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Home , Architect, Architecture, Space (architecture), Sustainable design

Understanding Project Delivery for the and of Public

he programming, design Identifying the optimum delivery method and construction of for public projects depends on how public important public buildings institutions value their own input; project require the coordinated cost and schedule; overall project ; efforts of a large number short-and long-term goals; and the Tof professionals and organizations. accountability of the project participants. Critical to the successful delivery of a complex project is effectively Contractual Relationship guiding these diverse parties into a Agent-Vendor productive and responsive force that When evaluating the opportunities and represents the interests of public agen- constraints of each delivery method, it’s cies, institutions and taxpayers. Five important to identify how a project bene- primary project delivery have fits from an agent-contractual relationship evolved to organize the design and or from a vendor-contractual relationship. construction : Agents, by definition, act in the owner’s 1. Design-Bid-Build interest, providing 2. –Agent for compensation. They typically have 3. Construction Management– special expertise and are expected to Contractor or Construction adhere to a professional standard of Manager at Risk performance - that is, to exercise reason- 4. Design-Build able care in their services. In selecting 5. Contractor Pre-Selection an agent, the owner normally considers qualifications, experience and integrity as The first two delivery systems utilize an most important. , and open, competitive bidding process and construction managers put their profes- are therefore generally available for sional expertise to work on behalf of public sector projects under current law. their clients. As agents, they take respon- Design-Build, Construction Manager- sibility for overseeing that the owner’s Contractor and Contractor Pre-Selection needs and intentions are fully identified, do not include competitive bidding and defined and accommodated. therefore require special legislation.

Each of these systems has a unique decision-making with distinct advantages and disadvantages. Opportunities and Constraints of Project Delivery Methods

Vendors, by definition, supply a specified contractor builds according to the plans 4. Design and construction roles are product for a fixed price. Vendors are and specifications, and that the owner clearly defined, and responsibilities expected to adhere to a standard of meets financial and other obligations to and liabilities clear. performance established in the construc- the contractor. 5. Owner is an active participant in tion documents. When selecting a design process. vendor, the owner usually considers the Design-Bid-Build is an effective project- cost of the product being supplied, its delivery that, for many years, has Disadvantages of Design-Bid-Build delivery, warranty and, only in cases of helped public owners achieve quality in 1. Design-Bid-Build construction phases disqualification, the experience and repu- the design and construction of public are sequential and may require tation of the vendor. A contractor who projects. The is typically selected more time. is constructing a building for a specific at the onset of the project based on qualifi- 2. Owner is at risk for final construction price determined through an open cations and experience, and represents the cost. Actual construction costs are bidding process is acting as a vendor. owner’s interests during both design and not known until design and bidding If specifications are met and construction, delivering professional are complete. adhered to, the contract is satisfied. service as the owner’s “agent”. The building contractor that is successful in Construction Management Design-Bid-Build bidding will then contract with the owner Some owners or public agencies planning In this traditional method of project as a “vendor” to construct the specified construction of complex projects may not delivery, a design team of architects and design for the lowest responsible price. have resources in- to manage - engineers is hired to work with an owner ning, design and construction of a major to develop plans for a building to fit Advantages of Design-Bid-Build building project. To support this need, the goals, budget and aspirations of the 1. Contractors bid competitively, based Construction Management services can owner. Based on completed construction on complete design documents to be provided in two different ways to plans, a contractor is selected through maximize the built product for the price. an owner. a bidding process to build the building 2. The owner selects the architect on the for a set price. During the construction basis of qualifications or ability. The period, the architect works to see that the architect’s role is that of owner’s advocate. 3. The architect is active in construction administration so design intentions are followed. In one form of Construction Management, In the second form of Construction 2. Early cost commitment gives owner the owner contracts separately with an Management, the owner contracts sepa- project cost security. architect, a Construction Manager as rately with an architect and a Construction 3. At Risk entity is responsible for Agent (CM-Agent) and—through a Manager at Risk or Construction Manager managing construction process and competitive bid process—one or more as Contractor (CM-Contractor). In this has more clout with subcontractors. prime contractors. The CM-Agent vendor form, the construction manager is 4. CM-Contractor can reduce owner’s provides early cost estimating, scheduling “at risk” since he provides both contractor burden in management of large or and assistance to the owner throughout the services and construction management complicated projects. bidding and construction phases of the services for the project. Construction 5. CM-Contractor reviews project for project. Additional cost control and Contractor services are provided to the constructability, cost and schedule, condensed scheduling are the two main owner based on a guaranteed maximum potentially reducing change orders benefits of this method. The CM-Agent price, fixed price, cost plus or other means and delays. approach can be beneficial for large, of defining a contract. This creates a major 6. Fast-tracking and multiple prime complex projects where construction alter- conflict of interest since the CM is no contracts may speed construction. natives and solutions can positively impact longer acting as an agent providing profes- the overall budget. The Construction sional services to the owner, but now is a Disadvantages of Construction Manager as Manager-Agent performs as an additional vendor delivering a contractually defined Contractor (vendor) representative of the owner’s interests. product to the owner for a price. 1. Management role of CM-Contractor is added cost. Advantages of Construction Advantages of Construction Manager 2. CM-Contractor may provide less Manager-Agent as Contractor (vendor) building than a bid approach to protect 1. CM-Agent with construction expertise 1. Architect still acts as agent protecting margin of profit. Major conflict of gives the owner an agent, in addition owner’s interest and architect’s early interest with role as both construction to the architect, to supervise the project, involvement with owner addresses manager and contractor. reducing the owner’s management building quality and function. burden in large or complicated projects. 2. CM-Agent’s project scheduling and capability to competitively fast track some items may speed process and save owner money. 3. CM-Agent’s cost estimating and construction expertise at design phase assists in monitoring construction costs.

