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An Introduction To Design-Build

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Presentation on theme: "An Introduction To Design-Build"— Presentation transcript:

1 An Introduction To Design-Build
2003 Edition Copyright © DBIA 2003

2 Design-Build Overview
D-B Defined/Introduction Milestones in Recent D-B History Major Project Delivery Systems D-B Performance, Procurement and Process D-B Utilization continued

3 Design-Build Overview, continued
DBIA Resources DBIA Publications/Website: DBIA Contracts D-B Legislation/Trends

4 Design-Build Defined 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. (Design-build is also known as design/construct and single source responsibility.)

5 Design-Build Introduction
Rediscovered approach to project delivery Team of qualified design and construction professionals Operating under a single contract Single source accountability

6 Milestones in Recent Design-Build History
1940s Naval Facilities Engineering Command uses the Capehart and Wherry Housing Programs that employ design-build 1962 National Aeronautics and Space Administration (NASA) uses design-build 1968 Department of Housing and Urban Development starts use of forms of design-build: Turnkey, Operation Breakthrough 1969 Associated General Contractors (AGC ) appoints “Turnkey Committee”

7 Milestones in Recent Design-Build History
1972 Congress Passes Qualifications-Based Selection (Brooks Act) for A/E Contracts 1975 AGC Publishes first edition of Standard Agreement Between Owner and Design-Builder 1978 The American Institute of Architects (AIA) adopts a policy permitting members to do design-build 1984 Competition in Contracting Act places competitive negotiation on par with competitive sealed bonding 1985 AIA publishes family of design-build documents

8 Milestones in Recent Design-Build History
1986 Military Construction Authorization Act permits trial use of design-build: Each branch is permitted to use design-build on three projects a year 1990 General Services Administration issues Design Criteria Project Guide 1991 AIA adopts policy acknowledging the use of design-build in the public sector 1993 Design-Build Institute of America established

9 Milestones in Recent Design-Build History
1995 Engineers Joint Contract Documents Committee (EJCDC) issues design-build contracts 1996 Legislation (Davis Amendment) enacted permitting use of two-phase selection for federal design-build projects

10 Major Acquisition/ Project Delivery Systems
Design-Bid-Build Construction Management Design-Build Project Delivery: A comprehensive process including planning, design, construction and other services, necessary for organizing, executing and completing a building, facility or project.

11 Acquisition/Project Delivery Systems
Design-Bid-Build A/E prepared plans and specifications Low dollar bid from general contractor Separate contracts from owner for design and construction Owner A/E Constructor Design Consultant Subcontractors and Suppliers

12 Acquisition/Project Delivery Systems
II. Construction Management Agency construction management “At-risk” construction management Separate contracts for design and construction Agency CM At-Risk CM Owner Owner Agency CM A/E GC/Trade Contractors A/E GC/Trade Contractors Design Consultant Specialty Contractors And Suppliers Design Consultant Specialty Contractors And Suppliers

13 Acquisition/Project Delivery Systems
III. Design-Build Design and construction under a single contract Construction typically begins before design is complete

14 Acquisition/Project Delivery Systems
Design-Build – Integrated Firm or Joint Venture Owner Design-Builder Consultants, Specialty and Subcontractors, Manufacturers/Suppliers

15 Acquisition/Project Delivery Systems
III. Design-Build – Constructor-Led Owner Design-Builder Design Consultant Specialty and Subcontractors, Consultants, Manufacturers/Suppliers

16 Acquisition/Project Delivery Systems
III. Design-Build – Designer-Led Owner Design-Builder Constructor Specialty and Subcontractors, Consultants, Manufacturers/Suppliers

17 I. Design-Bid-Build Advantages and Disadvantages
Advantages of Design-Bid-Build Comfortable “old” way of doing things Suitable for competitive bidding System of checks and balances Established legal precedent No legal barriers in procurement and licensing Insurance and bonding are defined

18 I. Design-Bid-Build Advantages and Disadvantages
B. Disadvantages of Design-Bid-Build Confusing responsibilities - all parties have different agendas Disagreements go through owner Owner bears design adequacy risk Too much case precedent Project delivery can be slow Not always cost efficient

19 II. Construction Management Advantages and Disadvantages
Advantages of Construction Management Multi-year track record, used since the 1960s Preconstruction involvement Additional management oversight controls Disadvantages of Construction Management Not fundamentally different from design-bid-build Agency CM places much risk on owner Innovation is not encouraged/rewarded

20 III. Design-Build Advantages and Disadvantages
Advantages of Design-Build Single point of responsibility Owner freedom from coordination between A/E and constructor Savings - in schedule and potentially in cost Improved risk management Early knowledge of firm costs Rewards innovation

21 III. Design-Build Advantages and Disadvantages
B. Disadvantages of Design-Build New territory - parties assuming different risks Institutional barriers - procurement and licensing Owner relinquishes some control Limited availability of insurance/bonding products Complexity/learning curve

22 Procurement/Purchasing Philosophies Prescriptive-Based Procurement
Advantages Provides descriptive documents for proposers Owner will control outcome before proposers submit technical/design solutions Easier to establish firm budget before advertising project

