Design & Build

Design – Build concept:

Design-Build means hiring a single entity for final design and construction, in lieu of the standard and proven practice of keeping the design process separate from construction contracting (design/bid/build). Design-Build is one of many innovative contracting methods. It’s been successful for many years in Europe on some types of transportation projects and is widely used in US and in Europe on plant and facility construction projects.

Design-Build’s attractiveness lies mainly in the promise of innovation stemming from the Designer/Builder collaboration. Traditionally, designers design the product the public wants, using their knowledge of construction methods and practices. Builders then take the plans and build accordingly. Possible design improvements during construction can become somewhat costly and time consuming since changes require change orders, new specifications, etc., and the designer's work is typically over with when construction begins. With the ideal Design-Build project, initial design takes place, designers obtain feedback from their builder partner, design proceeds further, construction begins, feedback continues, design is completed, and then construction is completed. If the process is applied to the right project with the right controls in place, the public gets a quality product in a shorter time.

The Advantages of Design - Build:

Saves money - A modified design-build approach can improve bidding process and decrease the amount of design needed.

Saves time - In projects where completion time is extremely important, and when other factors are present, Design-Build may be a viable alternative.

Provides creative solutions - Design-build approaches have enabled to use an innovative contract procurement method to obtain financing for projects.

Firm price at a very early stage - Another advantage of a design-build approach is that it provides you with a firm price for a custom-tailored program at a very early stage. This not only meets your needs, but the needs of the organization financing your facility.

Market Volume:

The demand for cost and time efficiencies has never been greater. That's why more and more public agencies, corporations, and developers are turning to design-build for infrastructure projects.

Throughout most of the 20th century, most commercial construction projects were design-bid-build. Over the past ten years, the increase in the number of design-build projects has been astounding, according to the Design-Build Institute of America. DBIA statistically shows the design-build market share steadily increasing, with current projections expecting to surpass bid-build by 2011.

The worldwide market for toll highway development is estimated at $800 billion.

Congress saw how design-build benefited the highway projects of California's Transportation Corridor Agency (TCA) and believed that those benefits could definitely be accrued on highway projects funded under TEA-21. Congress believed that highway legislation for the 21st Century needed to embrace new project delivery systems.

http://www.dbia.org/

Design-build is the project delivery system of choice on more than 50 percent of the non-residential construction projects in the European Community and is used on more than 70 percent of the non-residential projects in Japan, according to recent industry publications.

Design – Build explores new markets as public sector shows interest:

Design-build as a project delivery system is reaching for a new level of maturity. Markets are expanding, private sector owners are more willing to use alternative delivery systems and the public sector is opening up to design-build as never before. But, as with any successful market, competitors are racing to capitalize on the trend, causing firms to scramble to distinguish themselves from the crowd.

DB Overview

Nowhere is the trend toward design-build seen more clearly than among public owners. "The government is becoming more receptive to the idea of design-build, but there remains legislative restrictions," says William Melsop, CEO of The Austin Co. The U.S. Postal Service, a long-time Austin client, has been a leader in the federal use of design-build, he says. Now, the Army Corps of Engineers is beginning to take a serious look at design-build, he adds.

On the state level, Florida is pointed to as a breakthrough state for legislation. "Florida's decision to allow qualification-based design-build selection is a major change," says Preston Haskell, CEO of The Haskell Corp. He notes that most public jurisdictions that use design-build consider qualifications but pay a lot of attention to other factors. "Florida's may be the most advanced in the nation in considering qualifications."

Texas also recently enacted a qualification-based selection law. California is considering expanding its use of design-build, "but the engineers and architects have a strong lobby and they see design-build legislation as a threat," says Jeffrey Beard, executive director of the Design-Build Institute of America, Washington, D.C.

Public infrastructure projects have been one of the holdouts in the use of public sector design-build. "The water and wastewater markets have tremendous potential for design-build, but progress has been slow," says Beard. However, the use of design-build in transportation projects, led by the $1.3-billion Interstate 15 highway reconstruction project, is making significant inroads for alternative project delivery.

