Design-Bid-Build

vs. Design-Build

Pros and Cons

Public Private Partnerships all share one defining characteristic: the P3 contractor retains the design team instead of the government entity retaining the design team, known as Design-Build. Design and construction professionals split on if including the design team as a component of the construction team results in a measurable benefit to the government. Theoretically, design-build collaboration should align the incentives of the engineers and contractors, improving construction efficiency and speed. However, this is difficult to prove. Governments do not procure identical simultaneous side-by-side projects with one executed as design-build and one design-bid-build. Infrastructure projects are so unique/localized that it is difficult to compare results between similar projects that used different procurement methods.  Since no reliable empirical data is available, we will look at how proponents of both delivery methods promote the virtues of their approach.

 

The USDOT – Federal Highway Administration released its Design-Build Effectiveness Study, in January 2006 in which it set forth pros and cons for design-build procurements:

 

PROS: “Proponents of design-build contracting proclaim a number of advantages over typical contracting arrangements such as design-bid-build in the public highway context, including:

Time savings through:

  • Early contractor involvement that enables construction engineering considerations to be incorporated into the design phase and enhances the constructability of the engineered project plans

  • Fast-tracking of the design and construction phases of the project, with overlapping (concurrency) of design and construction phases for different project segments

  • Elimination of a separate construction contractor bid phase following completion of the design phase

Cost savings from:

  • Communication efficiencies and integration between design, construction engineering, and construction team members throughout project schedule

  • Reduced construction engineering and inspection (CEI) costs to the contracting agency when these quality control activities and risks are transferred to the design-builder

  • Fewer change and extra work orders resulting from more complete field data and earlier identification and elimination of design errors or omissions that might otherwise show up during the construction phase

  • Reduced potential for claims and litigation after project completion as issues are resolved by the members of the design- build team

  • Shortened project timeline that reduces the level of staff commitment by the design-build team and motorist inconvenience due to reduced lane closures

Improved quality through:

  • Greater focus on quality control and quality assurance through continuous involvement by design team throughout project development

  • Project innovations uniquely fashioned by project needs and contractor capabilities

In addition, according to Design-Build and Moore’s Law by Leofwin Clark, the technical revolution in engineering design favors the collaborative design-build approach. Using BIM (building information modeling), CAD (computer assisted design), the “Cloud”, and 3-D virtual reality present major advantages in project delivery over the linear design-bid-build process. Technology advances allow design-build members to better collaborate through transparency, collaboration and visualization.

 

ISSUES: The USDOT noted: “Within the highway construction industry, the design-build procurement and delivery mechanism is a relatively new concept that has not yet achieved widespread acceptance and application. This is because the design-build approach is perceived as:

  • Changing the roles and relationships between project designer and construction contractor, which may impact the independence of the designer with regard to construction inspection and testing functions

  • Broadening the selection criteria to include more than just initial cost in selecting and awarding major construction contractors

  • Placing the emphasis on awarding the contract for both the design and construction phases of project development, thereby expediting the timeframe for committing available highway construction funds

  • Providing greater opportunity for larger construction and engineering firms to compete for projects, thereby potentially reducing project opportunities for smaller construction firms

  • Making it difficult to utilize unit price payments because a quantity survey cannot be completed before contract award

  • Triggering legal or regulatory constraints of state and local governments that need to be relaxed or repealed before the approach can be more widely applied

  • The procurement of the design-build contractor through a request for proposal (RFP) process might actually require substantially more time than the invitation for bid (IFB) process used to retain the construction contractor

 

One important difference between DB and DBB is illuminated by their Dispute Resolution processes. In a typical DBB construction dispute, finger pointing often prevails with the engineer claiming the contractor is at fault and the contractor claiming the engineer is at fault.  The government has the ability to join both parties in the dispute, with the financial backing of each adverse party available for payment of settlements or judicial mandates. In the DB framework, the government only works with one party to resolve disputes. Having a single defendant simplifies and streamlines the dispute resolution process, but may make it more difficult to determine the party within the DB team at fault.