Design-Build at 20 Emerging

Trends and Lessons Learned in the

First 20 years of Design-Build

Integration is Our Foundation"

Copyright 2013

Design-Build
Project Spotlight

What is
Design-Build?
Nationals Baseball Stadium, Washington,
DC the nations first LEED certified
sports stadium.

What is Design-Build?
Design-Build is a method of project delivery in
which one entity (design-builder) forges a single
contract with the Owner to provide for
architectural engineering design services and
construction services

. were talking about integration of

design/engineering/construction and NOT
simply assigning tasks!

The Traditional Way Design-BID-Build

Design-Bid-Build

Contract

Plans

Two contracts are used to

accomplish design and
construction.

Specs

CONTRACT WITH
ENGINEER

Emphasis on Compliance: You

Low Bid

THIS IS WHERE
THE COST
COMPETITION
TAKES PLACE

Contract

CONTRACT WITH
CONSTRUCTOR

are buying a Product

The Better Way Design-Build

Design-Build
a single contract is used to accomplish
design and construction.
THIS IS WHERE THE ENTIRE COMPETITION TAKES PLACE
CONTRACT WITH DESIGN-BUILD TEAM

Great
Past
Performance

Innovative
Ideas

Creative
Approach

Contract

Within the Owners Established Budget

Plans
Specs
Emphasis on Behavior: You

are buying a Service

SUDDENLY -A HEATED EXCHANGE TOOK PLACE

BETWEEN THE KING AND THE MOAT CONTRACTOR

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Design-Build
Project Spotlight

History of
Project Delivery
Systems
I-35W Replacement Bridge
Minneapolis, MN.

History of Project Delivery

Origins of the Master Builder

The Rise of Professionalism
Effects of the Industrial Revolution
Professional Societies
Legal Separation of Design &
Construction

Project Delivery Historical Perspective

Vitruvius 1st
Doc. Of
Design &
Construction
Code of
Hammurabi

1795 40
B.C. B.C.

Alberti First
modern day
architect

Brunelleschi
quintessential
design-builder

1412

Rise of
Professional
Societies

Brooks
Act

Passage of
Federal
Acquisition
Reform Act

CURT
1st WP Calling
for Wholesale
Change

DBIA
Designation
Program

AIA-CC
IPD Model

1972 1980s 1993 1996 2002 2004 2006 2011

Separation
Industrial
Revolution

Public Sector
Design-Build

Establishment
of DBIA &
MOP

Private Sector
Design-Build

1456 1850s 1935 1960s

Master Builder
Renaissance

Miller Act
Separation
Design &
Construction

Integration
Information Age

History of Project Delivery:

The Master Builder
Code of Hammurabi: Obligation of design
& construction to society (1795-1750 BC)
Vitruvius: Documentation of design and
construction practices (40 BC)
Brunelleschi: quintessential DesignBuilder & innovator (1377-1446)

History of Project Delivery:

The Rise of Professionalism
Alberti: first intentional separation of
the art from the craft (1456)
Established architecture as a
profession distinct from the science of
engineering & construction
From the 15th century into 19th century,
Architects retained responsibility for
both design & construction

History of Project Delivery:

The Evolution of the Industry
1852

ASCE American Society of Civil Engineers

1857

AIA American Institute of Architects

1918

AGC Associated General Contractors

1948

CSI Construction Specifications Institute

1950
ABC Associated Builders & Contractors

AIC American Institute of Constructors

1966

1971

CMAA Construction Management Assoc. of America

ASA American Subcontractors Association

1982

USGBC US Green Building Council

DBIA Design-Build Institute of America

1993
1993

LCI Lean Construction Institute

CURT Construction Users Roundtable

1997
2000

Return to Integration
DBIA founded in 1993 to help
standardize and advocate for an
already emerging design-build
industry

Integrated Project Delivery (IPD)

Building Information Modeling (BIM)
Sustainable Design (Green/LEED)
High Performance Contracting (LEAN
- Toyota Production Model)
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History of Project Delivery:

Professional Societies
Greater professional specialization
Increase in specialized knowledge
Promotion & advocacy of professional
interests & markets
Ethical standards of practice
Rise of conflict-of-interest issues

What are Federal Officials Saying about Design-Build

Jag R. Bhargava, Deputy Director, GSA

With only four years between groundbreaking and full occupancy,
we had to find a way of doing it. The only method I could think of
was design-build. On the new Census building.

