated projects.
bidding and construction phases of the services for the project. Construction 5. CM-Contractor reviews project for
project. Additional cost control and Contractor services are provided to the constructability, cost and schedule,
condensed scheduling are the two main owner based on a guaranteed maximum potentially reducing change orders
benefits of this method. The CM-Agent price, fixed price, cost plus or other means and delays.
approach can be beneficial for large, of defining a contract. This creates a major 6. Fast-tracking and multiple prime
complex projects where construction alter- conflict of interest since the CM is no contracts may speed construction.
natives and solutions can positively impact longer acting as an agent providing profes-
the overall budget. The Construction sional services to the owner, but now is a Disadvantages of Construction Manager as
Manager-Agent performs as an additional vendor delivering a contractually defined Contractor (vendor)
representative of the owner’s interests. product to the owner for a price. 1. Management role of CM-Contractor
is added cost.
Advantages of Construction Advantages of Construction Manager 2. CM-Contractor may provide less
Manager-Agent as Contractor (vendor) building than a bid approach to protect
1. CM-Agent with construction expertise 1. Architect still acts as agent protecting margin of profit. Major conflict of
gives the owner an agent, in addition owner’s interest and architect’s early interest with role as both construction
to the architect, to supervise the project, involvement with owner addresses manager and contractor.
reducing the owner’s management building quality and function.
burden in large or complicated projects.
2. CM-Agent’s project scheduling and
capability to competitively fast track
some items may speed process and
save owner money.
3. CM-Agent’s cost estimating and
construction expertise at design phase
assists in monitoring construction costs.

Disadvantages of Construction
Manager-Agent
1. CM-Agent is added cost. Owner is at
risk for final construction cost; actual
construction costs are not known until
design is complete.
3. Multiple prime contracts increase
paperwork and administrative time,
and increase potential for construction
disputes and claims.
4. CM-Agent typically has less clout to
resolve design-construction issues
than a general contractor and serves
only as a mediator.
Opportunities and Constraints
of Project Delivery Methods

Design-Build negotiation between agencies, officials Advantages of Design-Build

In the Design-Build delivery approach, and constituent communities is expected 1. Generally fastest project delivery
the owner contracts with a single entity or required, a vendor led project delivery system.
for both design and construction. The process may minimize the opportunities 2. Single entity responsible for design
owner has one contract assigning single- for user involvement. The design-build and construction.
point responsibility for the project. The entity is focused on the delivery of a 3. Early cost and scheduling commitment.
Design-Build entity may be a single contractually defined product. Since single 4. Conflicts between project professionals
organization with both architectural and point responsibility leaves no independent internalized; may not involve owner.
construction staffs, or a construction orga- agent representing the owner’s interests,
nization that hires or affiliates with an the owner will often be required to engage Disadvantages of Design-Build
architect as part of a Design-Build team. an administrative architect to assist in 1. Design-Builder may provide less
The design-build entity usually proposes defining the building program, writing building than a bid approach to
the design and construction price simulta- performance requirements, selecting the protect margin of profit. Construction
neously, and the construction commit- design-build entity and administering the costs are non-competitive.
ment is made. Design and construction design-build contract for the owner. The 2. Involvement of owner is generally
may or may not be fast-tracked. owner will often also hire a separate limited to early stages of project.
construction management entity to 3. Hidden reductions in quality are
In a Design-Build delivery system, the monitor its interests. Without early addi- possible when cost-savings and design
architect is part of the Design-Build tional program/ design/specification devel- changes are determined by design-
entity and not the agent of the owner. opment, the owner is likely to get less builder. Short-term construction
Thus, uniquely in the Design-Build building for the price. savings may outweigh life-cycle costs.
system, there is no one in an agency rela- 4. Construction documents not complete
tionship with the owner who is obligated when cost commitment made.
to work in the owner’s best interests. The Disagreements about quality and
design-build team is placed in a vendor design intentions may arise later.
relationship with the ultimate end user 5. Major conflict of interest with role as
groups and public owner. When dealing designer and contractor.
with public sector building projects 6. No objective agent to represent
where much involvement, interaction and owner’s interests.
Contractor Pre-Selection Disadvantages of Contractor Pre-Selection If the proposed building is programmati-
Contractor Pre-Selection has evolved 1. Without competitive bidding from the cally complex or of a monumental
from Design-Build in order to obtain contractor, owner may not obtain lowest quality, it may require additional design
the benefits of an independent designer, construction price, but this can be effort and input from many stakeholders.
shortened schedule and early cost mitigated by mandatory subcontractor The traditional Design-Bid-Build project
commitment. The owner holds separate bidding. delivery system encourages a thorough
contracts with the architect, who func- and interactive design process. Public
tions as an independent owner’s agent, Balancing Cost, Time, entities are also directly accountable
and with the contractor, with whom he Quality and Accountability to their constituents and may favor
negotiates a construction price. Final When evaluating the ideal project delivery approaches where construction is
construction cost may be negotiated to system, a building owner should priori- competitively bid in an open market as
provide for bids from subcontractors, tize project cost, time, quality and with Design-Bid-Build or Construction
with cost savings going partially to the accountability. Design-Build and Management.
owner. The owner/user is involved in Contractor Pre-Selection can overlap
programming and design decisions. A design and construction to address a tight Design and construction of public build-
construction manager may be added to time schedule. Straightforward projects ings, like most complicated human
the team if required. with known requirements are often suited endeavors, requires thoughtful review
to Design-Build project delivery. Design- and consideration of how they will best
Advantages of Contractor Pre-Selection Build schedules require participants to function and endure to provide valuable
1. Provides early cost and scheduling make decisions quickly. Changes to plans service over many, many years. If public
benefits and saves time. become increasingly difficult and expen- architecture is seen as the handwriting of
2. Architect acts as agent protecting sive as work rapidly progresses. And a civilization, then it must be the best it
owner’s interest. there is a limit to the amount of time that can be because it is truly the people’s
3. Architect’s involvement with owner may be squeezed out of a project, no architecture.
addresses building quality and function. matter how many people are working
at the task or which approach is used.
 20 Questions to Ask in the
Delivery of Public Projects

