Risks and Rewards of Alternate Delivery Methods

With the current changes in the global environment, technology and innovations are changing at an alarming rate. The result of these changes calls for a great need for new solutions that will help to meet the rise in demands for a growing market. There are many project delivery methods that have been used in the construction projects. Some of these project delivery methods include the traditional Design-Bid build methods which have been in use for quite a long time. It is however apparent that this method is not meeting the growing needs and this has led to the increment development of alternate delivery methods such as CM-at-Risk, Design-Build, P3s, CM agency and integrated project delivery methods. It is out of the recognition of the impact that alternate delivery methods bring in the construction projects that this essay touch on the risks and rewards of the Design-Build alternate delivery method are tackled.

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As part of a shift from the traditional project delivery methods, the Design-build alternate delivery method is a type of alternate delivery where the Design-Build team acting as a single entity is contracted under one contract owner. For this reason, the Design-Build team provides the constructional and design services for the single contract owner (Harris et al p.87). They thus have a responsibility to design and construct towards the single contract owner. The method has gained much popularity with contractors because of the fact that it depends on a single point obligation contract with minimum risks for the owner. It also offers better contractual remedies for the client since the responsibility of the project are bore by contractor. The method has numerous rewards and risks associated with it as will be seen below:

One of the most rewarding aspects of the Design-build alternate method is the aspect of speed of delivery. Projects delivered under this method are fast and efficient due to the ease with which the Design-Build team collaborate (Chen et al p.581). The speed is also enhanced by the fact that fewer problems exist under this the whole project is designed and constructed by the same team hence little room for mistakes. Any mistakes that might appear are solved there hence making the process faster compared to the case of other methods where the design and construction methods are under different teams. It is this aspect of lack of dead time between the process of coming up with the design and the construction process that makes the Design-Build process faster. In addition to the lack of deadline, the Design-Build process is much faster because the design-build team is under no obligation as to how they should start their project (Giachino et al p.7). They can choose to start with the early stages of construction such as laying of foundation, mobilization and site utilities before embarking on the other phases of construction such as electrical, partitioning and building envelops. It is out of this realization of faster completion of projects that the design-build project delivery gets the name fast track delivery method.

It is also evident that no other project delivery method cuts cost of project delivery as the design-build project delivery method. The main reason for this is because the contractor taking part in the design process has the responsibility of also constructing and thus has a better understanding of the cost of the whole project (Harris et al p.91). He or she will thus come up with a design that is affordable as there is an incentive to come up with one. Coming up with an expensive design will only lead to him not winning the contract and this serves as the main reason why design-build alternate delivery method is rewarding to contract owners. This is best explained in the aspect of value engineering where cost reduction is seen as one of the ways in which the design-build team is awarded a contract based on the manner in which they are able to convince the contract awarding committee of the manner in which they can cut down on the cost. Other methods of contract delivery do not present the contract owner with the prerogative to use cost as the basis of awarding contracts and this serves as a big reward for those using the process in construction and design.

While other methods may provide various advantages, none helps to reduce the liability gaps that exist during the contractual process in the design and construction process as the design-build process. According to other methods, it is difficult to ascertain who is liable for some errors that might arise due to omissions or negligence during the project delivery process because of the many teams involved (Keen et al p.14). It thus becomes difficult for the contract owner to know with certainty who messed and who did not. This result to more legal tussles in identifying the one to pay up for the errors and liabilities incurred. With the design-build process, having a single team involved in the construction and design process, the owner has no problem in knowing who will incur the cost of liabilities. All he or she has to do is just to prove that the design-build team is directly liable for any error that deviates from the correctness of the project delivery and this leads to the design-build team incurring the cost. This makes the method efficient in the elimination of gaps that might have led to a compromise of standards set as the design-build team has no one to blame but only itself. Contract owners are thus able to reap the rewards of not going through much in getting quality and efficient work from the design-build team based on the elimination of the gaps in liabilities.

