Design/build's dilemma

By Dick Snow

To design/build or not to design/build? That's not only a question, it's a dilemma.

One thing's certain: Design/build has now wide acceptance as a project delivery system, and it's been working quite well for the private sector for some time now. But is it viable for use in public construction?

Legislation aimed at adding design/build to the public construction arena seems to be stalled. Public works contractors, used to the traditional lowest bid arrangement using engineering plans drawn by public works staff and/or consultants, just don't hanker to change.

Their position is quite understandable. But to charge that design/build for all public works projects leads to "Chicago-style" construction doesn't, excuse the expression, hold water.

First, all public works projects are not the sole province of water and sewer contractors. Public school construction, for example, can be considered public works, as can airports, bridges, dams and public parking garages. The latter projects can lend themselves to the design/build approach.

If design/build is applied to public works construction, it must be clearly defined or delineated, including the assignment of risk.

That, of course, means the enabling legislation must be carefully crafted, not necessarily an easy task.

Actually, the same thing can be said of private construction with enabling legislation and/or governmental rules.

The reality is that few, if any, public bodies have the tools and know-how to administer a design/build contract. So who's watching over our tax dollars? Of course, the lack of legal precedence in construction law adds to the problem.

In private construction, the onus of responsibility lies with the owner to clearly understand the process and its risks and to provide adequate monitoring of the process to avoid problems.

Private owners who choose to accomplish a design/build project are generally those who wish to deal with a single entity or source.

Documents available

To that end, the Building Owners and Managers Association recently reviewed and accepted a series of design/build documents created, proposed and supported by the Associated General Contractors of America.

These documents are standard form AGC documents that address design/build, design/build bidding and negotiated methods, including design service agreements. Devising these documents came from a joint BOMA/AGC committee established early last year.

The result is "The Property Professionals Guide to the Design/Build Process," available now from AGC's publications department.

Damien Hill, executive director of the AGC's Building Division, reports to us that AGC is not into developing design/build contracts for public works because a group of states currently prohibit this kind of construction, limiting the marketability of such documents to governmental units.

AGC, however, is developing a matrix for its member's usage of allowable project delivery systems around the country.

Hill acknowledges that design/build is acceptable as an "emergency" option for some public works projects, again, providing its usage is clearly defined.

So, what's this mean?

• The larger general contractors, most of them restricting themselves to private work, are employing staff architects and are advertising design/build within their capability.
  
  
• Public works contractors, on the other hand, may employ some engineering staffers but are not interested in taking on all of the risk involved in design/build.
  
  
• Architects, as a group, may be involved in one-time joint ventures with contractors to do private design/build work but are not generally interested in being the sole source for delivering the system. The drift of the AIA standard documents is the assignment of greater design risks to general or subcontractors.
  
  
• Public works officials do not appear to be anxious to diminish their work by supporting design/build and thus causing departmental layoffs and suspensions.
  
  
• It is apparent, though, there are enough public works entities, certainly in Wisconsin, who will support the use of design/build in "emergency" situations, even without the entire legislative package in place.
  
  
• Design/build is no longer a unique project delivery system for medium and large projects and has taken its place alongside the low bid, turnkey and construction management processes as a viable delivery system.
  
  
• It is also clear that design/build has become an accepted marketing tool for many larger general building contractors. Just look at letterheads, calling cards, project signs and job shacks all over the state.

Slowly evolving

The acceptance of the system in Wisconsin public works will continue to evolve slowly as long as public works contractors "stay home."

We believe we will continue to see more usage of project labor agreements as unions seek to protect their turf; organized labor is not enthusiastic about design/build because unions think it doesn't help preserve jobs.

In summary, design/build has made greater progress in the private sector than in the public sector, but the public sector, particularly on larger, more complex projects, will witness more incursions of the system.

Will design/build ever supplant the traditional bid? Not likely as long as the public thinks the bid system delivers more bang for the buck.

In the end, no project delivery system is immune from errors in execution.

But do stayed tuned, there's plenty of material upcoming for hot stove discussion.

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