PUBLISHED BY THE NATIONAL ENVIRONMENTAL SERVICES CENTER Design-Build By Zane Satterfield, P. E., NESC Engineering Scientist Summary Design-build is a method of construction where the design and construction tasks are contracted with a single entity known as the design-builder or design-build contractor. The design-build meth- od is gaining popularity, with some projections indicating that more than half of all non-residential construction projects in the U.S. will be design-build by 2015. This Tech Brief discusses some of the aspects of the design-build method and how it might be used for water and wastewater projects.

What is Design-Build? Design-build is a construction project delivery system where the design and construction as- pects are contracted with a single entity known as the design-builder or design-build contrac- tor. Design-build is more streamlined than the traditional method, often referred to as design- http://nats320.blogspot.com/ bid-build, where design and construction were clearly separated.

The design-builder is usually the general con- Image courtesy of tractor, but can also be the architect or engi- neer. By incorporating the designer and con- tractor, design-build minimizes the project risk for an owner and reduces the delivery schedule by overlapping the design phase and construc- tion phase of a project. Rather than first bid- ding or engaging an architectural or engineering firm to design the project and then bidding out a contractor to build the project (i.e., the design- bid-build method), the design-build contractor packages the engineering design services in with The Washington National’s ballpark in the nation’s capital is one of the the construction. best-known examples of a design-build project. Construction on the $630 million stadium, which also adhered to green-certified building guidelines, was completed in less than two years. Historical Precedent The design-build delivery concept originates For most of the 20th century, the concept of de- from the master-builder model used in the con- sign-build was classified as a non-traditional con- struction of structures such as cathedrals. Under struction method in the U.S., which is one of the the master-builder approach, a central figure—usu- last countries to embrace the standard of design- ally the architect or engineer—held total project bid-build. However, design-build is rapidly becom- accountability. From inception to completion, the ing the preferred form of project delivery, increasing master builder was the key organizational figure and from approximately five percent of the non-residen- strictly liable to the owner for defects, delays, and tial development market in 1985 to 40 percent to- losses. The design-build system is a return to some day. By 2015, the Design Build Institute of America of the fundamentals of the master-builder concept. projects that this method will be used on at least 50 percent of all non-residential construction projects in the U.S. two

PAGE OF FOUR factors include: capable ofcompletingtheproject.Evaluation cess isdonetodetermineifthecontractor ily basedonthelowestbid.Aselectionpro contractor orengineerchosenisnotnecessar to dotheentireprojectfromstartfinish.The advertises foracontractororengineeringfirm ter orsewersystem),afterarrangingfinancing, With thedesign-buildmethod,owner(wa the responsibilityofowner. a one-yearwarranty,afterwhichtheprojectis too. Mostwaterandwastewaterprojectscarry and theownersignsoffthattheyaresatisfied, has doneeverythingtoprojectspecification, plete, theengineerverifiesthatcontractor construction process.Oncetheprojectiscom spection (qualitycontrol)duringandafterthe The engineerisusuallyresponsibleforin been plannedwell. can becomeexpensiveiftheprojecthasnot occur becauseofunforeseensituations.They neer andowner.Changeordersalmostalways changes requireachangeorderfromtheengi tasks. Fromthesigningofcontracton,any contractors performsomeoftheconstruction If allowed,thechosencontractorhassub awarded thecontracttoconstructproject. contractor withthelowestbidwouldtypicallybe tors, usuallyviaapublicadvertisement.The would puttheprojectoutforbidtocontrac Next, theowner(occasionallyengineer) agency. agencies, includingthewaterorsewerprimacy permits throughthevariousstateandlocal The engineerwouldthenobtaintheproper sometimes fundingagencyspecifications,too. incorporating stateandlocalregulations, the projectwithowner’sspecifications, After beingselected,theengineerwoulddesign up projectfunding. local policiesandprocedures,whilealsolining advertise foranengineer,adheringtostateand the owner(e.g.,awaterorsewersystem)would With thetraditionaldesign-bid-buildmethod, Design-Build Differences betweenDesign-Bid-Build and • • • • • •

