Project Delivery Methods for Construction Projects

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The journey is as important as the end result. All construction projects require a gamut of services viz., Planning, Design, Finance, Construction and other necessary services for organizing, executing and completing a building facility. In a Construction Project, there is no single project delivery method which is “one-size-fits-all”. Each method satisfies specific purposes and is best suited for certain types of projects, choosing which, becomes imperative to the success of the project.

Selecting a construction project delivery method mainly depends on two factors:

  • Type of project (Repair, renovation, new construction)
  • Characteristics and requirements of the Project Sponsor/Owner Viz., Budget, Design, Risks, Schedule and Expertise of the Sponsor/Owner

The main stakeholders in a construction project are the Sponsor/Owner, Designer/Architect and the Contractor/s and depending on the delivery method we choose, these roles may overlap.

Contract:

A contract is an agreement with specific terms between people or entities where there is a promise to do something in return for some consideration. In terms of construction, the contract defines what is to be built, defines the period for design and construction completion. The contract is enforceable by law.

The following are the most commonly used types of project delivery methods:

  • Design-Bid-Build (DBB)
  • Design-Build 9DB)
  • Construction Manager at Risk (CMAR)
  • Integrated Project Delivery (IPD)
  • Public-Private-Partnership (3P)

1. Design-Bid-Build (DBB)

Also known as hard bid or the “traditional” form of project delivery, the Designer/Architect and the Contractor/s work directly for the Sponsor/Owner who direct the project and is supposed to result in the lowest construction cost. This method presents plenty of opportunities for the Sponsor/Owner’s input on the project starting with the appearance of the building being designed by the architect. Here there are two contracts – one for Design and the other for Construction.

While this method provides a clear process to address litigations if any, however, it is best suited for projects that are simple and those which are not under a tight time schedule and limited budget, as this method usually suffers time and cost overruns.

2. Design-Build (DB)

In a typical DB project delivery method, the Sponsor/Owner hires a team under a single contract to deliver and complete the construction project from start to finish. Here, some of the advantages of this method are that is time saving, cost saving, one point of contact, fewer change orders and reduced risk to the sponsor/owner/. Loss of control of design and loss of quality due to minimal involvement of the sponsor/owner are some of the main disadvantages of the DB method.

3. Construction Manager at Risk (CMAR)

In this project delivery method, the Sponsor/Owner hires a Construction Manager (CM) to oversee the design process and quality of construction. The CM is treated as the owner’s representative and will manage the contract on the sponsor/owner’s behalf. This makes CMAR ideal for project sponsor/owners who want an expert’s help in managing the project and communicating between parties. The CM accepts the risk for meeting the project deadline and sponsor/owner’s cost requirements, which are usually expressed as a Guaranteed Maximum Price (GMP). This insulates the sponsor/owner from price escalations, if any, which will be borne by the CM. This method helps to keep the project on track in terms of cost and time schedule.

4. Integrated Project Delivery (IPD)

In this relatively new project delivery method, the Sponsor/Owner and other stakeholders such as the Designer/Architect, Contractor etc., share the risk and reward unified under a single contract. It is based on the ideology of lean construction. IPD strives to involve practices through all phases of design and construction to improve project efficiency and reduce wastes. It is best suited for projects in the private sector that are complex, under a tight schedule, or maybe mostly undefined. Public entities usually cannot use IPD as a delivery method due to the lack of a bidding component.

5. Public-Private-Partnership (3P)

In the construction industry, the 3P model involves a contract established between a government (Public) entity and a private corporation/company (Private) to fund, construct/renovate, and usually operate and maintain the public infrastructure. Projects like affordable housing and infrastructure are often the result of these types of agreements. Like private projects, they are controlled by a private company which helps create efficiency and add expertise. Like public projects, there’s a steady project owner, decreased payment risks, and a project that will greatly benefit the general public.

Some of the PPP project delivery methods are Build, Operate and Transfer (BOT), Build-Own-Operate (BOO) or Build-Own-Operate-Transfer (BOOT), and Design-Build-Finance-Operate (DBFO) or Design-Build- Finance-Operate-Maintain (DBFOM)

The ultimate success of a project delivery method depends on the level of collaboration, quality, and experience of the owner and service provider/s. Each of these project delivery methods has its own merits and potential shortcomings. Hence, it is important to choose the best method before embarking on a particular project.

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