Innovative procurement techniques relating to project delivery represent an emerging area of focus for those concerned with highway project cost and schedule control. Among these techniques, one of the most promising is design-build project delivery. This is a method of project delivery in which the design and construction phases are contractually-integrated activities of the project development process. The term can also be used to encompass services in addition to design and construction, such as maintenance, operations, and finance (i.e., design build-maintain, design-build-operate-maintain, and design-build-finance). Franchise and concession agreements are included in the term if they provide for the franchisee or concessionaire to develop the project that is the subject of the agreement. In contrast, design-bid-build is the traditional project delivery method for highway projects, in which design and construction are distinct, sequential steps in the project development process, subject to separate procurement approaches and processes.

Design - Build projects:

A complete updatted list of DB Projects could be found here: DB Projects Database

I-15 North, US-95 to Craig Road Design-Build Project

This project is the first design-build contract for the Nevada Department of Transportation (NDOT. The scope widened a 5.8-mile section of I-15 from the US 95 Interchange north to Craig Road, north of downtown Las Vegas. The scope of work included road widening and additional auxiliary lanes, 14 bridges and two bridge widenings, 17 miles of concrete barrier rail, 225,000 square feet of retaining walls, 406,000 tons of new asphalt pavement, 2 miles of 12-foot average height post and panel sound walls, 29,126 linear feet of storm drain system, high mast lighting, and an Intelligent Transportation System, signals and surface street improvements.

Design-Build I-5 Everett HOV Lanes

CH2M HILL was a joint venture partner on this $220-million design-build contract. WSDOT’s award was based upon our team’s innovative technical approach, compressed schedule, and cost. The project included widening or replacing 23 bridges; improving ramps and exits, lighting, signage, surveillance; and installing noise walls and ramp meters. An owner change order for a Flyover SPUI at 41st Street was added to improved traffic flow. The old bridge was demolished and reconstructed in a single stage, saving more than 6 months of construction and yielding a higher-quality bridge. The I-5 Everett project was constructed in an environmentally sensitive area with surrounding wetlands in the Snohomish River Valley, a major watershed area north of Seattle. The team took extraordinary precautions in the design, planning, and execution of the work to meet or exceed all regulatory requirements for work in this sensitive area.

I-70/E-470 FlyBy Interchange Complext

The I-70/E-470 FlyBy Interchange Complex provides a vital direct connection between the E-470 Tollway and I-70 Corridor in the eastern Denver metropolitan area. The project improves safety, capacity and operations by providing a new bypass alignment and represents a joint public private effort between E-470 Public Highway Authority, Colorado Department of Transportation, and local agencies.

Utah's I-15 Design-Build Project

Utah's $1.59 billion Interstate 15 design-build project provides for the reconstruction of 26 kilometers of interstate mainline and the addition of new general purpose and high-occupancy-vehicle (HOV) lanes through the Salt Lake City metropolitan area. The project also includes the construction or reconstruction of more than 130 bridges, the reconstruction of seven urban interchanges, and the reconstruction of three major junctions with other interstate routes, including I-80 and I-215. In addition, the project provides for the construction of an extensive regionwide advanced traffic management system.

Build-Operate-Transfer:

The build-transfer-operate (BTO) model was pioneered in the 1991 development franchise agreement for the SR91 Express Lanes in California (Euritt et al.. 1994, 24). Adapted from the more common build-operate-transfer model, it was designed to provide additional protection to the private sector from tort liability during the operation phase. In the litigious United States, concerns that inevitable accidents on the toll road during its 35-year franchise would expose the private sector to unacceptable risk prompted the state to assume ownership of the facility immediately after construction. Sovereign protections from liability protect governments from tort claims on public property, but do not apply to private developers (Lockwood 1995, 16). Instead of owning the facility during operations, the private sector enters into an operating lease before the facility opens to traffic.

Build-operate-transfer worldwide:

The build-operate-transfer (BOT) model is the oldest and most popular form of development franchise worldwide. Under this approach, the private sector acquires right-of-way or an existing facility prior to construction, makes improvements, operates and collects revenues under the terms of the agreement, and transfers the facility back to the public sector upon expiration of the franchise. Early infrastructure development charters evolved into the build-operate-transfer franchises used today. 

