New construction delivery method options

CarolinaFireJournal - John Kelley
John Kelley
05/06/2014 -

With the enactment of House Bill 857, the North Carolina General Assembly has now given state and local governments the ability to contract for construction projects using design build as the delivery method. Effective in 2013, this bill allows municipal fire and rescue departments to choose design build as their delivery method for both new facilities and renovation projects.

This bill allows the departments to use a qualification-based method to select a design builder. This selection process is already established in the General Statutes. Article 3D of the statutes allows public entities to “select firms qualified to provide such services on the basis of demonstrated competence and qualification for the type of professional services required without regard to fee other than unit price information at this stage, and thereafter to negotiate a contract for the services at a fair and reasonable fee with the best qualified firm.”

The public notification and reporting requirements are also established in the General Statutes and are the same as those required for the selection of other professional services with one exception. The public entity must report to the Secretary of Administration a “detailed explanation of why a particular delivery method was used in lieu of other methods and the anticipated benefits to the public entity from using the particular delivery method.” The report is due no later than 12 months after taking “beneficial occupancy” of the project.

Why Design Build
Throughout history, master builders embraced both design and construction roles to build the world’s greatest structures. It wasn’t until the late 1900s that the roles began to be separated. What is considered to be the “traditional” delivery method of design-bid-build was an outgrowth of this. A May 2013 report prepared by Reed Construction Data indicated that in the last eight years more than 40 percent of commercial construction has used design build as the delivery method. The old method is becoming the “new tradition.”

Why has this occurred? Independent entities such as Penn State University, the American Society of Civil Engineers and many federal and state agencies have studied actual projects using different delivery methods, and they have all come to the conclusion that the design-build method saves both time and money.

Design build has been widely used in the private sector for many years. Public entities such as the VA, GSA, EPA, Federal Highway Administration, Department and the Army Corps of Engineers are using design build for their construction projects. Now North Carolina fire and rescue departments can use the design-build delivery method to their advantage.

Characteristics of Design Build
The savings of both time and money are inherent in the DNA of design build. They are achieved through:

Single Source
With an owner working with a single source from early concept to the completion of construction, a framework of teamwork and collaboration is created that focuses on results, not excuses. Both design and construction expertise is brought to the table in the beginning to help the owner achieve the project goals. Working as a team improves communication, resulting in fewer misunderstandings or unfulfilled expectations.

Improved Risk Management
The design-bid-build delivery method often puts the owner in the middle of disputes between an architect and a contractor. At a recent conference for North Carolina contractors conducted by NAVFAC and the Army Corps of Engineers, it was recognized that a benefit of design build is a significant reduction in claims and litigation because of its single-source responsibility. This single-source responsibility and collaborative environment focus on finding solutions to issues as they arise as opposed to finding blame or pointing fingers.

In addition, with the early involvement of both design and construction, the scope of work and costs are defined early in the process, which results in fewer surprises compared to the design-bid-build method where costs aren’t known until the design is complete and bids are received. The early definition of the scope of work also is likely to lead to fewer field change orders, again reducing overall project costs.

The design-bid-build method is often a sequential, step-by-step process. The design is completed and then bids are solicited. If the result is a project that is over budget, several rounds of negotiation, redesign and rebidding may occur before the project is brought within budget. It is possible that the owner’s wants and needs may get lost during this additional exchange.

With early input from design and construction working with the owner as a team, the design-build method can streamline the design phase time, reducing the overall project time frame. When the design builder is integrated with both design and construction under one roof, the design phase time line will be reduced even more.

The design-build method often allows for projects to be fast tracked with construction starting even before the design is complete. A simple example would be starting the grading for the project before all of the building details are worked out.

Not all projects are candidates for fast track, though. However, design build with early construction input in the design improves the constructability of the project, thereby reducing time delays in the field due to design conflicts as well as delays while decisions are made.

The spirit of teamwork and collaboration allows the owner to have as much or as little involvement in the process as they desire while still being kept informed throughout the process. To save money, the owner can perform some of the work themselves or they can request that specific subcontractors be utilized or have the opportunity to price the work.

Design build also allows for different contracting options to be considered. In addition to Lump Sum contracts, Cost Plus and/or Shared Savings contracts may better serve the owner’s needs.

Design build is a proven, time-tested delivery method for construction projects, for both new construction and renovations. With the enactment of House Bill 857, North Carolina municipal fire and rescue departments can now reap the benefits of this delivery method.

On average using design build as the delivery method, a high-quality fire and rescue station can be built for between $150 and $160 per square foot. This figure includes the design as well as the construction of the facility. Departments who have investigated the design-bid-build method have reported much higher costs. In addition, articles in the Carolina Fire & Rescue Journal written by architects have stated that the construction costs for a new station range between $180 and $190 per square foot. This figure does not include the cost for the design, which would be a significant additional cost. The savings that could be achieved from utilizing the design-build method could be substantial; perhaps enough to purchase a new piece of equipment to better serve the community.

John Kelley is Vice President, Business Development of Bobbitt Design Build, Inc.
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