Pete Swift, Deputy Chief, Design and

Construction Branch
We at the Federal Bureau of Prison have been doing design-build
since the FAR regulations changed. Our primary reasons back then
were that we would eliminate a lot of the claims we were getting and
we had a large workload. Over the years we have not had a claim on
any design-build project we have done.

What are Federal Officials Saying about Design-Build?

Joseph Gott, Chief Engineer and Director of Capital

Improvements, NAVFAC
At NAVFAC, we do about 75 percent of new construction designbuild. The largest reason we select a project for the design-build
delivery vehicle is the single point of accountability and responsibility.
We have an A/E and a design-build constructor on the same team and
have a contract with one company.

Paul Parsoneault, Construction Management Team Leader,

Military Programs Branch, USACE
There was no way possible to execute an historically large mission
using the traditional delivery system. We determined that, in terms of
the Army, the default delivery system is designed-buildPrimarily
because we can deliver more quickly, we can leverage the innovation
of industry to provide us with the most cost effective solutions to our
requirements.

Design-Build Utilization

Federal Agencies using Design-Build 75%+ :

Navy Facilities Engineering Command
Army Corps of Engineers
State Department
Bureau of Prisons

Other Federal Agencies Using Design-Build

General Services Administration

Veterans Administration
Department of Agriculture
Department of Interior

Design-Build Meets Your Requirements

Fully Competitive
Fast Start-Up Schedules get met
Lower Cost
Higher Quality
Greater Owner Satisfaction
Reduces litigation, change orders and cost
growth
Meets budget constraints
Improves Americas competitiveness
Puts people to work faster, finishes
work faster, costs less

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Design-Build Performance
(Comparison of Design-Build vs. CM-at-Risk vs. Design-Bid-Build)

6% Lower Cost
12% Faster Construction Time
33% Faster Project Completion
Higher quality in all measured categories
SOURCE: Construction Industry Institute (CII)/Penn State Research
comparing 351 projects ranging from 5K to 2.5M square feet. Projects
were of various types and from various industries.

Delivery System Study

Construction Industry Institute (CII)/Penn State 1999

Examined influence of 19 factors on:

Several types of delivery systems
Cost control
Schedule control
Construction speed
Delivery speed

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Comparison of Project Delivery Methods (CII/Penn State Study)

Metric

DB vs.
DBB

CM@R vs. DB vs.

DBB
CM@R

Unit Cost

6.1% lower

1.6% lower

4.5% lower

Construction Speed

12% faster

5.8% faster

7% faster

Delivery Speed

33.5% faster

13.3% faster

23.5% faster

Cost Growth

5.2% less

7.8% more

12.6% less

Schedule Growth

11.4% less

9.2% less

2.2% less

Re: Comparison of U.S. Project Delivery Systems, Mark Konchar & Victor Sanvido, Journal of Construction
Engineering and Management, Vol. 124, No. 6 (1998), pp. 435-444.

Comparison (continued)

Research Study

CII Penn State (US)

Reading DB Forum (UK)

Parameter

DB vs. DBB

DB vs. DBB

Unit Cost

6% Less

13% Less

Construction Speed

12% Faster

12% Faster

Delivery Speed

33% Faster

30% Faster

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Comparison for Quality

D-B delivers equal or higher quality

D-B out performed traditional D-B-B in every category on a
10 point scale
Startup
Call Backs
O&M
Exterior & Structure
Interior
Environmental
Equipment

Design-Build Performance (Transportation)

(Comparison of Design-Build vs. CM-at-Risk vs. Design-Bid-Build)

11% Lower Cost

36% Faster Project Completion
Higher quality in all measured categories

Ralph Ellis, Zahar Herbsman & Ashish Kumar, Evaluation of the Florida DOTs Pilot Design-Build Pilot
Program. University of Florida, College of Engineering, Gainesville, FL.

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Making the Design-Build Decision

Design-Build
Project Spotlight

Where is the
Industry Headed?

Carilion Roanoke Memorial Hospital

Roanoke, VA

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Design-Build State Public Procurement

Map 1993

15

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Design-Build
Project Spotlight

Distinguishing
Project Delivery
Systems
Lake Pleasant Water Treatment Plant
Phoenix, AZ

Project Delivery Defined

A comprehensive process including planning, design,
construction & other services, necessary for organizing,
executing & completing a building facility or project
Three fundamental Owner decisions:

What Project
Delivery
System?

