Selecting the Right Construction Project Delivery System

Joseph Hardesty
July 7, 2008 — 1,846 views  
For a construction project to get off on the right foot, it is important for the owner to select the right project delivery system.  There are a wide range of construction project delivery systems.  These include the design-bid-build system, the design-build system, the construction management model, and other methods such as program manager and bridging.  Each of these systems has its advantages and disadvantages which the owner must consider before the project begins.

Design-Bid-Build

The design-bid-build project delivery system is the traditional method that has been used for many years in both public and private construction projects.  It is the project delivery system that is most widely used today and which is still required by some states.  The design-bid-build process is a well understood delivery system in which risk is minimized through the owner's firm control of both the design and construction phases.  The design-bid-build process offers checks and balances between the construction participants.

Under the design-bid-build project delivery system, the owner contracts separately for the design and construction of the project.  The owner contracts directly with a design professional for the preparation of plans and specifications and assistance in the bidding stage.  The design professional may also provide oversight of the project during the construction phase.  The owner enters a separate contract with the general contractor for the construction of the project.  Under the design-bid-build project delivery system, the owner retains responsibility for overall project management.  All contracts are executed directly with the owner.  The design of the project is complete before the contractor is selected and the contractor is generally selected through a competitive bid process with the assistance of the design professionals.

Some of the advantages of the design-bid-build process are that it provides checks and balances between the design and construction phase of the project, it is widely used and familiar to construction participants, and it is perceived to be a fair process in which the lowest most responsible contractor is selected for the construction of the project.  Additionally, the owner is able to provide significant input into the process during the design phase.  When a competent contractor commits to a lump sum price, the owner can normally rely upon the accuracy of the price and the owner is able to compare bids to obtain the best price for construction. 

Some of the disadvantages of the design-bid-build process are that it is a lengthy process, it places the owner in the middle of disputes between the contractor and design professionals, the cost of construction is unknown until bids are finalized, and it intensifies the potential for change orders.  The process requires a significant economic commitment by the owner at the front end of the project by requiring the owner to complete the design before bidding the construction of the project.  Because the plans and specifications are completed prior to bidding the construction phase, there is a potential that bids for construction may exceed the owner's budget and hence require the owner to either redesign or abandon the project.  

Design-Build

The design-build project delivery system is a system whereby the owner enters into a contract with a single entity that will assume the obligation of furnishing design, supervision and construction services during the project.  The design-build project delivery system is an attractive alternative to the design-bid-build system because it provides a single point of responsibility for design and construction.  It has the advantage of taking the owner out of the middle of disputes between the contractor and design professionals.  It has the disadvantage, however, of eliminating the checks and balances which occur when the design and construction phase are contracted separately.  The owner also loses a good bit of the control that it has on the project under the design-bid-build process and also loses the direct advisory relationship with the architect that it has in the design-bid-build process. 

Construction Management

The construction management project delivery system is a process by which a "construction manager" is added to the construction team to oversee some or all of the project.  The construction manager can be involved in overseeing scheduling, cost control, construction, bidding, or the entire project.  In many ways, the construction management process is not, by itself, a separate construction delivery system but is a resource the owner can use to assist in the construction project.  The added cost of a construction manager must be weighed against the benefits this consultant brings to the project.  Often, the architect can fulfill the role provided by a construction manager.  However, depending upon the degree of sophistication of the owner's in-house construction staff, and depending upon the complexity of the project, a construction manager can provide an essential element to the construction project.

A construction manager is most useful on a large, complex project which requires a good deal of oversight and coordination.  A construction manager is also helpful to an owner who does not have a sophisticated in-house construction team.  A construction manager can help the owner control costs and avoid delays on complex projects. 

The owner must weigh the relative advantages and disadvantages of each construction delivery system before beginning the project.  Factors that the owner should consider are the complexity of the project, the relative importance of cost or schedule and the in-house expertise the owner has to manage the project.

Joseph Hardesty

Stites & Harbison PLLC