By Ronald A. Bauer, Executive V.P.
Who is in the driver’s seat, when it comes to construction and the various ways that are available to contract and deliver a building project? One could certainly argue that, depending on the form or approach, the owner or builder has more (or less) influence over the process. Perhaps a brief analysis of three popular construction delivery methods will bring clarity to the issue.
First, let’s consider the traditional approach of design/bid/build. Here the owner typically hires an architect, who may subcontract with design consultants, forward a bid package to qualified general contractors, and select the low bidder. Straightforward. The general contractor constructs the building. The Architect arbiters quality control. Ideally, such a method provides optimum pricing for initial cost. The downside of this method: no opportunity for value engineering as the design develops, changes in scope are far more costly, preliminary estimates are developed by the engineers and architect and rarely hold up. It is the slowest delivery approach, especially if the project comes in over budget and has to go back for redesign. The other unfortunate result is that the Contractor and owner are in an adversarial relationship. The Contractor’s obligation is to maximize profits rather than to deliver value to the owner.
At Trumbull-Nelson, our ‘slant’ is toward teamwork, collaboration and open communication. Without question, project owners belong in the driver’s seat.
The next popular contract-delivery method is Construction Management (CM). Under a CM approach, the Owner hires the Architect, who may subcontract with design consultants, and prepares a bid package. At this time, the Owner can hire the CM to participate in the design development, make cost recommendations, evaluate subcontractors, provide estimating and scheduling services, competitively bid all pertinent trades, and (in most cases) construct the building. Pros for utilizing CM include better estimating during every phase, ‘built-in’ value engineering by design, collaborative work efforts, and close monitoring of quality control by the CM (who is acting in the owner’s best interest). The downside of CM? Initial cost estimating may seem high to an owner worried about achieving an optimum price advantage. A CM delivery system works best when a business relationship and strong degree of trust exists between all parties, and the Owner recognizes that his or her best interests are being served.
Finally, a Design/Build approach offers an Owner the opportunity to hire a professional construction organization to design (or subcontract design requirements), provide estimating and value-engineering, seek competitive bids (on an open book basis) on all biddable trades…and build the facility. The advantages of Design/Build include single source responsibility (..it’s hard for team members to point fingers at one another if problems exist!), accurate early budgets, ability to “fast-track” construction, and a built-in value engineering process. Because there is typically less need for detail, design costs are modest. As with CM, early project estimates may seem high. Thoroughness and experience may mean that the most skilled Design/Build team offers the highest early estimates. With Design/Build, the Architect is not in as strong a position contractually if the Owner feels ‘checks and balances’ are needed. Finally, if the building has a very strong architectural design element to it (i.e. an Owner wants to convey a certain image, and design is more heavily weighted than utility and function), design/build methods may have less appeal.
At Trumbull-Nelson, our ‘slant’ is toward teamwork, collaboration and open communication. Without question, project owners belong in the driver’s seat. We believe that a buyer of construction services that fully understands and appreciates available contract and delivery system options can play a key role in influencing the overall success of each building project.