What
Procurement
Method?

What
Contract
Format?

Developing the Acquisition Strategy

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Familiar Project Delivery Methods

Design-Bid-Build (D-B-B)
Sometimes called Traditional

Construction Management at Risk (CM@R)

Also known as CM/GC

Design-Build (D-B)

Importance of the
Project Delivery Method
Establishes when the parties become engaged
Influences the choices of contractual
relationships among the parties
Influences ownership & impact of changes &
modifications of project cost

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Project Delivery
Always 3 basic parties involved in the
project delivery process:
Owner
Designer
Contractor

Design-Bid-Build
Contractual Relationship
Characteristics

Three linear phases:

Design, bid and build
Three prime players:
Owner, designer,
constructor
Two separate contracts:
Owner to designer

Owner

Designer

Contractor

Owner to constructor

Responsibilities
Owner Program, finance, management
Designer Prepares plans & specs, normal
services
Constructor Prime & sub construction

SubConsultants

SubContractors

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Why Owners Might Choose

Design-Bid-Build (D-B-B)
Owner has control over the entire process
A/E works directly for Owner
The contractor works directly for Owner
Allowed in public procurement

CM-at-Risk Contractual Relationship

Characteristics

Three linear phases: Design, bid,

build or may be fast tracked
Three prime players:
Owner, designer, CM-constructor
Two separate contracts:
Owner to CM-constructor
Owner to designer

Responsibilities
Owner Program, finance

Owner

Designer

SubConsultants

CM-GC

SubContractors

CM-Constructor Provides pre-construction & project

management services, coordinates

design prior to construction, is prime with
the subcontractors

Designer

Two Part Contract

Pre-Construction Services (Design Assist)
& Construction

All normal services

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Why Owners Might Choose

CM-at-Risk (CM@R)
A/E works directly for Owner
More professional relationship with Contractor
Earlier knowledge of costs
Earlier involvement of Constructor possible
Two contract system is less change for Owner
Project delivery faster than traditional Design-Bid-Build
Works well for:

Projects governed by significant schedule constraints

Projects requiring complex phasing
Projects containing budget limitations requiring a construction
cost guarantee during design
Projects that will benefit from value engineering

Design-Build Contractual Relationship

Characteristics

Integrated process-overlapped
design & construction
Often fast tracked
Two prime players:
Owner & design-build entity
Entity can take on many forms
One contract Owner to Design-Builder

Owner

Design-Build
Entity

Responsibilities
Owner Program, performance
requirements, & finance*
Design-Builder Design & construction. Can
include programming & post
construction services

A/E - Sub
Consultants

SubContractors

* D-B can expand services to include

programming, finance, operate, etc

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Design-Build Entity Structural

Arrangements

Integrated firm
Contractor led
Designer (A/E) led
Joint Venture
Developer led

Integrated DesignBuilder
28%

Contractor-Led
54%
Designer-Led
13%
Joint-Venture
5%

Source: Zweig White

Percentage of Design in the RFP

CRITERIA DOCUMENTS
(Describes End Result)

BRIDGING DOCUMENTS
(Prescribes How To Achieve End Result)

Pre-Design
Design-Build
-10% to 5%
Design Criteria
Design-Build
5% to 20%

Preliminary
Engineering
Design-Build
20% to 35%
Design/Draw-Build
35% Design or Greater

-10% -5%

Pre-Design

0%

5%

10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70%

Design

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Why Owners Might Choose D-B

(continued)
Single point of responsibility for Owner
Professional relationship with Contractor & Designer
A/E & Constructor on the same team providing unified
recommendations to Owner
Errors are addressed - not used as excuses or claims
Early Constructor involvement enhances constructability
The Owner needs an early cost commitment
Project will benefit from value engineering & innovation
Project requires a construction cost guarantee during design
Complex Project - requiring close coordination of design &
construction expertise

Why Owners Might Choose D-B

(continued)
Fewer changes, fewer claims & less litigation
The Owner considers controlling project risks under one entity
a high priority
Allocate risks to those who can best manage
Owner out of middle
Earlier knowledge of firm costs
Design submission & pricing project at proposal stage possible
Faster, more cost-effective delivery system
The Owner wishes to fast track the project
Project requires complex phasing
Owner is able to specify performance requirements &
specifications

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Contractor Involvement . . . When?

