Construction project delivery methods are often misunderstood and misapplied and the efficiency of each type can vary due to a range of variables. At the end of the day, however, picking the best construction project delivery method depends largely depend upon two factors
(1) the type of project (new construction, renovation, repair, sustainability), and
(2) the characteristics and requirements of owner.
The ultimate success of a deployed project delivery method depends upon the level of collaboration, quality, and experience of the owner and service provider(s) teams and the consistent, comprehensive application of the selected method and associated supporting information technology.
For the purposes of this discussion, a project delivery method is the way construction project is conceptualized, planned, designed, bid, procured, managed, built, and completed thru any warranty period.
As noted previously, owners can, and should, tailor any specified construction delivery method to their particular requirements; however, the final “product” must be adequately communicated to all constituencies and consistently deployed. In short, application of a robust construction delivery method is a process and process is the key to success.
While there are several types of construction delivery methods, the following are representative of five of the most common, most abused, and most efficient.
- Design-Bid-Build (DBB)
- Design-Build (DB)
- CM At-Risk (CMAR)
- Integrated Project Delivery (IPD)
- Job Order Contracting (JOC)
Design-Bid-Build (DBB) is the traditional, most frequently used construction delivery method; however, it also may deliver the least value. While DBB can work for new construction, and certain owner/contractor/architect groups, it has been largely to blame for the uniquely low productivity and high waste associated with the construction and AEC (Architectural Construction and Engineering sectors.
Upfront collaboration between architects, contractors, and owners is the exception vs. the norm. Miscommunication between the design and construction phases occurs frequently since the designs are completed before the construction begins, or even before contractors are selected. As high rates of legal disputes confirm, DBB pits owners, architects, and A/E’s against one another rather than foster collaboration. Cost overruns, project delays, in addition to lawsuits, abound. Bidding processes, ranging from “lowest bid” to extensive qualifications reviews are equally flawed, inefficient and time unreasonably time consuming.
Design/Build (DB) is an attempt to speed the typically inefficient DBB process, and again targets new construction. It can be a somewhat more collaborative process than design-bid-build as the architect and build work together as a team.
The Design/ Build team may be selected without a bidding process, further expediting overall time lines and may involve a firm with in-house architectural, engineering and construction expertise. Alternatively a contractor may be selected by an owner, who will subsequently select design team. Owners may also elect to select the architect first, who in turn will subcontract a contractor. Joint ventures are another avenue, in which the architect and contractor team for the project.
While design-build can expedite projects and encourage collaboration on new construction projects to a certain extent, it shifts risk to contractors and/or AE firms. Based upon the specifics of the Design-Build arrangement, issues between architects and contractors can be mitigated somewhat, though the may still remain in an adversarial position. The main goal of DB is to increase speed with some processes operating in parallel. These processes may not be fully refined, however, and quality is sacrificed for speed. Items can be missed in the scope and/or during the shortened process.
Construction Manager At-Risk (CMAR)
Construction Manager (CM) At-Risk (CMAR) is another method intended to make new construction projects more efficient. In this case, contractors and architects work as a team through a Construction Manager (CM). The CM is responsible for project planning, design, cost estimating, scheduling, and construction. Overall project price is typically fixed. Like Design Build, however, quality issues and conflicts are common.
Integrated Project Delivery (IPD)
Integrated Project Delivery (IPD) is a process intended to encourage an even higher level of collaboration among owners, architects, and contractors for new construction. All parties are brought in from the initial planning stages and risk can be shared among parties. Various types of IPD projects can be developed to meet specific requirements, and multiple case studies exist to support the benefits of improved upfront collaboration and communication.
Job Order Contracting (JOC)
Despite the fact that Job Order Contracting (JOC) has been successfully deployed for approximately twenty (20) years in the DOD sector, it is relative unknown in other markets. JOC is a proven, efficient construction delivery method for facility renovation, repair, sustainability, and minor new construction projects. The focus of JOC is upon collaboration and longer term relationships, with a focus upon performance. With the implementation of JOC and associated supporting technology, estimating and bidding/procurement times are commonly shortened from years/months to weeks.
Job Order Contracting is a competitively negotiated, fixed unit price, indefinite quantity contract construction project procurement method. While now rapidly expanding from the DOD to other public entities (County, State, Local Government, Higher Education, K-12, and Healthcare) the private sector is also beginning to take notice.
Facility Owners negotiate and enter into a competitively bid contract with a JOC contractor for an amount it could potentially spend over a certain time period. Procurement processes are established when putting a JOC program in place. Complete design and specifications may not be required; thus negotiations may be necessary to define processes required to accomplish a specific construction task. A cost guide – a construction cost database of detailed priced tasks – a database including a variety of facilities and physical infrastructure tasks, equipment, and labor, for minor construction, maintenance, repair, and renovation work items – is used as the basis for defining and negotiating task orders and projects. The duration and value of JOC’s vary from 3 to 5 years, with annual volumes up to $100M.
The Construction and Facility Management sectors are faced with a new set of economic, environmental, and technological issues requiring a higher level of collaboration among all constituencies – owners, architects, engineers, contractors, regulatory bodies, and the general community. The ability to more efficiently conceptualize, create, cost, prioritize, start, and report on construction projects is needed to attain greater economic competitiveness and to address global climate change.
Organizations electing to remain with the status quo with respect to traditional construction planning and project delivery methods risk falling short on these goals and being left behind.