Many issues arise in the early stages of a project involving construction and the shaping
of new or renovated space. Often the most challenging task, when large cost and
complexity of construction is involved, is having enough information available, in a
timely manner, for key decision makers to reach the best decision. Some questions that
arise in these early stages include the following:

1. Who needs to be involved in making 11. Do you have concerns about the
decisions? life-cycle and operational costs of
the building?
2. Will you assign staff to oversee the

20
project? Do they have experience in 12. Can we be responsible to the limited
building projects? resources of our environment?
(Sustainable Design)
3. What are the goals of your project?
What are the constraints? 13. What are some of the special
technologies a project may require?
4. Have you clearly defined the scope
of the project? 14. What is the financial commitment
and risk on this project? Are there
5. Have you done this type of project options?
before?
15. How do you identify the construc-
6. How will the project be funded or tion cost of the building?
financed?
16. What is the role of the design
7. What are the critical limits of the professional in representing the
schedule? owner’s interests?

8. Has a site been selected and 17. What is the role of the contractor in
purchased? representing the owner’s interests?

9. How do you obtain the best value 18. What is project delivery?
for your unique requirements? What
Questions

are the qualities you value in your 19. When might an owner need to select
facilities? a particular project delivery method?

10. What are some special considerations 20. Which project delivery system is
that may emerge in the design best suited for our project?
process requiring attention?

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 Some Terms Defined

Bid Design-Bid-Build Program

• A signed proposal to do the work for • The most common form of project • A written statement setting forth
the amount stipulated. delivery. Architect and contractor hold design objectives, constraints, and
Construction Administration separate contracts with the owner. It is criteria for a project, including space
• Administration of the owner’s contract characterized by three phases: design, requirements and relationships,
for construction during construction bidding and construction. flexibility and expandability, special
period until final payment to the Design-Build equipment and systems, and site
contractor is due. • A project delivery method that offers requirements.
Construction Cost an owner the ability to contract with Project Costs
• The cost of the construction work to a single entity to provide both design • The total funds budgeted for the project,
the contractor and their subcontrac- and construction services. including construction cost, design fees,
tors. Does not include other costs Design-Builder furnishings and equipment, fees and
referred to in the Project Cost • Entity that contracts with a building permits, and contingencies (compare
(compare with project costs). owner to provide design and construc- with construction costs).
Construction Documents tion services through a single contract. Project Delivery System
• Drawings and specifications detailing Design Development Phase • A formalized contractual approach
the requirements for the construction • The second phase of an architect’s which allows an owner to secure
of a project. basic service, which includes developing planning and design services and
Construction Management structural, mechanical and electrical build a project, assuring effective
• This is a broad term covering a variety drawings and specifying materials and management throughout.
of project delivery systems in which a the probable cost of construction. Schematic Design Phase
construction manager is added to the Fast-Tracking • The phase of the project in which the
building team. • Construction delivery approach which architect consults with the owner to
Construction Manager (CM) overlaps design and construction, ascertain the requirements of the
• Additional consultant such as an thereby shortening project schedule. project and prepares schematic design
architect, contractor, engineer or GMP studies consisting of drawings and
developer added to project team to • Guaranteed maximum price. other documents illustrating the scale
oversee scheduling, cost control, Lump Sum and relationship of the project compo-
constructability, project management, • A contract in which a specific amount nents to the owner. The architect also
building technology, and the bidding or is set forth as the total payment submits to the owner a statement of
negotiating of construction contracts for performance of the contract. probable construction cost.
or construction. Performance Specification Subcontractor
Contractor (general contractor) • Standards for product quality, construc- • A person or entity who has direct
• The primary contractor who oversees tion methods or building systems to be contact with the contractor to perform
and is responsible for all the work used in a building project. any of the work at the site.
performed on the site and to whom Prime Contractor Value Engineering
any subcontractors on the same job • A contractor who has a direct contrac- • The process of reviewing elements of
are responsible. tual relationship with the owner for the project design in terms of cost
Contractor Pre-Selection of work, as distinguished from a benefit. Value engineering involves
• Selecting the contractor on qualifica- subcontractor whose contractual substitution of less costly systems or
tions, not price, early in the process to relationship is not with the owner, materials without changing the function
team with the architect for time savings. but with a general or prime contractor. or overall appearance of the building.
Cost Plus Fee
• The contractor in an owner-contractor
agreement is reimbursed for the direct
and indirect costs of performance of
the agreement and, in addition, is paid
a fee for services.
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