ance andbonding; and ence); major subcontractors); and orengineeringcontractor Bid amount. Other appropriatefactors, suchasinsur Capability to perform; Technical qualifications(specialized experi Technical approach; Past performance(boththearchitectural ------percent ascomparedtodesign-bid-build.Costoverruns the design-buildmethodreducedtotalprojectcostsbysix associated withthedesign-buildmethod.Forinstance, Construction IndustryInstitutefoundseveralbenefits Pennsylvania StateUniversityinconjunctionwiththe A studycovering351projectsin37statesperformedby Benefits of Design-Build inspection (qualitycontrol),andthewarranty. company issolelyresponsiblefordesign,construction, overlap dependingonthepermitsrequired.Theselected the properpermits.Thedesignandconstructionmay drawings sothatmajorconstructionwillhavetowaitfor most states,permitsarebasedonthefinisheddesign and materials,aslongitdoesnotrequirepermits.In ed. Someactivitymaybegin,suchaspurchasingsupplies notice toproceedisgivenandtheprojectdesignstart After thecontractisissuedtoselectedcompany,a sen, theyneedacontractorfortheconstruction. contracted forthedesign.Ifanengineeringfirmischo they musthavealicensedengineeronstafforonesub plete theproject.If,forexample,acontractorischosen, sign-build project,theymusthavetheexpertisetocom While eitheracontractororanengineercandirectde was poisedfor development,butthelack ofareliable had highlevels ofnitrate.Beingclose to Wichita,Maize homes andbusinessesthere reliedonshallowwellsthat munity inthestatewithout apublicwatersupply.The about 10milesnorthwest ofWichita,wasthelargestcom communities. Maize,Kansas, aruraltownof2,000people in themedia,thismethod isgainingpopularityinsmall While largedesign-buildprojectshavebeenpublicized Some keyaspectsofdesign-buildinclude: of 33percentoverdesign-bid-build. delivery timefordesign-buildresultedinanimprovement over design-bid-build.And,mostimportantly,the total or changeordersontheprojectsimprovedby5.2percent • • • • • • • • Tech Brief

eliminate litigationclaimsbyclosingwarrantygaps. efficient andinnovativesolutions; functions; the projectasawhole,ratherthanonseparate risk todeliver; requirements; performance needsratherthanminimumdesign stacles orsituations; because thedesigndidnotaccountforcertainob completes workfasterwithpotentiallyfewerproblems; for cost,schedule,andperformance; Decreased administrativeburden—thefocusison Reduced ownerrisk—adesign-builderassumesthe Potential betterquality—adesign-buildmeets Reducing changeorders—designchangesthatoccur Faster delivery—collaborativeprojectmanagement Singular responsibility—oneentityisaccountable Fewer litigation claims—owners can reduce and even Fewer litigationclaims—ownerscanreduceandeven Potential costsavings—anintegratedteamexecutes ­• Design-Build , Summer 2009, Vol. 9,Issue2 ------DESIGN-BUILD

Select Concept Preliminary Design/ Final Design & Planning Design Builder Project Clearances Construction

Design-Build- Minimal to Extensive Associated Time Savings Contractor Input Extensive Contractor Input Diagram courtesy of the Federal Highway Administration

DESIGN-BID-BUILD

Concept Select Preliminary Final Design & Select Planning Engineer Design Project Clearances Contractor Construction

Minimal Contractor Input Extensive Contractor Input public water system hindered the town’s potential. To The Relationship and Loyalties Among Parties encourage development and provide a safe, dependable The design professional is not the owner’s con- supply of potable water, the community set out to con- sultant but the contractor’s teammate. Design struct a complete water system. The community and its professionals have contractual incentives to design-build partner brought the system online in just perform their services so as to further the de- 18 months. sign-build team’s goals, which are not always in line with those of the owner. To counter this, Considerations employ a designer-led design-build, in which Before considering a design-build approach, be sure that the engineer or architect is the lead member of your state allows it and that whatever funding source the team. you use endorses it, too. The Design Professional’s Standard of Care The most common objection to design-build is the fear Ordinarily, an engineer (or architect) is only that the owner will lose control by delegating too much held responsible for exercising the degree of or suffer from compromises between design and con- skill or care that the average design profession- struction. The owner’s role simply changes from one of al would use, and does not usually warrant or mediating problems between disciplines (design engineer guarantee a successful outcome for his or her and contractor) to exploring and analyzing options to services. The rule for a contractor is different, improve value for the user. Ultimately, with good perfor- in that contractors do implicitly warrant that mance specifications, the design-build team (instead of the result of services will be successful, pro- the owner) becomes responsible for the success of the vided that the design and other factors over project. which they may have little to no control is sufficient. The design-build relationship allows If the owner is afraid that the quality assurance and a change in the designer’s standard of care. In quality control will suffer, an independent inspection the design-build concept, unless written into team can be specified for the project. Also, if a problem the contract, the design engineer is held to the is perceived, the funding agency may be able to help. same implied warranty as a design-bid-build Remember: whoever holds the purse strings has consid- contractor.