Speed to market considerations
Design & Bid

No Project Contractor
Involvement

Construction

Design-Bid-Build

Overlapped
design &
construction

Construction

Design & Bid

Extensive Contractor
Involvement Possible

CM-at-Risk

Contractor Involvement When?

Design & Bid

No Project Contractor
Involvement

Construction
Key Subs
included in
design phase

Design-Bid-Build

Construction

Extensive Contractor
Involvement

Design-Build

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Who is Responsible for

Plans & Specs?
Spearin Doctrine
Implied warranty of sufficiency of plans & specs
1918 Federal case - dry-dock in the Brooklyn Navy Yard
Contractor relied on government provided plans & specs
Now widely accepted Federal & most states
2 warranties by Owner
the plans & specifications are accurate
they are suitable for their intended use
Reliance had to be reasonable

Design-Build
Project Spotlight

Procurement
Methodologies

Navy Yard Metro West

Washington, DC

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Procurement Options
Limited Competition

Sole Source (direct)

Negotiation
Open Competition
QBS (Qualifications-Based)
Price and design are not selection factors
BVS (Best Value)
With Criteria Documents
Owners criteria provided to shortlisted proposers
Selection based on qualifications, technical solution &
price

With Bridging Documents

Plans & specs are developed beyond +/- 20%
Usually leads to low price selection

Low Bid

Sole Source
Description
Common private sector approach
Commence with professional services to
establish project scope, budget & schedule
Contract format options are cost plus, GMP,
target price or lump sum
Not
Not generally
generally
applicable to
applicable
Public Sector
to public
work.
sector

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Sole Source
Owner approaches only one firm; no competition
Often used when Owner & Builder, CM, or DesignBuild firm have a long-standing business
relationship
Also used when only one firm can provide highly
specialized services
Also used for emergency situations

Open Competition: Qualifications-Based

(QBS)
Description
Competitive process based on qualifications &
project approach ONLY - No price
Commence with professional services to
establish project scope, budget, & schedule
Contract format options are cost plus, GMP,
target price or lump sum
More & more Owners are
turning to QBS due to
control of selection process
& less resources for
implementation

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QBS Keys to Success

Set aside traditional selection processes
Develop clear definition of project
requirements
Administer selection process professionally
Use balanced contract language
Let reward reflect risk
Ensure early involvement of Design-Builder

QBS Key Considerations

Allows Owner benefit of early contractor
involvement in the programming stage
Owner has significant control & collaborative
environment with Design-Build team
Competitive process
Procurement process can be simple & non-intensive
Ability to secure competition through equipment &
construction packaging under cost based contract
formats
May not be applicable to public sector work due to
procurement laws (depends on local authority)

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Open Competition: Best Value (BVS)

Best Value selection - combination of
qualifications, technical & cost criteria
(Qualitative & Quantitative)

Best Value ranges from qualifications-oriented

to price-oriented selections
Best practice is 2-phase process
RFQ - Shortlist based on qualifications
RFP Proposals include price, technical approach, &
design

Best Value Keys to Success

Set aside traditional processes/relationships
Shortlist offerors
Consider the need for an Owners Design-Build
consultant
Provide criteria in lieu of bridging documents in RFP
Develop performance-based criteria in lieu of
prescriptive specifications
Limit design direction in RFP
Provide a stipend (honorarium) for shortlisted teams
not selected

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Best Value Keys to Success

(continued)

Ask for reasonable submission requirements

Adequately disclose selection criteria & weighting
Consider financial requirements of proposals
Best value vs. low price emphasis on scoring

Best Value Keys to Success

(continued)

Balance responsibility/risk in contract language

Disclose project budget & schedule
Conduct a balanced evaluation
Establish adequacy & certainty of funding
Create unbiased, knowledgeable selection
panels

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Best Value Keys to Success

(continued)
Conduct separate evaluation of price &
qualitative factors
Promptly award the contract
Debrief unsuccessful offerors
Use lump sum contracts when selection is
based predominantly on price