Compared to other alternate delivery methods, the design-build method is efficient in ensuring that there is overall optimization of the project delivery process (Fewings p.59). This is in comparison to a method such as the design bid build process where each entity cuts its own cost and optimizes at the expense of others. This leads to the delivery process experiencing problems of sub-optimization. For the case of the design-build process, there is maximum optimization of the whole project delivery process because every spending and incentive is used to the point of its diminishing return thus ensuring that all process are optimally maximized. For every cost incurred in one process, there is another saved in the other processes thus ensuring that maximization and optimization is achieved in the design-build process.

No other project delivery method is less costly in terms of delivery as compared to design-build process because of the less bureaucracy. This results to lower administrative cost for the process as compared to other delivery methods where costs are passed from one entity to the other making the overall process an expensive venture.

Risks Associated with Design-Build Project Delivery Method

Like all methods of project delivery, the design-build project delivery is not without blemish. It has its own shortcomings that serve as the risks that users of this method tend to go through in the project delivery method:

Compared to the traditional design bid build method, the owner in the case of the design-build alternate method has to relinquish some of the control he or she has in the whole process. He does not enjoy the control of the specifications and plan details of the project (Giachino et al p.9). This are some of the risks that the owner has to incur before awarding a contract to a design-build team who will have some rights over the project delivery process. This is not the case in the other methods.

Another aspect that hinders the use of the Design-Build project delivery is the fact that using it requires much definition of the task or project before the task can be performed (Fewings 99). The definition of the project makes it difficult for one to get the design-build team to undertake the task. It is this aspect that makes it difficult for the owner to procure the services of a team that will ensure the project is performed better. For this reason, the contracts take long before they can be awarded to the design-build team because numerous teams showcase their goals and how they will undertake the task prior to being awarded the contract.

Compared to the traditional design bid build method, the design-build project delivery method is ineffective in instances where the construction does not require any laid down plan (Chen et al p.583). For instance, in case where the city or state requiring the construction process has not set a given plan or rule on which the project is to be delivered, then construction and design using the traditional method is much more affordable due to lack of recommendations that must be specified and followed in the case of design-build method.

It is always problematic for Design-build companies during the contract awarding stage especially in the case where they have to sublet or subcontract some of the services to help in the construction and design process. This makes it difficult to estimate the cost of the task with precision. This is the case where there is lack of details such as drawings and design. It is a requirement that all the bidders list the number of their subcontractors together with the bids they have and this is not easily obtained as most subcontractors fail to comply with the subcontracting and subletting fair practices act.

Conclusion

It is however apparent that with the current changes in technology, the need for newer technology is pushing project managers in the construction industry to shift towards alternative methods of project delivery such as Design-Build method. As a method of project delivery, the design and construction is carried out in a faster and less costly manner as compared to the traditional Design Bid Build method. There is also the aspect of optimization of the contract delivery that makes the method even more attractive to contractors. The method is however limited by issues such as the requirement for properly defined designs among others. Despite that, it is often the method of choice based on the ease with which it can be incorporated easily in the delivery of projects in a faster and efficient manner.

Works Cited

Chen, Qing, et al. "Time and cost performance of design-build projects." Journal of Construction Engineering and Management 142.2 (2015): 04015074.

Fewings, Peter. Construction project management: An integrated approach. Routledge, 2013.Giachino, John, et al. "Alternative Project Delivery: Construction Management at Risk, Design-Build and Public-Private Partnerships." Proceedings of the Water Environment Federation 2015.4 (2015): 1-11.

Harris, Frank, and Ronald McCaffer. Modern construction management. John Wiley & Sons, 2013.Keen, David J., et al. Current Practices to Set and Monitor DBE Goals on Design-Build Projects and Other Alternative Project Delivery Methods. No. Project 20-05 (Topic 45-03). 2015.

Sears, S. Keoki, et al. Construction project management. John Wiley & Sons, 2015.