PROJECT DELIVERY METHODS
− The term “project delivery method” (PDM) refers to the comprehensive process
used to execute and complete a capital project, including planning,
programming, design, construction, and, potentially, operations and
maintenance.
− Historically, public-sector construction entailed the almost exclusive use of the
design–bid–build (DBB) delivery method, which involves the separation of
design and construction services and the sequential performance of design and
construction.
− However, over the past two decades, Developers have increasingly been
turning to alternative PDMs to improve the speed and efficiency of the project
delivery process.
− A project delivery method is a system used by an agency or owner for organizing
and financing, design, construction, operations and maintenance services for a
structure or facility by entering into legal agreements with one or more entities or
parties.
− Project delivery method describes: how the participants are organized to interact,
transforming the owner’s project goals and objectives into a finished facility.
PROJECT DELIVERY METHODS
Traditional Project Delivery (Design–Bid–Build)
• DBB has been the most common method of
project delivery for public projects, and for
many private projects as well.
PROJECT DELIVERY METHODS
PROJECT DELIVERY METHODS
Design–Build
• A single entity to provides both design and construction
services.
• Contract may either be negotiated with a single design-
builder or result from competitive proposals.
• Selection can be based on low price or on a set of value
criteria (experience, staff, bonding capacity, etc.) or both.
• Provides the owner with a single point of contact for
project responsibilities, eliminating the need to assist in
resolving designer-contractor disputes.
The Design / Build method is where the D/B team provides
the design, construction documents and the construction
of the project based on the program and other criteria
provided by the owner.
• The owner may engage an architect or engineer as a
bridging agent to assist in the preparation of the
program and related criteria documents and to assist
the owner as appropriate throughout the project.
When to use:
• There is a compelling reason to complete the total project
(design and construction) in a minimum amount of time or to
meet a fixed deadline for completion of the project.
• Desire to have a single point of responsibility for the project
and a single contract that includes both design and
construction.
• Unique project requirements that may be best met by the
joint efforts of a creative design and construction team.
• A need to have a fixed total project cost very early in the
project.
• The Owner has the ability (with the Bridging Agent, if
required) to appropriately define the requirements for the
project.
PROJECT DELIVERY METHODS
• Costs are typically defined and maintained to a
higher degree.
• Coordination of fast-track management to achieve
early completion is greatly simplified.
• Makes many decisions that owner would make
CONTRACT TYPES
under DBB, due to delegation of increased
• Purchase of actual construction
authority.
service
• Lump sum
Advantages
o Single fixed price
• Better communication among all parties
• Unit price
• Allows construction input early in design phase
o Price per unit of the
• Easier incorporation of changes, if any
different elements of the
• A clear understanding and documentation of
construction project
design-build processes enhances the quality of
• Reimbursable
design-build projects
o Cost plus fixed fee
•Disadvantages o Guaranteed maximum price
• Initial cost may be higher due to increased (GMP)
contractor risk o Cost plus percentage fee
• Lack of checks and balances
PROJECT DELIVERY METHODS
DESIGN-BUILD VARIATIONS
•Funding Option Variations
•Turnkey
•Developer Financed Projects
•Turnkey Variations
Funding Option Variations
Private capital and developer participation offer private owners several
variations on design-build.
Lease-develop-operate arrangement:
The owner gives a private operator a long-term lease to use, operate,
and expand an existing facility.
Public-private partnership or wrap around:
• Ownership of or fiduciary responsibility for a project is assigned to
a private party.
• That party designs, builds, and may even own, operate and
maintain the new facility.
PROJECT DELIVERY METHODS
Public Private Partnership (PPP)
Public Private Partnership is a delivery method whereby a public entity partners with a
private entity for the purpose of delivering public infrastructure.
• In the most typical of these variations, the private entity will be comprised of
o a design-build team,
o a maintenance company, and
o a lending company.
• The private entity will design, build, finance, maintain and/or operate the facility for
a set number of years, agreeing to meet specified performance criteria in exchange
for lease payments or some other compensation. At the end of the specified period,
the facility is returned to the public entity.
Various forms of PPP
• Compensation include a fee contract, in which the PPP firm receives its
compensation through a fee charged to the Owner, and a concession contract, in
which the PPP firm receives its compensation directly from the consumers rather
than the Owner.
PROJECT DELIVERY METHODS
Possible Schemes of PPP
CONSTRUCTION MANAGEMENT (CM)
Many owners engage construction managers (CMs) to
assist in developing bid documents and overseeing
project construction.
CM:
• A professional or a firm trained in the management
of construction processes.
• Generally interposed between the owner and some
or all of the other participants.
Two general types
–Agency Construction Managers (ACM)
–Construction managers-at-risk (CM-at-risk)
ACM
• ACM acts as an agent of the owner and extends the owner’s internal
capabilities in performing traditional owner responsibilities.
• The level of service by the ACM can range from on-call advice to full
project management.
• In some cases, the owner hires the ACM before design begins and ACM
may participate in the selection of and contracting with the designer or
might even be the designer.
CM-at-risk
• CM-at-risk typically contracts with the owner in two stages.
• Manages and undertakes services during conceptual & preliminary design
phases with the design professional.
• On completion of design, owner and CM-at-risk then agree on a price and
schedule for the completion of the construction work.
Advantages
• Reduced change orders and claims
• Owner approval of subcontractors
• Good communication among all parties
Disadvantages
• Higher cost to owner due to reduced competition
FAST-TRACKING
•Fast-track approach compresses the schedule by sequencing the start of construction
on underlying project elements (e.g. foundation, basic supporting structures) before
final design is complete for interior or adjacent elements.
•Fast-tracking is not a method of delivery, rather, it’s a management strategy within
delivery methods.
•While often successful in achieving schedule reductions, problems on fast-track
contracts can create a domino effect on follow-on contracts for the project.
•Fast-track is more successful on projects that are straightforward and have a high level
of predictability.