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

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Presentation on theme: "Copyright © DBIA 2003 2003 Edition An Introduction To Design-Build."— Presentation transcript:

1 Copyright © DBIA Edition An Introduction To Design-Build

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 1940sNaval Facilities Engineering Command uses the Capehart and Wherry Housing Programs that employ design-build 1962National Aeronautics and Space Administration (NASA) uses design-build 1968Department of Housing and Urban Development starts use of forms of design-build: Turnkey, Operation Breakthrough 1969Associated General Contractors (AGC ) appoints Turnkey Committee

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

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

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

10 Major Acquisition/ Project Delivery Systems I.Design-Bid-Build II.Construction Management III.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 I.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 Owner A/E GC/Trade Contractors Design Consultant Specialty Contractors And Suppliers At-Risk CM Agency CM Owner Agency CM A/E GC/Trade Contractors 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 III.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 A.Advantages of Design-Bid-Build 1.Comfortable old way of doing things 2.Suitable for competitive bidding 3.System of checks and balances 4.Established legal precedent 5.No legal barriers in procurement and licensing 6.Insurance and bonding are defined

18 I. Design-Bid-Build Advantages and Disadvantages B.Disadvantages of Design-Bid-Build 1.Confusing responsibilities - all parties have different agendas 2.Disagreements go through owner 3.Owner bears design adequacy risk 4.Too much case precedent 5.Project delivery can be slow 6.Not always cost efficient

19 II. Construction Management Advantages and Disadvantages A.Advantages of Construction Management 1.Multi-year track record, used since the 1960s 2.Preconstruction involvement 3.Additional management oversight controls B.Disadvantages of Construction Management 1.Not fundamentally different from design-bid- build 2.Agency CM places much risk on owner 3.Innovation is not encouraged/rewarded

20 III. Design-Build Advantages and Disadvantages A.Advantages of Design-Build 1.Single point of responsibility 2.Owner freedom from coordination between A/E and constructor 3.Savings - in schedule and potentially in cost 4.Improved risk management 5.Early knowledge of firm costs 6.Rewards innovation

21 III. Design-Build Advantages and Disadvantages B.Disadvantages of Design-Build 1.New territory - parties assuming different risks 2.Institutional barriers - procurement and licensing 3.Owner relinquishes some control 4.Limited availability of insurance/bonding products 5.Complexity/learning curve

22 Procurement/Purchasing Philosophies Prescriptive-Based Procurement Advantages 1.Provides descriptive documents for proposers 2.Owner will control outcome before proposers submit technical/design solutions 3.Easier to establish firm budget before advertising project

23 Procurement/Purchasing Philosophies Prescriptive-Based Procurement Disadvantages 1.Restricts creativity of design-builder in developing proposal 2.Places greater design risk on the owner 3.Reduces options for developing a project that could shorten overall schedule 4.Severely impedes innovation

24 Procurement/Purchasing Philosophies Performance-Based Procurement Advantages 1.Leaves maximum flexibility for the design- builder 2.Allows design-builder to optimize costs 3.Allows design-builder to integrate design and construction effort to reduce schedule 4.Minimizes risk to owner for design adequacy

25 Procurement/Purchasing Philosophies Performance-Based Procurement Disadvantages 1.Risk of owner not being satisfied with project scope 2.Owner relinquishing control 3.Difficulty in comparing proposals on anapples-to-apples basis

26 Procurement/Selection Spectrum 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 Subjective and Qualitative Factor(s) Price-Based Factor(s) Best Value: Subjective, Qualitative and Quantitative Factors 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 Owner Integrated Design-Build Firm OwnerJoint Venture OwnerA/E Prime OwnerGC Prime A/E Constructor A/E

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

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-builders proposed solution Owners initially provide or require more design in D-B procurements continued

32 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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