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Project Delivery

Design-Build? Design-Bid-Build? The answer to the question might be neither. Consider the alternative delivery method: Design-Negotiate-Build.

There's more than one way to deliver a construction project. How do you know which is right for you?

With all the chatter about Design-Build (DB) vs Design-Bid-Build (DBB), something gets lost in the noise. The thing we lost is another project delivery method, Design-Negotiate-Build (DNB). A hybrid of DB and DBB, DNB is often the best choice for smaller projects with unique conditions where the owner wants to know cost information early.

First, let's identify the important things in making a project go smoothly, in no particular order:

- Early diligence on the part of the architect to help you identify your goals

- Getting the contractor involved early and providing input throughout the design phase

- Early pricing and scheduling information

- Construction cost is negotiated

- Architect advocates for the owner

- Knowing your contractor and seeing how they work before committing to them

- The architect is familiar with the contractor and has confidence in them

- Overlapping project phases to shorten the overall schedule

- The architect, contractor, and owner operate as a team

- The owner has control over the quality and scope of the project 

- The design is customized to the client and building site

The delivery method that gives you all of this is Design-Negotiate-Build. In DNB, the owner still signs separate contracts with the architect and contractor like DBB. This allows the architect to advocate for the owner whereas in DB, the contractor stands between the owner and the architect. Oftentimes this means the architect answers to the contractor and not the owner which gives the contractor a lot of power and pull. 

In a DNB project, a contractor is brought on early to do cost estimating. The contractor then negotiates final pricing with subs and suppliers when the design is finalized meaning competitive bidding still takes place. This also allows for adjusting quality or scope to come back within budget earlier in the process. In DNB, you have the option of setting a GMP or Guaranteed Maximum Price. This means the contractor covers any cost overruns past the GMP, reducing the risk for the owner. Another advantage of DNB is that it allows for collaboration and creativity during construction. Both DBB and DB have fairly strict processes that don't allow for the owner-architect-contractor team to work together on design solutions in the field.

On the flip side, the disadvantages of DB are numerous.

 

The biggest of which are the lack of owner control and putting the architect in a position that is answerable to the contractor and not the owner. This means you get what you get, and you can't throw a fit! In DB, the early phases of design are skipped or shortened to the information shared in your initial interview. This leads to expensive changes during construction when changes are needed because the design was not carefully prepared. Because of this, DB can often result in the highest cost and the lowest quality. 

 

DB lacks the flexibility to change directions if you need to. This is because DB locks you into a contract early on and after that contract is signed, the DB team is incentivized to do what is best for them, not you. Next is the lack of competitive bidding. With DB, the odds of getting a variation on a stock design are high because this significantly increases the contractor's profit margins and is in their best interest. 

The disadvantages of DBB are also numerous.

 

The biggest drawback is that the project will be awarded to the lowest bidder. While in theory, this gives you competitive bids, the reality may be that a contractor underbid the project to get the work and plans to make up the difference later. Or it might be that the low bidder is not the most qualified to perform the work, which can lead to contentious relationships, reduced quality, and delays in construction. The contractor should be selected based on both price and qualifications, not just price. The second biggest drawback is the time and effort required to bid on the project. The architect must spend more time and effort preparing drawings and specs in order to get apples-to-apples bids. Getting and comparing bids is time-consuming. Furthermore, DBB can bring about more change orders as the architect and builder weren't working early on together as a team. Lastly, the contractor is brought in late in the process and is unfamiliar with the project, creating a gap between the design and construction phases.

In summary, DNB is a great way to avoid the headaches of both DB and DBB while reaping the benefits of both. I've done projects several ways and DNB brings about the best projects and has the happiest owners, contractors, and architects.

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