Best Value Key Considerations

Provides Owners significant flexibility while
maintaining competitive environment
Opportunity to optimize aesthetics &
performance for a given price
May limit Owner collaboration with project
team during the selection process
Procurement process may be time
consuming & resource intensive

31

Low Bid

Description
Competitive
Award criteria price based
selection with lowest
responsive bid &
responsible bidder
Using low bid in D-B has
implications for the Owner

Low Bid Key Considerations

Traditional
Non-subjective selection
Review process is fast & simple
Loss of Owner control of design after contract award
Loss of Owner collaboration opportunities with project
team
Price driven selection
Preparing for procurement process is time consuming
& resource intensive
No incentives for innovation or exceptional performance
Youll get what you paid forno more, no less

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Design-Build
Project Spotlight

Choosing the
Right Project
Delivery System
EPA Region 8 Headquarters
Denver, CO

Which Project Delivery Method is Best?

Each construction project has a unique
combination of factors:
Project-specific factors
Organization-specific factors

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Which Project Delivery Method is Best?

(continued)
There are a number of relevant questions an
Owner needs to answer in choosing a delivery
system:
An Owner must make an objective assessment
of factors surrounding each project
An Owner needs to understand the benefits &
drawbacks of each delivery method

Which Project Delivery Method is Best?

(continued)
The decision should be directly related to the:
Attributes of the project to be undertaken
Ability of the Owner to staff the project
appropriately
Program & performance issues that the
Owner has identified for the project

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Process for Selecting an Approach

Matching Owner & project characteristics
to project delivery system options
Matrix approach
Brainstorming sessions
Computer-based programs

Sample Matrix
Criteria
Schedule
Flexibility

Criteria
Weight

DBB

25

Owner design
control

20

10

Awarding on
best value

18

15

12

Establishing
early price

10

Totals

100

Low initial cost

Promoting
team work

MultiPrime
6

9
100
200
3

9
135

144
6

75
7

36
2

587

120

144

135

48

150
6

120

54

Other

6
200

54

DB

150

225
10

50

CM at
Risk

90
8

84
7

96
9

20

70

90

670

643

690

Rank each delivery method relative to criteria

on a scale from 1 (low) to 10 (high)

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Design-Build PLUS
The Design-Build entity can contract to provide
added services beyond design & construction
services:

Financing & asset management

Feasibility studies
Site acquisition
Planning & Programming
Supply chain analysis
Design-Build Maintain & Operate
and various combinations of the above

When Design-Build Goes Wrong

72

36

Worst Practices
Three most important Worst Practices to avoid:
Vague or gone-too-far Bridging/RFP
(limits creativity, exposes Owner/Agency to change
orders)
Inviting many D-B teams to design for free if stipends
are inadequate
(exploits designers)
Low-price-only selection, closed books
(low-ball bids limit quality, induce change order claims
and reduce design to minimal drafting)

D-B Team Selection Worst

Practices
Too many on selection committee
No interviews, or separate interview days,
or interviewing more than three teams
Selection Process changed midstream
Complex points scoring system
Low price is the sole criterion
Subcontract terms set after selection

37

Teaming Risks Worst Practices

GC and A/E join up after RFP is issued
D-B team has little or no pre-proposal
interaction with the Owner/Agency or each
other
A/Es are at-risk for costs of proposal design
effort (little or no stipends)
Design contract and/or fee arrangements are
not defined until award

In Summary
Project delivery selection is critical to
overall project success
Project delivery method selection is not
arbitrary
Best practice:
Early planning & a complete understanding of
the various project delivery, procurement, and
contracting options

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Design-Build Institute of America

Design-Build Institute of America is a Registered Provider
with The American Institute of Architects Continuing
Education Systems. Credit earned on completion of this
program will be reported to CES Records for AIA
members. Certificates of Completion for non-AIA member
are available on request.
This program is registered with the AIA/CES for
continuing professional education. As such, it does not
include content that may be deemed or construed to be
an approval or endorsement by the AIA of any material of
construction or any method or manner of handling, using,
distributing, or dealing in any material or product.
Questions related to specific
materials, methods and services will be addressed at the
conclusion of this
presentation.

For More Information . . .

Richard Thomas
Director, State/Local Legislative Affairs
rthomas@dbia.org
Design-Build Institute of America
1331 Pennsylvania Ave. NW
4th Floor
Washington, DC 20004
202-682-0110
www.dbia.org

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