- Jul 2, 2020
Updated: Sep 22, 2020
Getting a building project designed, priced, and built can be a daunting task. And with so many options for how to get from point A to point B it can make the whole experience quite the challenge - and it can get really confusing with all the lingo involved! We want to help at least a little by discussing some of the most common options and what each of them mean to a client.
The delivery methods we outline assume the project in consideration needs design by professionals, the project needs to be bid or priced by contractors, and subsequently the project needs to be constructed.
When should you hire an architect? Public building projects typically require an architect and local jurisdictions often have requirements for plans stamped by architects, such is the case in most cities. Sometimes franchises or corporate standards require an architect. Often, clients will hire an architect for the value they bring to the process in planning, design, creativity, out-of-the-box thinking, accountability they enforce during bidding and construction, and management of the entire process.
For clarification, only someone who has a degree in architecture, passed the necessary exams, completed the required internship, and been licensed in the state through their state board of architecture can claim the title of Architect. A "designer" is not an Architect, unless they have the license to go along with it.
So let's see if we can offer some clarity into the various project delivery methods.
Design-Bid-Build ("hard bid")
This method of delivery includes a client hiring an architect directly at the very beginning of a project. The architect works with the client to develop the design that best meets their needs and produces drawings and specifications for the project - this is the "Design" portion. These documents ensure the pricing received during bidding meet mandated performance, code, and quality requirements and are true apples-to-apples for pricing to ensure the best value and most competitive pricing are realized, making sure the client's dollars are being maximized.
The architect will then manage the bid process for the client - this is the "Bid" portion. The project is publicly advertised for contractors to bid or specific contractors are privately invited to bid using the drawings and specifications developed during design. Contractors then assemble their pricing and submit a bid for the project typically in the form of a stipulated (fixed or lump sum) price.
And last is physical construction of the project, where the selected contractor is awarded the work, contracted for the work, and ultimately constructs the project - the "Build" portion. The contractor manages the construction process, means, and methods to build the project and the architect provides contract administration to ensure the project is constructed according to the design and enforces the conditions of the contract.
Key points:
Typical on publicly funded projects and many private projects.
Client has separate contract with architect and separate contract with the contractor.
Client has more control collaborating with the architect during design.
A well-rounded architect will provide accurate estimating and identify alternatives to realize cost efficiencies during design and will additionally have a robust internal QA/QC process for constructability review during design.
During bidding and construction the architect acts as a third party to protect the owner's best interests.
The nature of this delivery results in contractors using most competitive rates, subcontractors, and suppliers.
Design costs are balanced with cost savings in the competitive bidding process and reduction in change orders.
A good design team will ensure a proactive process in bringing the client, architect, and contractor together collaboratively to ensure a smooth construction process with as few bumps as possible.
Potentially longer duration.
Average economical delivery method.
Design-Build
Design-Build involves a client hiring one entity to deliver a project and that firm includes both the architect and contractor. Depending on the makeup of that firm, the contractor will typically be the contracting entity and subcontract with the architect.
In a true Design-Build delivery, a client will develop a detailed scope for a project and then advertise or invite Design-Build firms to provide their qualifications, team, and cost proposal for the project to ensure the best team and the most competitive pricing is received.
The submitting firms will partially develop a design based on the project scope and then develop pricing for that design, typically submitting pricing as a stipulated sum, cost-plus (cost plus a fee), or guaranteed maximum price (GMP) for the project. The design, price, and qualifications proposal is then submitted for consideration and ultimately the client will choose the proposal that best meets their needs from a design, team, and cost standpoint. Again the intent with this competitive process is to ensure the best value and most competitive pricing are realized and the client's dollars are being maximized.
The client then awards the project to the selected firm, they finish design documents ensuring the project meets mandated performance, code, and quality requirements, and they ultimately construct the project. The architect provides reduced construction administration activities related mainly to submittal review and responses to questions.
This is a true competitive delivery method, not to be confused with Negotiated Construction (see next delivery method for more detail).
Key points:
True Design-Build for building construction is typically only seen at the federal level in our region, such as at the Minot Air Force Base.
Client has one contract with the Design-Build firm, which includes the contractor and architect.
Client has less design control and involvement.
The intent of Design-Build is to deliver a project quicker with a single point of contact.
Client needs to be highly responsive because of the project speed.
The architect is a part of the construction team, so is not in a position to act as a third party to provide checks and balances in protecting the owner's best interests.
The contractor and architect work together to realize cost efficiencies.