The BOT system is developing on all the continents and most countries in the world. This technique is used by governments for restructuring their economies, rationalizing the management of their economic services of general interest, financing and realizing infrastructures, get the local communities out of debt, ensure a better technical performance of the activities given in concession thanks to the assets and the know-how of the most qualified operators in the field related to wich they are called upon at the end of a negotiation or an open tender. One expects improved living conditions for the population whose needs in equipment and public utilities will therefore be better satisfied.

U.S. Roadways DBFO and BOT projects:

Many of the first U.S. roadways were privately financed by associations, users and the automotive industry. In some countries, concessionaires are used to allow corporations with mixed capital structure or privately owned corporations to finance, design, build and operate toll roads.

Virginia DOT has entered into a $131.6 million five-year contract with VMS Inc. in a pilot project to provide turnkey maintenance services on 160 km (101 miles) of I-95 and 95 km (59 miles) of I-77. The services provided include all routine maintenance such as mowing roadsides, painting pavement markings, snow removal and operations up to and including major rehabilitation and restoration work. The agreement requires that VMS provide maintenance services that are equal to or better than the maintenance services that VDOT historically provides. VDOT estimates that this approach will save $22 million over the life of the contract. Since the 1995 Public-Private Transportation Act was passed, VDOT has received eleven conceptual proposals for various design/construction/maintenance agreements.

Agencies:

CA–Build Operate Transfer (transfer after construction)–SR-91 Express Lanes $126 million

CO–Toll Road, E-470 $341 million

MA–Operate/Maintenance–Essex County highways $3.7M

MO–Build Operate Transfer, Lake of the Ozarks Bridge, $23.6 million

NM–NM 44, NEPA, design, construction management, maintenance for 15 years ($295 million including $62 million for design, administration, and warranty)

VA–Build Operate Transfer–Dulles Greenway $325 million

VA–I-95 Operate/Maintenance $131.6 million

New Brunswick, Canada–Design-Build-Operate-Maintain, Prince Edward Island Bridge

Team Approach Contracting

Before beginning with the pre-construction phase of a project it may help to understand some successful models and patterns of team approach contracting. The most popular technique is design-build, which is in essence a revival of the age-old building practice of single-point responsibility. Single-point responsibility contracting has deteriorated in the twentieth century as architects, contractors, and owners have lined up in opposite corners protecting their own interests. Frustrated customers and contractors are now delighted when they experience the benefits of team-approach contracting and often later seek out only builders that include this discipline in their services. Why? Because it works! Instead of allocating risk, the team members share risk. They sit around the project table and work toward the same goals instead of grabbing at each other's piles. So why are people reluctant to take the plunge? Our "consumer beware" society perpetuates an "us against you" mentality that grates against writing a cost-plus-type contract. Another reason is it requires a level of sophistication, leadership, and effort by the project's owner. When the owner is not capable or is ignorant on how to proceed, the contractor also may not be informed enough to "lead the leader" or to take charge.

As we go through some basic principles of design-build we will follow up with some examples and models and look at patterns to follow. One striking success story of a new convert to the design-build delivery system is the state of Utah. With its recent award of a $1.5 billion design-build contract to Wasatch Constructors to reconstruct Interstate-15, Utah has thrown their hat into the design-build ring. With the upcoming Olympics in 2002, the only way possible to accomplish everyone's budget, scope, and time goals was to try something radical. Consistently, the nightly news has reported this project as being "under budget" and "ahead of schedule."

Whether a project is architect led or contractor led, the design-build method sets up a team or partnership with the same goals. It avoids the resulting finger pointing of design-bid-build methods. Design-bid-build methods can become a two-edged sword when designers do not guarantee the outcome of the project. As a general contractor, if you are going to implement the design-build system you must understand and promote it. In most cases the general contractor will take the leadership position even if it is a "shadow leadership" supporting the owner. Most owners are ill prepared or too busy to put forth the effort required to initiate a design-build project. General contractors must display knowledge and abilities in management and leadership skills in order for owners to have confidence in their abilities and to want them as part of the design-build project delivery team.