Selecting the Best Construction Project Delivery Method

Selecting the Best Construction Project Delivery Method

First of all, what is construction project delivery? You probably know what it is, even if you’ve never called it that before. Project delivery is the process by which all the different pieces and procedures of designing and constructing a build are organized and agreed to, resulting in a completed project.

The key players (the ‘big three’) in project delivery are the owner, design professional (an architect and/or engineer) and the general contractor. These three main parties can interact in a number of different ways, depending on a few factors:

  • the type and number of contracts executed by the owner;
  • the relationship between the parties, and their responsibilities according to the contract;
  • the degree to which the two main phases of the project, the design and construction phases, overlap with each other;
  • Which of the big three is liable for any gaps or issues with the plans and specifications. 

Which project delivery method you choose depends on how you want the big three to interact during the project delivery process. Here are the four primary project delivery methods:

1. Design-Bid-Build(aka the traditional method)

  • How it Works: This is your grandfather’s version of project delivery. The owner holds two separate contracts, one with the designer, who is hired first and prepares the design; and one with the general contractor, who is hired after the design is complete and performs the construction/construction management phase of the project. This can be problematic, as any issues with the plans or specifications that were drawn up during the design phase are generally only discovered once construction has started. 
  • Number of Contracts: 2
  • Communication: Minimal – any dealings between the designer and contractor go through the owner. 
  • Overlap between Design and Construction: None. Construction occurs after the plans and specifications are complete. 
  • Liability: The owner warrants to the contractor that the plans and specifications drawn up during the design phase are sufficient. If there are any errors, or gaps between the plans and the owner’s requirements, the owner is responsible and liable financially for correcting the issues. 

2. At-Risk Construction Management

  • How it Works: A construction manager acts both as a consultant to the owner in the design and development phase, as well as doing the work of a general contractor in the construction phase. This method makes direct dialogue between the design team and the construction team possible, providing valuable feedback and analysis before the project really gets off the ground – which can save a lot of money. 
  • Number of Contracts: 2
  • Communication: Increased – communication between construction and design teams occurs via the owner, and only during the design phase, when the construction manager offers feedback on the proposed plans and specifications. 
  • Overlap between Design and Construction: Minimal. While construction still occurs after plans and specifications are complete, the construction manager can bring important insight into the design phase that will prevent issues in the long run. 
  • Liability: This method is called “at-risk” because the construction manager at-risk is responsible both for performing the construction, and is also financially liable for ensuring the project is on time and within budget. 

3. Design-Build(aka single source project delivery)

  • How it works: This is a method that is growing in popularity. In design-build project delivery, the owner contracts with a single entity that is responsible for BOTH the design and construction phases of the project. That entity can be either a partnership between a design firm and contracting firm, or a full-service firm that employs both design and construction professionals. This allows for early and direct contractor involvement and input in the project, significantly reducing the risk of costly mistakes later on.
  • Number of Contracts: 1
  • Communication: Continuous and direct – the designer, contractor, suppliers and manufacturers, as well as the owner, all have the opportunity to be in continuous communication from the beginning to end of the project. 
  • Overlap between Design and Construction: Significant. While work is still sometimes sequenced linearly, this method often integrates and overlaps design and construction (called “fast-tracking”) to speed up a job. Timelines are extremely important for many clients, which is why this is an increasingly popular choice of method. 
  • Liability: The design-build entity, not the owner, warrants that the plans and specifications are sufficient, is financially liable for any gaps or errors, and picks up the tab for any shortfalls. 

4. Integrated Project Delivery

  • How it Works: This increasingly popular method brings the contractor on board at the VERY beginning of the project delivery process, while the project’s design is still in development. Truly integrated project delivery uses a unique contracting format called an Integrated Form of Agreement (IFOA), which aligns the owner, design and construction teams on what’s best for the project as a whole. 
    • An IFOA is a single, multiparty agreement where the owner, designer, and contractor, as separate entities, all sign one agreement and share liability for development and delivery of both design and construction of the project. 
  • Number of Contracts: 1 (the IFOA)
  • Communication: Early, continuous, and direct.
  • Overlap between Design and Construction: Fully integrated. Because design has a major impact on costs, constructability, and scheduling, early and continuous contractor input helps the designer make better design decisions and avoid delays, cost overruns, and other issues. 
  • Liability.  All of the big three share liability for every phase of the project, meaning that the owner is also accountable for delivery of their own project. 

Which project delivery method you choose can depend on the needs of the project, or the skills, expertise, and level of comfort of each of the parties. Having a good understanding of every method will mean that you ensure the best possible outcome for each project.

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