The nature of this delivery results in contractors using most competitive rates, subcontractors, and suppliers.
Typically most economical delivery method.
Negotiated Construction
In this delivery method a client contracts with a general contractor directly to deliver a project and they include the design and construction in their contract. However, the client does not entertain multiple proposals from different general contractors.
The contractor develops a design, competitively bids out subcontractors and suppliers, submits a price for the work, and ultimately constructs the project. The structure of these contracts can be cost-plus, stipulated sum, hourly, or sometimes GMP. The architect provides reduced construction administration activities related mainly to submittal review and responses to questions.
Competitive bidding is only realized during the sub-bidding process when subcontractors and suppliers provide pricing for their portions of work. A true "open-book" or transparent process will provide the client access to the bid tab and sub-bids as submitted during bidding as well as provide detailed backup for the general contractor's direct costs to verify additional costs are not being hidden.
Key points:
Client has one contract with the general contractor.
Client has less design control and involvement.
The intent of Negotiated Construction is to deliver a project quicker with a single point of contact.
Client needs to be highly responsive because of the project speed.
The architect is a part of the construction team, so is not in a position to act as a third party to provide checks and balances in protecting the owner's best interests.
The contractor and architect work together to realize cost efficiencies.
Transparency is minimal unless the actual design costs, sub-bid tab, sub-bids as submitted, and the contractor's detailed and itemized direct costs in general conditions/requirements are available for verification by the client and explanations are given for how the numbers were derived - this is truly open-book. A client also needs to fully understand general conditions/requirements.
Clients need to be well-informed and have a high-level understanding of design, construction, construction processes, and pricing to protect their best interests since this method has no intrinsic checks-and-balances.
Clients pay a premium under this delivery as there's no competition between general contractors.
Construction Management
This delivery involves a client hiring an architect directly and at the same time hiring a construction manager (CM). The CM is typically hired by advertising or inviting CM's to submit qualifications and the client selecting the CM that best fits their needs with the best qualifications.
There are different avenues within this approach including Construction Manager as Adviser (agent) where they act as an adviser through design and construction but are not the builder and Construction Manager as Builder (Contractor) where the CM is an adviser and also the builder of the project, which is the most common.
In the CM as Adviser scenario the client has a contract with the CM to advise during design, manage the bid process, and advise/monitor during construction. However, the client also holds contracts with each separate contractor that is actually building the project. The architect develops the design much like in Design-Bid-Build and the CM provides input along the way including cost estimating, scheduling, and constructability reviews.
A CM as Builder provides the same design advisement and bidding management, however during construction the CM is solely responsible for construction of the project and holds all the individual contracts with subcontractors and suppliers to build the project.
To make this even more confusing, CM as Builder has a couple different approaches as well - one where the contract is base on cost plus a fee and another where the contract is based on a GMP, also referred to as Construction Manager at Risk (CMAR). With a true CMAR approach, the CM would develop a GMP off of 80% complete design documents and essentially guarantee the project will not cost more than that GMP number and will return any cost savings realized to the client.
After bidding the project, the CM will then advise or build the project as noted above and the architect provides full contract administration to ensure the project is constructed according to the design and enforces the conditions of the contract.
Key points:
Sometimes seen on publicly funded education or government projects - more common than Design-Build, but less common than Design-Bid-Build.
Client has separate contract with architect and separate contract with CM. The client may also have separate contract with contractors under CM as adviser delivery.
Excellent delivery method for time-constrained or complex projects.
Easy to fast track portions of construction.
CM's will often charge a fee for their design and bidding services (pre-construction services) thereby adding cost to the project.
CM contracts with subcontractors and suppliers tend to be comprehensive and thereby add cost and sometimes discourage local participation in bidding, both of which can affect realizing the best value on a project (i.e. - the project becomes more expensive).
The CM and architect work together to realize cost efficiencies.
Open-Book/Transparent bidding process.
Under CMAR, the CM does not wear the adviser hat during construction since they are the builder.
Typically higher cost delivery method than Design-Build in our region.
This is not a comprehensive list of all delivery methods available or even the full depth of those outlined, but it does represent a majority of what we see in our region and it at least gives you a high level understanding of each. If you find this interesting, but have some lingering questions or need some advice, we would be more than happy to have a conversation.
Ryan is a Vice President at Ackerman-Estvold and the architecture team lead and has been applying his trade in the region around Minot for the past 17 years. If you have any questions throughout this series or would like more information on a particular topic, by all means contact us and we'd be more than happy to have a conversation.
