Potential Difficulties of the Design Bid Build Project Delivery Process

by EVstudio AEP on September 16, 2009

EVstudio works with a variety of project delivery methods. Each method has some advantages and some disadvantages. While on the surface design/bid/build often seems like the most desirable option, there are potential drawbacks that should be considered. The traditional approach to getting a project constructed, also known as Design / Bid / Build, looks something like this…

Design – The owner hires the architect to design the project.  The architect works directly with the owner to determine the scope of the project, including construction budget, and construction type.  The architect then proceeds with the design of the project, making what I like to refer to as “guesstimates” to the cost consequences of the design decisions made.  A good architect will be able to make design decisions based on previous market conditions.  The architect will also hire engineering consultants to provide professional engineering services for the project.  At the end of the Design Process the architect has spent a significant amount of time managing and coordinating as many as five or six engineers from as many different firms and making estimates as to the cost of the project.

Bid – Upon the completion of the Design phase of the project, the architect will assist the owner in putting the project out to bid.  Depending on the complexity of the project, this process typically takes three to eight weeks to complete.  The bid process is ultimately the “reality check” of the architect’s estimates of project costs made during the Design phase of the project.  The Bid phase of the project will reveal the current market conditions affecting the costs of the project, often several months from the time a design decision was made.  While we have a great track record in coming in at budget, there are two other results than can happen.  The less frequent result is that the project comes in under budget. On the surface, this seems like a desirable situation to be in.  In reality, this means that the project was under designed and the owner did not get as much in the project as what he was willing and able to afford based on current market conditions.  The owner is now possibly subject to change order fees and other mark-ups if attempts are made to add to the project.  The more common result is that the project comes in over budget. Beyond the obvious, this situation also causes stress to the relationship between the owner and the architect.  It also creates a need for immediate value engineering which ultimately costs the owner more time and money.  Decisions to reduce the cost of the project are often made at the expense of entire building systems and components instead of making small adjustments throughout the entire project.  In the end, the owner is often left feeling like he compromised on the integrity of the project in order to get the costs of the project within budget.

Build – Upon the completion of the Bid phase of the project, the owner will award a contract for construction to a general contractor.  The architect will continue to act as the owner’s agent and assist the owner with contract administration during construction of the project.  Traditionally, the architect and the general contractor have not worked together on the project until the project is under construction.  By now, the general contractor has agreed to build the project for a fixed amount of money within a fixed amount of time.  The general contractor is obligated, by contract, to build the project the way the architect has designed it without having had any input into the project regarding constructability, alternative construction techniques, alternative materials, and many other areas of the project.  Generally, the general contractor’s experience, knowledge, expertise, and relationships with sub-contractors and suppliers are not utilized until the construction of the project has started.

Summary to Design / Bid / Build – Although the Design / Bid / Build process has been used successfully to complete countless projects in the past, it is no longer the only option.  This process can be inefficient and wasteful in both time and money.  This process also undervalues the significance of the general contractor’s experience and relationships in the construction industry by delaying his involvement in the project until the actual construction of the project.  This process places undue pressure on the architect to estimate and make educated guesses during the design process.  The architect and owner usually have a degree of separation from actual current market costs that is not overcome until the end of the Bid phase.  Finally, this approach to project delivery can significantly increase the time between completion of design and the beginning of construction by adding in a bidding period and potential changes.

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