Project Delivery Methods

The key stakeholders in a built environment project are the owner, the architect
and designers, and the contractor. Depending on the delivery method you
choose, these roles may overlap.

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1. Design-bid-build (DBB)/Traditional: Design-bid-build is the most commonly used
method for completing built environment projects. In this delivery method, the design
has to be completed before construction starts.

Design and construction are usually performed by two different parties who interact
directly and separately with the owner.

This delivery method consists of three distinct phases:

a. Design phase—where the owner hires a designer to design a new facility,

b. Bid phase—where contractors review documents and clarify questions before

bidding, and

c. Build phase—where the building commences once a winning bid has been
chosen by the designer and owner.

2. Design-build (DB)/turnkey: The design-build method was created to reduce the

delays encountered by the design-bid-build method. It does this by replacing the
designer and the contractor with a single party who fills both of these roles, and is called
a design builder.

The design-builder, typically an architect, engineer or contractor, serves as the owner’s

single contact for the entirety of the project. While this allows for efficient
communication, it also means that the design builder is singularly accountable for the
outcome of the project.

In the DB process, the owner drafts an initial design before requesting proposals from
design builders. The owner will then select the best value proposal that doesn’t sacrifice
quality. Once a proposal has been approved, the design builder’s team gets to work and
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construction can begin immediately, thus reducing the time and interface points
between among stakeholders.

A Construction Industry Institute (CII) study of 351 projects in 37 states compared the
cost, schedule, and quality performance of DBB, CMAR, and DB deliveries and found
that:

• DB costs at least 6% less than DBB.

• DB is at least 33% faster than DBB.

• DB provides at least 10% better quality than DBB.

• DB delivery speed is at least 23% faster than CMAR and 33% faster than DBB.

3. Construction management at risk (CMAR): Construction management at risk

(CMAR), is derived from the design-bid-build process. The key difference between DBB
and CMAR is that instead of the designer overseeing the design process and
construction quality, a construction manager is hired by the owner to oversee the entire
project and provide the owner with a guaranteed maximum price (GMP) during the
design phase.

The GMP is a maximum cost and a promise from the construction manager that the
cost for the project will not exceed the maximum cost.

The construction manager acts as the owner’s representative and advocate through
each step of the construction process from preconstruction, to design and bidding,
through construction. This makes CMAR ideal for project owners who want an expert’s
help managing their project or communicating among parties, and sometimes CMAR

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allows owners to remove themselves from the majority of the construction process
altogether.

The owner brings an initial design to the construction manager who will then work with
designers to draw up formal plans. It is the construction manager who works on behalf
of the owner to complete the design process and determine the best value design for
construction. Once the design is complete and approved, the construction manager will
manage the bidding process to meet the owner’s needs and ensure that the cost
remains within the GMP.

Once construction begins, the construction manager will work with the contractor to
schedule construction phases, oversee the quality of the contractor’s work, and
coordinate any needed change orders.

4. Job order contracting (JOC): Job order contracting (JOC) is an indefinite-delivery,

indefinite-quantity (IDIQ) project delivery method. Thismeans that multiple projects can
be completed over the life of one longterm contract, as opposed to the single-project
contracts, e. g., DBB, DB, and CMAR.

JOC is an ideal project delivery method for owners who complete a high volume of
construction projects over the course of each year. Owners take bids from contractors
at the beginning of the project rather than take a bid for each project. This allows them
to access their services without having to re-bid throughout the entire life of the contract.

The JOC project delivery method is predicated on a catalog of construction tasks with
preset prices, which is called the construction task catalog (CTC). The CTC exists for
the entirety of the contract and allows owners to access contractor services at any point
during the agreed time span without having to renegotiate prices for each project.

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Rather than bidding on individual projects, contractors will place bids by adding an
adjustment factor to the CTC to account for their overhead, profit, and other operating
costs.

Once the contract is awarded, the winning contractor can perform work for the owner at
any point needed. Each project will be preceded by a joint scope meeting to make sure
all parties agree on what work needs to be completed and to set a detailed scope of
work (SOW) for the project.