Disadvantages of Construction Manager-Agent 1. CM-Agent is added cost. Owner is at risk for final construction cost; actual construction costs are not known until design is complete. 3. Multiple prime contracts increase paperwork and administrative time, and increase potential for construction disputes and claims. 4. CM-Agent typically has less clout to resolve design-construction issues than a and serves only as a mediator. Opportunities and Constraints of Project Delivery Methods

Design-Build negotiation between agencies, officials Advantages of Design-Build In the Design-Build delivery approach, and constituent communities is expected 1. Generally fastest project delivery the owner contracts with a single entity or required, a vendor led project delivery system. for both design and construction. The process may minimize the opportunities 2. Single entity responsible for design owner has one contract assigning single- for user involvement. The design-build and construction. point responsibility for the project. The entity is focused on the delivery of a 3. Early cost and scheduling commitment. Design-Build entity may be a single contractually defined product. Since single 4. Conflicts between project professionals organization with both architectural and point responsibility leaves no independent internalized; may not involve owner. construction staffs, or a construction orga- agent representing the owner’s interests, nization that hires or affiliates with an the owner will often be required to engage Disadvantages of Design-Build architect as part of a Design-Build team. an administrative architect to assist in 1. Design-Builder may provide less The design-build entity usually proposes defining the building program, writing building than a bid approach to the design and construction price simulta- performance requirements, selecting the protect margin of profit. Construction neously, and the construction commit- design-build entity and administering the costs are non-competitive. ment is made. Design and construction design-build contract for the owner. The 2. Involvement of owner is generally may or may not be fast-tracked. owner will often also hire a separate limited to early stages of project. construction management entity to 3. Hidden reductions in quality are In a Design-Build delivery system, the monitor its interests. Without early addi- possible when cost-savings and design architect is part of the Design-Build tional program/ design/specification devel- changes are determined by design- entity and not the agent of the owner. opment, the owner is likely to get less builder. Short-term construction Thus, uniquely in the Design-Build building for the price. savings may outweigh life-cycle costs. system, there is no one in an agency rela- 4. Construction documents not complete tionship with the owner who is obligated when cost commitment made. to work in the owner’s best interests. The Disagreements about quality and design-build team is placed in a vendor design intentions may arise later. relationship with the ultimate end user 5. Major conflict of interest with role as groups and public owner. When dealing and contractor. with public sector building projects 6. No objective agent to represent where much involvement, interaction and owner’s interests. Contractor Pre-Selection Disadvantages of Contractor Pre-Selection If the proposed building is programmati- Contractor Pre-Selection has evolved 1. Without competitive bidding from the cally complex or of a monumental from Design-Build in order to obtain contractor, owner may not obtain lowest quality, it may require additional design the benefits of an independent designer, construction price, but this can be effort and input from many stakeholders. shortened schedule and early cost mitigated by mandatory subcontractor The traditional Design-Bid-Build project commitment. The owner holds separate bidding. delivery system encourages a thorough contracts with the architect, who func- and interactive design process. Public tions as an independent owner’s agent, Balancing Cost, Time, entities are also directly accountable and with the contractor, with whom he Quality and Accountability to their constituents and may favor negotiates a construction price. Final When evaluating the ideal project delivery approaches where construction is construction cost may be negotiated to system, a building owner should priori- competitively bid in an open market as provide for bids from subcontractors, tize project cost, time, quality and with Design-Bid-Build or Construction with cost savings going partially to the accountability. Design-Build and Management. owner. The owner/user is involved in Contractor Pre-Selection can overlap programming and design decisions. A design and construction to address a tight Design and construction of public build- construction manager may be added to time schedule. Straightforward projects ings, like most complicated the team if required. with known requirements are often suited endeavors, requires thoughtful review to Design-Build project delivery. Design- and consideration of how they will best Advantages of Contractor Pre-Selection Build schedules require participants to function and endure to provide valuable 1. Provides early cost and scheduling make decisions quickly. Changes to plans service over many, many years. If public benefits and saves time. become increasingly difficult and expen- architecture is seen as the handwriting of 2. Architect acts as agent protecting sive as work rapidly progresses. And a , then it must be the best it owner’s interest. there is a limit to the amount of time that can be because it is truly the people’s 3. Architect’s involvement with owner may be squeezed out of a project, no architecture. addresses building quality and function. matter how many people are working at the task or which approach is used. 20 Questions to Ask in the Delivery of Public Projects