23 Procurement/Purchasing Philosophies Prescriptive-Based Procurement
Disadvantages Restricts creativity of design-builder in developing proposal Places greater design risk on the owner Reduces options for developing a project that could shorten overall schedule Severely impedes innovation

24 Procurement/Purchasing Philosophies Performance-Based Procurement
Advantages Leaves maximum flexibility for the design-builder Allows design-builder to optimize costs Allows design-builder to integrate design and construction effort to reduce schedule Minimizes risk to owner for design adequacy

25 Procurement/Purchasing Philosophies Performance-Based Procurement
Disadvantages Risk of owner not being satisfied with project scope Owner relinquishing control Difficulty in comparing proposals on an “apples-to-apples” basis

26 Procurement/Selection Spectrum
Subjective and Qualitative Factor(s) Best Value: Subjective, Qualitative and Quantitative Factors Price-Based Factor(s) Sole Source “Brooks” A/E Selection Negotiated Source Selection Competitive Negotiation Weighted Criteria Fixed Budget/ Best Design Adjusted Low Bid Two-Step Sealed Bidding Low First Cost Bidding Bilateral Discussions - Choice Based on Qualitative/ Subjective Factors Formal Discussions - Choice Based on a Combination of Qualitative and Quantitative Factors Unilateral Choice, Based on Qualitative and Quantitative Factors Unilateral Choice, Based on a Single Quantitative Factor

27 Design-Build and Best-Value Procurement
Historically designer only selections are qualifications-based Historically constructor-only selections are low price-based With the procurement of design-build services, one can combine the two into a best value selection continued

28 Design-Build and Best-Value Procurement, cont.
Best-value selection - combination of technical and cost criteria Best value ranges from qualifications to price oriented selections

29 Design-Build Structural Variations
Integrated Design-Build Firm Owner A/E Owner Joint Venture Constructor Owner A/E Prime Constructor Owner GC Prime A/E

30 Percentage of Design (As included in or required by Design-Build RFP)
Usually Best Value or Qualifications-Based Procurement Direct Design-Build -10% to 10% Typically Low Bid-Based Procurement Design Criteria Design-Build 5% to 25% Preliminary Design Design-Build 20% to 35% Design Draw-Build 35% Design or Greater -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% Pre-Design

31 Percentage of Design (As included in or required by Design-Build RFP)
30% design or more leads to price oriented selection Less design provided or required - more emphasis on technical/qualifications criteria or on design-builder’s proposed solution Owners initially provide or require more design in D-B procurements continued

32 After initial experiences owners provide or require less design
Percentage of Design, cont. (As included in or required by Design-Build RFP) After initial experiences owners provide or require less design Recognition of cost and time required to prepare a design that may not be ultimately constructed Experienced owners prefer more emphasis on qualifications

33 Influence vs. Expenditure Curves Design-Build Team on-board early allows best opportunity to achieve objectives

34 Market Penetration of Major Project Delivery Systems

35 Construction Industry Institute Study
351 Projects 5K to 2.5M S.F. Various types/Industry sectors Compared performance between D-B-B, CM at Risk, and D-B Performance evaluated Cost, Schedule, Quality areas

36 Construction Industry Institute Study
Design-Build Performance compared to Design-Bid-Build Unit Cost - 6% less Construction Time - 12% faster Project Time (design and construction) - 33% faster

37 Construction Industry Institute Study
Quality on a 10-point scale - Start-up; Call Backs; O&M; Exterior and Structure; Interior; Environmental; Equipment D-B equaled or outperformed D-B-B in every category

38 Drivers for Design-Build
Early Completion Reduced Owner Staffing Single Source Responsibility Reduces Uncertainty Less Conflict Potential for Lower Costs Increased Quality Equal or Increased Innovation

39 Design-Build National Trends
Increasing use in public sector at all levels of government RFPs include less design specifics, more oriented toward achieving performance objectives Selections place increasing value on qualifications over price continued

40 Design-Build National Trends
Large design-build projects becoming more complex More industry sectors using design-build Transportation/public utilities K-12 educational facilities More owners see advantages of single contractual responsibility and a multidisciplinary team continued

41 Design-Build National Trends
Part of more integrated solutions which include financing, operation, maintenance, and/or ownership More designers, particularly engineering firms, are placing themselves in an at-risk role by leading design-build teams continued

42 Design-Build National Trends
Federal agencies, particularly the Federal Bureau of Prisons, the Naval Facilities Engineering Command, and the Corps of Engineers, are leading the trend in the public sector toward increased use of design-build New Federal design-build legislation in the last three years includes pilot programs for Federal Aviation Administration and the Civil Works Program of the Corps of Engineers and a major provision in the federal-aid highway program (TEA-21)

43 Your Help Is Needed: Licensing reform Procurement law reform Adoption of ABA Model Procurement Code

44 Removing Statutory Barriers
State laws require modification Champions must emerge within states Joint industry/owner teams effective Example statutes available Lack of knowledge of D-B a barrier Education - a major effort Consult DBIA/others

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