Introduction
Construction project delivery methods define the approach for completing a project and the contractual relationships, as well as the assignment of risks. Roles can vary depending on the method, with some methods allowing the owner more control than others. Before a project begins, the construction project delivery method should be selected. While it’s important to be flexible, staying the course is important when it comes to a smooth construction project. Therefore, you’ll want to avoid changing contracts or management methods once a project has begun. The most common methods are Design-Bid-Build and Design-Build, but we encourage you to explore options and find what works best.
Read on as we review 7 types of construction project delivery methods and their pros and cons.
What are the different types of construction project delivery methods?
Construction project delivery methods define approaches for managing a construction project. The approach best suited for a project depends on the type of project, how much control and risk the owner wants to assume, timeline, and budget. Let’s review the 7 main types of construction project delivery methods.
#1. Design-Bid-Build (DBB)
Design-Bid-Build (DBB) is a traditional project delivery method. Under separate contracts, a design team and general contractor work together for the owner. The project starts with the design team creating documents such as drawing plans. Next, the finished design can be bid on by competing general contractors. The owner can facilitate the process of handling bids and selecting a general contractor However, the design team can have involvement in providing input on who they prefer to work with. Upon selection of the winning general contractor, a contractual agreement can be signed so that construction can begin. Once signed, materials and equipment can be ordered.
The Design-Build (DB) method is a bit simpler for the owner compared to the DBB method. This method entails hiring a single firm for project design and construction. From beginning to end, the project can be led by a contractor or architect, depending on who is hired. Projects that have a complex design are often led by architects. It’s believed that by combining efforts of the design and build team, efficiency can improve. With both teams able to provide expertise from the start of the design to the completion of the build, projects can move along faster. A newly-developed two stage approach, progressive design-build, works to mitigate risks by offering an exit strategy to owners and contractors who fail to reach an agreement during the design phase.
#3. Design-Negotiate-Bid
Similar to the Design-Bid-Build method, the Design-Negotiate-Bid has separate contracts with the architect and contractor. It combines a hybrid approach of the Design-0Bid-Build and Design-Build models. In the Design-Negotiate-Bid method, the owner can select the contractor privately as opposed to selecting through a bidding process. Final pricing is only provided by one contractor. Contractors may compete early on, but are not all asked to deliver final pricing. This can encourage collaboration between the architect and contractor. Under the contractor, you can find various subcontractors. This method is often recommended for private projects.
#4. Construction Manager at Risk (CMAR)
Construction Manager at Risk (CMAR) puts most of the control and more liability in the hands of a construction manager. In this approach, the construction managers serve as the owner’s representation during design and construction phases. Similar to the Design-Bid-Build method, the CMAR separates the design and building process. The owner’s cost agreement is generally expressed as a guaranteed maximum price. If the construction manager fails to meet deadlines or construction costs are higher than expected, the construction manager can be held responsible. For the construction manager, overestimated costs can result in more profit and underestimate costs can result in less profit. With a common goal of keeping costs down and completing the project as quickly as possible, the construction manager and owner can share interest.
#5. Construction Management Multi-Prime (CMMP)
Owners that want more control can opt for a CMMP. With this method, the owner assumes the role of the general contractor. The owner will manage all contracts related to the project. To effectively carry out this method, owners should have experience in managing construction projects.
#6. Public-Private Partnerships (PPP or P3)
Hence to the name, Public-Private Partnerships are projects that result from a partnership with a private and public entity. Examples of these types of projects can include affordable housing or transportation projects. The public party manages the project while a private party is hired to do the construction. The partnership can benefit the greater good of our communities, funding the local economy while providing upgrades for the community. PPP projects require a detailed understanding of the relationship and inner-workings, as they can be more complex.
#7. Integrated Project Delivery (IPD)
As a newer addition to construction project management methods, IPD is gaining popularity. Favored for equally sharing project risk and fostering collaboration, the IPD method involves all team members contractually, bound with one contract. Before the design begins, all parties will be selected with a designated role from start to finish. With everyone working toward a common goal under one contract, greater efficiency can be achieved.
How to choose the best project delivery method for your project?
To choose the best project delivery method for your project, consider the type of project, how much control you want, timeline, and budget to start. You may also want to consider the relationships you have with contractors and architects. If you maintain strong, trusting relationships you may feel comfortable assuming more control. Otherwise, you may want to work with a construction project manager to run the show. Every project has its own unique restrictions and goals that should also be considered. As you start the journey of building a masterpiece, keep efficiency in mind from the very beginning. Regardless of the approach you choose, ALICE Technologies can help optimize and de-risk construction projects. Schedule a free demo today to learn more!