Alternative Project Deliveries and Local Public Agencies

One of the challenges that Local Public Agencies (LPAs) face in administering a successful Construction program is choosing the appropriate delivery method for a particular project. This decision is driven by factors such as project complexity, schedule, budget, and risk management, to name a few. While there are several options available for project delivery the Design-Bid-Build (DBB) and Design-Build (DB) make up the vast majority of project delivery models.

A brief overview of each method is provided below with a summary to follow:

  1. Design-Bid-Build (DBB)
    • This construction method is the most widely utilized and commonly known method of constructing any project. In this method, the owner generates a contract during design that defines the requirements for a successfully delivered project by the Contractor. This contract can be generated by the owner themselves if they have the capabilities, or the owner may hire a designer to generate the contract for them. The contract includes all documents required to direct the successful bidder in every facet of construction. This includes, but is not limited to plans, specifications, published standards and manuals governing the proposed work, and addenda to the originally published advertisement.  While this is possibly the longest process of the commonly used delivery methods, it allows the most interaction between owner and designers which affords a high level of satisfaction in the end product and, in general, the best price.
    • Once the proposed contract is completed it is advertised to receive bids by Contracting professionals. During this time General Contractors interested in the project confer with specialty Contractors to create a team that will be able to successfully deliver the contract to the owner within the time allotted in the advertised contract. During this process, a vehicle must be made available to bidders to allow questions of clarification to the owner or owner’s representative in order to more accurately prepare an accurate bid. It is not uncommon for bids on a project to vary greatly especially substantial projects that are of interest to a large range of Contractors. Once bids are received they are opened by the owner and selection is made as to the successful bidder. This concludes the 2nd phase of the process and marks the beginning of the construction phase.
    • The Construction phase is accepted as the most important phase of the project because it is the manifestation of the efforts of all project team members into one end product. Another advantage of the DBB process is that the owner is able to be involved in the oversight and administration of his project at every phase. This, in turn, allows a certain amount of control in the end product received by the successful bidder as well as the opportunity to alter the work as necessary based on circumstances discovered on the project site. Whether it be additive work included as a betterment or the necessary mitigation of unforeseen circumstances, the owner has the ability to have input in the final product.
  2. Design-Build (DB)
    • As stated in the previous section the DBB process is lengthy and can become arduous when disputes are not resolved in a timely manner. This inherently affects the overall project and can result in less-than-civil disagreements between members of the project team with differing motives. In order to create an alternative to the DBB process, the term “Design-Build” was coined in 1993 by the Design-Build Institute of America (DBIA). While the process had been used for years prior, it had not been recognized as an official delivery method until that point. This method of delivery allows the owner to contract with one entity, under one contract to design and build the desired project.
    • While this is a more streamlined process that minimizes the risk of project disputes, the ways in which an owner retains the same level of involvement can be different. While the DB team retains a QA/QC staff to ensure quality throughout the construction process the LPA is able to supply their own inspection staff (either in-house or via consultant) to oversee the installed elements, further ensuring the quality of the end product. Non-compliance reports are generated and submitted by the designated Quality Assurance Manager on the project, but the LPA has the final say on all issues experienced on the project and thereby ultimately maintains control of the project, albeit in a slightly modified process from the DBB model.
    • In general, the Owner produces an initial document (including up to 30% plans) that describes the purpose and characteristics of the project along with the schedule required and the points established for plan review. DB teams submit a price proposal for the work that includes a preliminary design (or designs) based on advertised information. Once the DB team has been selected, the specifics of design and construction are discussed and the process of obtaining the required permits, site investigation, and beginning preliminary work in the ground can occur concurrently with the design process. It is very important that the team conduct a thorough review of the site at this time as the DB process includes a scope validation stage intended to afford the DB team the opportunity to submit proposals for alterations to the work based on site characteristics. No submittals for changes to the work are accepted after the close of the scope validation stage. The minimization of disputes in this delivery process is both a by-product of the team structure inherent with the Contractor and Designer working together as opposed to being on opposite sides of the budget and schedule and a result of the presence of the scope validation stage. This truer version of the team concept often results in a more collaborative effort that lends itself to more innovative processes. But the increased risk of unforeseen on-site conditions can result in a higher bid price than the DBB method.
    • Should an LPA choose to deliver a project via the DB format, state agencies have outlined the steps required of the LPA when completing this delivery method. VDOT, for instance, has produced a manual (“Guidance for Locally Administered Design-Build Projects”) that establishes the process to be followed by the LPA. This manual provides the tasks required for preliminary project delivery, preliminary plans, Request for Qualifications (RFQ), Request for Proposals (RFP), and the Award/Post Award phase. For each of these phases, the manual includes a description of each task and the party responsible for completing that task.

While the Design-Build method has the advantages of expediting project delivery and reduced instances of change orders, it sacrifices a level of involvement by the owner and generally comes at a higher price than the Design-Bid-Build process due to the increased risk that must be absorbed by the DB team. For this reason, DB projects are usually represented by large-scale projects. While the DBB process requires more time to complete, it affords more involvement from the owner in both the Design and Construction of their project. One thing that both methods have in common is the importance of documentation during the construction phase. Documentation in the construction phase on DB projects is included in the Quality Assurance/ Quality Control Plan that is produced by the DB team. Quality control is the process of ensuring the quality of the product being produced whereas quality assurance focuses on the processes used for producing those products. The DB team must document in detail, the processes by which the quality will be assured in the QA/QC plan. This plan must be submitted to the owner for approval prior to the delivery phase of the project. Inspections on the project will follow this approved plan that is to be updated throughout the duration of the project. Regardless of the delivery method, ensuring compliance with the executed contract is integral to the success of any project and the ability of the deliverable to exceed its life expectancy.