Once the scope is set, the contractor will submit a price proposal for the total project
cost, the owner will review the price proposal, and work will commence. Procurement
for traditional projects can take 6 months or more. JOC cuts that down to a few weeks.

5. Multiple award task order contract (MATOC): Multiple award task order contract
(MATOC) is also an IDIQ method and is most commonly used by the military and the
federal government.

MATOC incorporates a pool of contractors under a single master contract. Because of

this, the terms JOC and MATOC can be used interchangeably for certain projects.

MATOC begins with a master or umbrella contract defining the scope of the work
(SOW) to be completed. The owner will then select resources from the pool of
contractors they want to be included in the bid; only those contractors selected can take
part in the bidding process. When the winner is selected, a more targeted contract is
then written between the owner and selected contractor.

6. Construction management multiprime (CMMP): Construction management

multiprime (CMMP) is a variation of DBB and is where the owner acts as a general
contractor and goes to contract with each of the design team members and major trade

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contractors. This method is best for owners who have a lot of experience managing
construction projects and want more control.

In the CMMP process, the project is divided into three phases:

a. Design

b. Engineering

c. Construction

CMMP contracting works best for emergency projects or projects that need the
schedule to be reduced.

7. Public–private partnership (PPP or P3): Public–private partnerships (PPP or P3)

are contracts that are used for partnership projects between private and public entities,
e.g., affordable housing and infrastructure projects.

Publicly funded projects are subject to federal or state prevailing wage regulations.
Privately funded projects are usually not.

When it comes to payment protection, mechanics liens can be used on projects where
the property is owned by a private entity, but bond claims are needed to collect on
publicly owned projects.

8. Integrated project delivery (IPD): Integrated project delivery (IPD) is the latest
addition to the list of project delivery methods and focuses on collaboration and shared
ownership of risk.

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According to the Lean Construction Blog, IPD is “a delivery model for delivering
construction projects using a single contract for design and construction with a shared
risk/reward model, guaranteed costs, waivers of liability between team members, an
operating system based on lean principles, and a collaborative culture.”

In IPD projects, all project members are selected before the design process begins and
are contractually connected under one contract.

While implementing IPD, the primary goal of the integrated method is to spread liability,
responsibility, risks, and rewards among the stakeholders in a construction job. When
paired with lean construction management, waste and cost savings can be immense.

Given how many stakeholders are involved, getting the IPD contract right at the
beginning of the process is time-consuming.

9. Direct labor: Direct labor is a method of using professionals and tradesmen

employed permanently or temporarily by the clients to directly execute construction
projects.

Direct labor is defined by Fagbenle Olabosipo, a university professor, as an

arrangement “whereby a client organizes the various operations involved in the
construction and uses both the materials and manpower at his disposal towards the
realization of a successful project.”

This approach is used by large authorities where the owner organization performs both
the design and construction using its in-house labor force. This type of delivery method
is most suitable for small, low-risk projects.

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10. Build-operate-transfer (BOT): In this approach, a business entity is responsible for
performing the design, construction, long-term financing, and temporary operation of the
project.

At the end of the operation period, which can be many years, operation of the project is
transferred to the owner.

This approach has been extensively used in recent years and is expected to continue.
An example of its use is in tolled roads and bridges or underground train lines. A
consortium of companies shares the cost (design, construction, financing, operation,
and maintenance) and the profits gained from user fees, for a stipulated number of
years.

Afterwards, the project returns to the government to become publicly owned. This
approach has also been used extensively in large infrastructure projects financed by the
World Bank in parts of the world that cannot afford the high investment cost of such
projects.

11. Professional construction management (PCM): The owner appoints a

professional construction management (PCM) organization to manage and coordinate
the design and construction phases of a project.

Adopting a teamwork approach allows for innovative approaches of overlapping design

and construction, e.g., fast tracking.

The PCM approach should be considered when there is a need for time saving and
when the owner has insufficient management resources because there is an overlap of
services offered by the PCM organization and those traditionally performed by the
architect, engineer, and contractor.