- Part 1 – General Administration and Management
- Part 2 – Operations and Maintenance
- Part 3 – Energy, Utilities, and Environmental Stewardship
- Part 4 – Planning, Design, and Construction
Project Delivery
Introduction
For most of the 20th century, the accepted method of delivering construction projects was through the traditional, low-bid design-bid-build (DBB) approach. Building projects were designed by the project architects and engineers, the drawings and specifications were then bid to all interested contractors who could bond the project, and the project was then built by the lowest bidder for the work. This method provided a level playing field for all contractors who wished to compete for the construction contracts involved, and was utilized by all public owners and many in the private sector as well.
The DBB process, however, became increasingly problematic for many owners, as costs escalated, competition intensified, quality became more of an issue, conflicts and litigation became more prevalent, and owners began to look for better ways to do business. In the 1990s, many owners implemented partnering programs in an attempt to increase trust and collaboration among project teams and reduce the adversarial relationships that had become commonplace. The partnering process was quite successful in some cases, and it began the industry's movement toward a generally more cooperative approach to construction projects. But it was a voluntary process that was not supported by contractual requirements, and it was not universally effective. Many conflicts regularly experienced throughout the course of DBB projects continued to pose serious problems for owners across the country.
Late in the 1990s, new proposed methods for increasing project team collaboration and success, such as the design-build (DB) process, were developed and championed by many. New professional associations such as the Design-Build Institute of America (DBIA) began to educate industry members and legislators about new and potentially better ways of doing business. With the DB process, the general contractor and architect/engineer (A/E) team could be selected based on their qualifications; work closely together during project design, providing a single point of responsibility to the owner; and deliver the project quite efficiently and expeditiously. This option was attractive to many owners but required procurement law changes in most states for its legal use. As a number of states began making statutory changes to make DB a legal option, other beneficial alternative project delivery methods began to emerge as well.
One of the most widely utilized alternative project delivery methods, construction manager at risk (CM@R), provides many of the advantages of DB, except that the A/E team retains a direct contract with the owner, which provides more design control and a more objective review of the contractor's work. This process also allows for fast-tracked construction, which uses overlapping design and construction phases to shave months off of a project schedule. Although fast-tracked projects can save time and money, they also present additional risks if changes need to be made during construction.
These alternative delivery methods have been quite successful for a number of owners, providing significant improvements over the traditional DBB approach in many cases. Still, they are not perfect, and in the absence of a true trust-based approach among project team members, serious problems can occur. Cultural and legal differences throughout the many states also have limited the project delivery methods available to many owners, and have led to the use of a number of different types of approaches. Some jurisdictions favor the use of a construction manager with the bidding of fees and general conditions, where the construction manager (CM), who manages the construction process, is selected on the basis of a low bid on his or her fees and general conditions. Many continue to use the DBB approach with the assistance of an agency construction manager, who acts as a consultant who represents the owner during the construction phase. Some states are geared toward the use of multiple prime contracts, where the owner contracts directly with a number of prime subcontractors, who must coordinate their work on the construction site. Still others utilize cost-plus, time-and-material, or unit-price-based contracts in an attempt to pay the actual cost of the construction as it is incurred.
Meanwhile, private sector owners often utilize a negotiated contract for construction, which allows them to informally select and negotiate with the contractor of their choice, in a less formal process that is otherwise similar to CM@R. Public owners generally do not have the flexibility to utilize these less formal private sector methods, because of the need to provide equal opportunities for all qualified bidders to pursue publicly funded contracts.
Many public owners do, however, utilize other alternative approaches to meet specialized needs. The job order contracting process provides an expedited method of performing multiple smaller projects through open-end contracts with selected contractors and subcontractors. Public-private projects provide cost and schedule efficiencies for public projects that can be designed, constructed, financed, and often maintained by private sector developers.
The current leading edge of innovative project delivery methods, however, is referred to as integrated project delivery (IPD). This emerging delivery approach provides new levels of collaboration and efficiency through the integration of the responsibilities, risks, and savings shared between the A/E team, contractor, and major subcontractors. This approach also makes use of the greatest technological innovation in building design since computerized drafting: building information modelling (BIM). New BIM technologies allow the A/E and contractor/subcontractors to work closely together in designing the building architectural and engineering systems, thus saving time and reducing errors. The A/E's design drawings can actually become the subcontractors' coordination/shop drawings utilized for construction. There are many variations in the use of the IPD approach, and a great deal of work is in progress to improve contracts and procedures needed for its most effective use. But many expect the IPD method to be a wave of the future in the realm of innovative new project delivery methods.
This project delivery method chapter will provide a brief summary of the various delivery approaches noted above, with references and links to industry websites and resources that will provide more information in a specific area of interest. Additional general information about the various delivery methods in use can be found in the following locations:
Associated General Contractors of America (AGC): www.agc.org/cs/industry_topics/project_delivery
Construction Management Association of America (CMAA): www.cmaa.com/delivery-method
American Institute of Architects (AIA): www.aia.org/index.htm
Before any of these approaches are attempted, it is important that state laws be consulted for a clear understanding of what is legally allowed. While more states are continuing to legalize the use of many alternative delivery methods, legal counsel should be obtained to ensure that a desired delivery approach is allowable in accordance with applicable state statutes.
In addition to compliance with legal requirements, a project delivery method choice should consider specific project type, size, schedule, and budget conditions, as well as the owner's project management capabilities and political conditions. With all of this in mind, it is hoped that the information in this chapter will provide assistance in the development and use of the project delivery methods that will work best for each specific project.