Design-Build Procurement Process

Kenneth Strong & Charles N. Juliana
July 7, 2008 — 1,657 views  

The Design/Build and DBB procurement processes are similar in that the Owner hires a Contractor to build a project in each, but the two systems differ as to the stage at which the design is provided to potential bidders. The following is an example of the typical steps involved in the D/B project procurement process:

Step 1 Strategic Facility Planning - The Owner analyzes its current and future facility requirements to determine the appropriate facility development plan for the planned use.


Step 2 Program Definition - The Owner establishes the project requirements in terms of facility size and performance, criteria, finish requirements, quality standards, applicable codes, regulatory standards, population/capacities, equipment requirements, etc. These requirements are defined and articulated either by in-house professional staff or by an outside consultant.

Step 3 Request for Qualifications (RFQ) - Professional, financial and experiential requirements for Proposors and the general project parameters are articulated in an RFQ, either by in-house staff or by an outside consultant.

Step 4 Qualifications Statement - The Owner advertises the project and receives and reviews qualification statements in response to the RFQ. Generally the three, and no more than five, most qualified firms are short-listed.

Step 5 Request for Proposals (RFP) - The Owner solicits design and cost proposals from the short-listed design-build teams in a RFP. Among the items found in a typical RFP are project design criteria, site information, contract requirements, selection procedure and proposal (submittal) requirements.

Step 6 Pre-Proposal Conference - Some owners hold this optional meeting early in the proposal preparation period to allow Proposors to ask questions and request clarifications.

Step 7 Proposal Submission and Evaluation - Once received, the Owner evaluates proposals on the basis of quality of design, price and other predetermined factors (best value). The Owner may request that the Proposors make in-person presentations to the Owner's selection panel.

Step 8 Contract Award - The selected Proposor enters into contract(s) with the Owner, which incorporates both the Owner's requirements and the Design-Builder's proposal.

Step 9
Documents/Construction - Upon completion of the design documents for all elements (or for specific phases) of the project, construction commences. The contract may provide for fast-track methods, allowing construction to proceed after logical phases of design and permitting are completed, but prior to completion of the entire body of construction documents.


Step 7 above, Proposal Submission and Evaluation, is the best chance the Owner will get to ensure that it gets the project it wants and the best value for its money. Best value considers both qualitative factors (i.e., design solution, management and schedule) and price. In the submission/evaluation process, qualitative factors and price are considered on a formula basis.

The Owner should appoint a selection panel to perform the qualitative rankings. Generally, this is the same committee and/or panel that the Owner used to determine the most qualified Proposors. There are several methods the panel can use to evaluate the proposals; six of these are discussed below. Each has been successfully used and each has its merits, though no single process is appropriate for all situations.

1. Weighted Criteria - The RFP requires submission of a qualitative proposal and firm price. The Owner establishes a point rating for qualitative factors and for price. (For example, qualitative factors may weigh 60 points, and price 40 points.) The Owner receives the qualitative proposals and the price proposal simultaneously. The price proposal is contained in a separate envelope. The Owner may then hear oral presentations from each Proposor. The Owner assigns points on a scoring matrix for each Proposor's response for each of the evaluation factors. After the Owner evaluates the qualitative criteria, it reviews the price proposal envelopes. Maximum price points are assigned to the lowest dollar bid, and all others are scaled inversely proportional to that amount. High total points then determine the award.

2. Adjusted Low Bid - A variant of the weighted criteria process is the adjusted low bid. The process follows the same steps through receipt of qualitative proposals. Following the oral presentations, qualitative aspects are scored and totaled on a scale of 0 to 100 scale expressed as a decimal (e.g., a score of 85 is written 0.85). After calculating the scores, the Owner opens each bidder's price envelope. Price is then divided by score (expressed as a decimal) to yield an "adjusted bid".

3. Equivalent Design/Low-Bid - This evaluation procedure parallels the two previous processes up to receipt of qualitative proposals. The Owner critiques the technical proposals, and gives each Proposor a deadline to respond with specified design changes and corresponding price amendment (either add or deduct) in order to make all proposals technically equivalent (referred to as "technical leveling"). Revised designs are evaluated by the Owner, which then opens the price envelopes, both base and amendments. Award can be made with heavy or sole emphasis on price because the proposal critique should have resulted in equivalent designs.

4. Fixed Price/Best Design - Contract price is established by the Owner and is stated in the RFP. The Proposers then submit only qualitative or technical proposals, as all price offers are identical. Following oral presentations (optional), the Owner uses its evaluation criteria to score the proposals. Award goes to the firm offering the highest scoring proposal for the stipulated price.

5. Meets Criteria/Low Bid - This method of evaluation most closely resembles the traditional bid process. Typically, the RFP provides specific requirements, but fall short of final construction documents. The Owner solicits proposals from qualified firms, and evaluates those proposals to ensure that they meet the base criteria. The Owner then awards the contract to the low bidder. The selected firm's role is to complete construction documents in a reasonable manner rather than to develop a unique design for the project. The weakness of this process is that it eliminates two of the most advantageous features of design-build: multiple design solutions and the creativity/ innovation of competing design-build teams. It is best suited for procurement of utilitarian facilities (e.g.: storage sheds, pre-engineered buildings, etc.).

6. Emergency Award - As the name implies, when public safety or welfare is threatened, a public Owner may authorize negotiations with the best-qualified design-build firm available at the time, using references and/or previous Owner experience with the firm as justification for the selection. As stated at the beginning of this section, the above-described steps are generic and optional - an Owner can decide to use or not use any or all of them. But they do provide an overview of a process that project Owners have successfully used in the past.

Kenneth Strong & Charles N. Juliana

Gordon & Rees LLP