Many issues arise in the early stages of a project involving construction and the shaping of new or renovated . Often the most challenging task, when large cost and complexity of construction is involved, is having enough information available, in a timely manner, for key decision makers to reach the best decision. Some questions that arise in these early stages include the following:

1. Who needs to be involved in making 11. Do you have concerns about the decisions? life-cycle and operational costs of the building? 2. Will you assign staff to oversee the project? Do they have experience in 12. Can we be responsible to the limited building projects? resources of our environment? () 3. What are the goals of your project? What are the constraints? 13. What are some of the special a project may require? 4. Have you clearly defined the scope of the project? 14. What is the financial commitment and risk on this project? Are there 5. Have you done this type of project options? before? 15. How do you identify the construc- 6. How will the project be funded or tion cost of the building? financed? 16. What is the role of the design 7. What are the critical limits of the professional in representing the schedule? owner’s interests?

8. Has a site been selected and 17. What is the role of the contractor in purchased? representing the owner’s interests?

9. How do you obtain the best value 18. What is project delivery?

Questions for your unique requirements? What are the qualities you value in your 19. When might an owner need to select facilities? a particular project delivery method?

10. What are some special considerations 20. Which project delivery system is that may emerge in the design best suited for our project? 20process requiring attention? ???????? Some Terms Defined

Bid Design-Bid-Build Program •A signed proposal to do the work for • The most common form of project •A written statement setting forth the amount stipulated. delivery. Architect and contractor hold design objectives, constraints, and Construction Administration separate contracts with the owner. It is criteria for a project, including space • Administration of the owner’s contract characterized by three phases: design, requirements and relationships, for construction during and construction. flexibility and expandability, special period until final payment to the Design-Build equipment and systems, and site contractor is due. •A project delivery method that offers requirements. Construction Cost an owner the ability to contract with Project Costs • The cost of the construction work to a single entity to provide both design • The total funds budgeted for the project, the contractor and their subcontrac- and construction services. including construction cost, design fees, tors. Does not include other costs Design-Builder furnishings and equipment, fees and referred to in the Project Cost • Entity that contracts with a building permits, and contingencies (compare (compare with project costs). owner to provide design and construc- with construction costs). Construction Documents tion services through a single contract. Project Delivery System • Drawings and specifications detailing Design Development Phase •A formalized contractual approach the requirements for the construction • The second phase of an architect’s which allows an owner to secure of a project. basic service, which includes developing planning and design services and Construction Management structural, mechanical and electrical build a project, assuring effective • This is a broad term covering a variety drawings and specifying materials and management throughout. of project delivery systems in which a the probable cost of construction. Schematic Design Phase construction manager is added to the Fast-Tracking • The phase of the project in which the building team. • Construction delivery approach which architect consults with the owner to Construction Manager (CM) overlaps design and construction, ascertain the requirements of the • Additional consultant such as an thereby shortening project schedule. project and prepares schematic design architect, contractor, or GMP studies consisting of drawings and developer added to project team to • Guaranteed maximum price. other documents illustrating the scale oversee scheduling, cost control, Lump Sum and relationship of the project compo- constructability, , •A contract in which a specific amount nents to the owner. The architect also building , and the bidding or is set forth as the total payment submits to the owner a statement of negotiating of construction contracts for performance of the contract. probable construction cost. or construction. Performance Specification Subcontractor Contractor (general contractor) • Standards for product quality, construc- •A person or entity who has direct • The primary contractor who oversees tion methods or building systems to be contact with the contractor to perform and is responsible for all the work used in a building project. any of the work at the site. performed on the site and to whom Prime Contractor Value any subcontractors on the same job •A contractor who has a direct contrac- • The process of reviewing elements of are responsible. tual relationship with the owner for the project design in terms of cost Contractor Pre-Selection of work, as distinguished from a benefit. Value engineering involves • Selecting the contractor on qualifica- subcontractor whose contractual substitution of less costly systems or tions, not price, early in the process to relationship is not with the owner, materials without changing the function team with the architect for time savings. but with a general or prime contractor. or overall appearance of the building. Cost Plus Fee • The contractor in an owner-contractor agreement is reimbursed for the direct and indirect costs of performance of the agreement and, in addition, is paid a fee for services. 275 Market Street, Suite 54 Minneapolis, MN 55405-1621 612-338-6763 www.aia-mn.org