Project Delivery Mechanisms,  Part 2
Pros and Cons of Alternative Procurement Processes
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Preliminary Management Plan 11/24/98

Design-Bid-Build

• Well understood
• "Low-bid" for construction phase can bring competitive price control
• Thwarts favoritism, both for this specific project and for the broad public contracting system in the long run

• No price competition in selection of design services
• "Lowest responsible bid" criterion for construction doesn’t always bring best team or best outcome
• Construction team comes on too late for assisting design with constructability analysis or value engineering
• Process is sequential, so will likely take longer than alternatives
• Process can be more prone to conflict and litigation because design team and construction team are placed somewhat in adversarial roles

• Construction expertise is available from the beginning of design

• Leads to value engineering and constructability improvements
• Diminishes risk of need for re-design

• Owner need not be intermediary between design and construction teams - less adversarial relationship between design and construction teams
• Maximum allowable construction cost is agreed to by all parties in advance

Disadvantages

• Quality can suffer, because whole team now has an incentive to reduce the quality and the scope of the project
• No independent architect on owner’s team, to serve as watchdog over construction (Can be ameliorated by hiring separate owner’s representative)
• Process is not as well understood as for traditional method, so performance could be spotty
• Cost of procurement could be higher than with traditional method

• Allows for early introduction of construction expertise while maintaining separate processes to procure design and construction teams
• Allows procurement of construction team based on evaluation criteria, not just "lowest responsible bid"
• Allows for price competition among construction teams, on the basis of their proposed fees
• Maximum allowable construction cost is agreed to early in process
• Less time in procurement than for traditional method
• Guaranteed maximum price is set with clear understanding of design, and guaranteed with performance bond
• Allows for incentives in contract

• No price competition for selection of design team
• Team is created through process by owner, not necessarily resulting in same level of teamwork as in design/build
• Constructability analysis and value engineering must wait until later in design phase
• Can be a lack of clarity about subcontracting process
• Least well understood of 3 options

30 November 1998