erable pull. PAGE OF According to Friedlander’s article “Design-Build—Legal Performance Warranties Obstacles and Solutions,” there are legal considerations In a traditional construction contract, the con- three with design-build construction, including the relation- tractor is asked to warrant the results of their FOUR ships and loyalties among parties, the design profession- work, but not the overall success of the project. al’s standard of care, performance warranties, change This is because there are many other factors— orders, licensing problems, insurance and bonding prob- primarily design—over which the contractor lems, and conflicts with competitive bidding laws. has no control that may determine the success of the project. In most design-build projects,

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PAGE OF FOUR tractor even in design-buildprojects. In some require acompetitiveprocess tochooseacon Projects fundedwithpublic moneyusually Conflict with Competitive Bidding Laws omissions insurance. ported bythedesignprofessional’serrorsand the designprofessionalandcontractorsup solution isappropriatecross-agreementswith ability toredressthisdisparateimpact.One tion projectsthatlimittheparties’contractual states haveanti-indemnitylawsforconstruc policies excludeprofessionalservices.Certain tion servicesandcontractors’generalliability sions insuranceusuallyexcludesconstruc parties. Designprofessionals’errorsandomis the relationshipbetweendesign-build Issues relatingtoinsuranceandbondingaffect Problems Insurance/Bonding subcontracting withadesignprofessional. neering andarchitecturalservicesbyjoiningor design-build contractorsusuallyprovideengi licensed asdesignprofessionals.Therefore, these requirementsandarenotthemselves design-build contractorsdonotmeetallof and eachstate’slawsaredifferent.Most of professionalengineeringandarchitecture, Every stateintheU.S.regulatespractice Licensing Problems may, therefore,wanttomaintainsomecontrol. are receivingfortheprojectprice.Theowner more likelytoleantowardhowmuchvaluethey tives aretoprofitfromtheconstructionand sometimes thespecifications,hisorherincen fessional isresponsibleforthedesignplansand category doesnot.Becausethedesign-buildpro may stillresultinchangeorders,butthethird In design-buildprojects,thefirsttwocategories any ofthesesituationsoccur: tractor isusuallyentitledtoachangeorderif In standardconstructioncontracts,thecon Entitlement to Change Orders fessional maynotbefullyinsurable. professional liabilitybornebythedesignpro considered professional,andthenatureof of theliabilitybornebycontractormaybe tor towarranttheproject’sperformance.Some that itbecomesfeasibletorequirethecontrac tractor isresponsibleforsomuchoftheproject the situationisreversed.Thedesign-buildcon • • • Published byThe National Environmental Services Center at West Virginia University, P.O. Box 6064, Morgantown ­­­­ face obstacles);or changes, disruptionsbyowner); Design problems(errors,omissions). Changed conditions(unknownsubsur Impacts causedbytheowner(scope ------Carter, William C. 2006.“Design-Build: An InnovativeApproach Beck, Peter.2009.“WhyDesignBuild?”Accessedat References org Design-Build InstituteofAmerica’sWebsiteat To learnmoreaboutdesign-buildconstruction,visitthe For MoreInformation utilities toundertakeconstructionprojects. offers afaster,lessexpensivewayforwaterandwastewater work togetherasateam.Iffollowedcorrectly,design-build entire process,owners,designers,andcontractorsmust cultural shiftawayfromdesign-bid-build.Throughoutthe The successfulimplementationofdesign-buildrequiresa Closing Thoughts problem fordesign-buildprojects. petitive biddingonthebasisofprice,whichcouldposea local levels.Somestatutesandregulationsrequirecom cases, moredifficultrestrictionsexistatthestateand Smith, Gray. 2009. “Design-BuildConceptExpands.”Accessed Loulakis, MichaelC.andMarkFriedlander.2002.“Design- Loulakis, MichaelC.2002.“Design-BuildforthePublicSector.” Friedlander, MarkC.2002.“Design-Build—LegalObstaclesand to Project Delivery for Rural Communities, The Maize Kansas, group.com/alt_package/article.pdf at schiffhardin.com Build—Legal Obstacles and Solutions.”Accessedat Construction LawLibrary.AspenPublishers Schiff Hardin. Solutions.” Partnership. Story.” . Tech Brief www.gsoexpert.com/designbuild.htm Rural Matters a licensedpr­ NESC EngineeringScientist ­• water operator,andpreviouslyworkedforthe Journal ofManagementandEngineering Design-Build . West VirginiaBureauofPublicHealth, Environmental EngineeringDivision. (Fall). Rural CommunityAssistance ofessional engineerandalicensed , Summer 2009, Vol. 9,Issue2 An EqualOpportunity/Affirmative Action Institution . Zane Satterfield , WV 26506-6064 . www.dbia. www.beck is . Chicago: www. - -