Understanding Two Distinct Project Delivery Methods, Design-Bid-Build and Design-Build

When embarking on a construction project, one important decision is selecting the best delivery method for your design. The two most popular approaches are Design-Build (DB), which continues to rise in popularity, and the more traditional Design-Bid-Build (DBB). While each has pros and cons, the primary difference comes down to how your project team will be structured.

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Under this commonly practiced approach, a project is separated into three phases: design, bid, and construction. Industry experts claim that DBB is suited to linear project sequences where one step is completed before the next begins, and for projects where owners need complete design control.

Advantages of Design-Bid-Build

According to Bobby Degregorio, Vice President of Business Development at ESI Group, DBB offers several advantages:

  • Clear Role Expectations: Design and construction responsibilities are clearly defined and divided between the de- signer and the contractor. Contractors typically join the project during the construction phase, having minimal involvement in the design process.
  • Competitive Bidding: Contractor bidding occurs after a full design is complete. Bidders review final scopes of work and offer value engineering to reduce costs. While competitive bids save money, it’s important to evaluate factors beyond price, such as experience and qualifications, to achieve a balance between cost, quality, and project outcomes. “In exceptional market conditions, where contractor availability is in high demand, DBB’s competitive bidding advantage weakens,” says Degregorio. “Contractors are more selective and offer higher pricing, potentially reducing cost savings The lowest bidder may not always deliver the highest quality or meet all project requirements.”

Disadvantages of Design-Bid-Build

The competition among bidders in the DBB model can result in several disadvantages:

  • Sequential Process: A process with distinct phases can lead to longer project durations. “The sequential nature of DBB, with separate design and construction contracts, can introduce additional costs related to coordination, change orders, and potential disputes between parties,” says Degregorio. For time-sensitive cold storage projects, this sequential process may not be ideal.”
  • Limited Collaboration: DBB does not encourage early collaboration between the contractor, designer, and owner. Without contractor input during design, the potential for constructability issues and cost-effective design solutions may be limited, potentially impacting project costs.
  • Potential for Change Orders: Unforeseen challenges or modification/deviations during construction may result in change orders, disrupting the project schedule and potentially increase costs due to rework.
  • Design Clashes: There may be clash- es or inconsistencies between the owner’s requirements, the designer’s vision, and the contractor’s understanding. This can lead to rework, impacting timelines and budgets.
  • Risk Allocation: Design and construction risks are allocated separately. This can create challenges when resolving disputes between the designer and the contractor, potentially leading to conflicts over design responsibilities, liability, and warranty issues, affecting the overall project execution.

The alternate and more productive approach is Design-Build. Here, a single entity — design-build contractor or design-builder — is responsible for the design and construction of the project. Early and frequent collaboration between the owner, architects, engineers, estimators, trades, and construction disciplines work together to streamline the process.

Advantages of Design-Build

The Design-Build Institute of America estimates that up to 47% of all construction spending will use DB by 2025, which is not surprising considering these advantages:

  • Consistent Budget and Cost Savings: Involving contractors early in the process leads to a more reliable budget. The owner may be eligible for all or a portion of any cost savings tied to how the contract is negotiated. Project scope adjustments can be made late in the design process to reduce costs.
  • Faster Timeline: DB’s integration and concurrent design and construction aspects often lead to faster project completion than other delivery methods. Some put project completion rates (on average) at 102% faster than DBB1.
  • Quality of Work: The owner can select contractors based on qualifications and quality, not just price.
  • Reduced Owner Risk: Contractual obligations ensure a design that meets the owner’s needs and eliminates conflicts.
  • Streamlined Communication: Clear lines of collaboration between the owner and the design-builder minimize potential miscommunication and delays.
  • Full Transparency: Rumor has it owners give up control over their build under the DB model, but the opposite is true. Owners can decide how involved they would like to be in the process and can participate in the bidding process to review and select contractors.

Disadvantage of Design-Build

While the use of DB continues to grow, some believe it lacks historical data to back up its benefits. Degregorio says most general contractors prefer DB, however some could view the following as a possible disadvantage:

  • Early-Stage Decision Making: DB requires certain project decisions to be made relatively early, potentially before the project owner may have a complete understanding of the design implications or budget constraints.

The choice between DB and DBB depends on project complexity, timeline, and the owner’s priorities, says Degregorio. DB offers streamlined communication, faster project delivery, and reduced owner risk. On the other hand, DBB calls for sequential planning and the competitive bidding process may wind up costing more in the end. He says: “Understanding the characteristics of each method enables project owners to make a more informed decision when selecting the most appropriate project delivery method.”

Reference

  1. Design-Build Institute of America – CII/Pankow 2018.

Quick Facts

During 2016-2020, 42% of US-based construction projects used DB and 23% used DBB.

DB projects will reach over $400 billion in value by 2025. 

DB projects complete 33.5% faster and cost 6% less than DBB projects

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