Design-bid-build - In this process, the building owner contracts separately with a designer and a contractor. The owner asks the designer to provide all of the design work while he or she then solicits fixed-price bids from contactors to perform the construction work. Once the design is completed, the construction contractor is selected and has no input on the design.

Construction management at risk - In this process - similar to design-bid-build - the building owner contracts separately with the designer and the construction contractor. The construction contractor performs construction management and work, for a fee. This contractor usually has input in the design process.

The Comparison

These processes were evaluated by Victor Sanvido, a senior vice president for Southland Industries, Irvine, Calif., using data he accumulated from studying different projects.

Sanvido said that the average unit costs of design-build projects was more than 6 percent less than design-bid-build and 4.5 percent less than construction management at risk projects. He added that the cost of construction management at risk projects was almost 2 percent less than design-bid-build.

"Design-build projects average at least 12 percent faster than design-bid-build and 7 percent faster than construction management at risk in terms of construction speed," said Sanvido.

"When adding the impact of facility design, on average, design-build projects were found to be delivered at least 33.5 percent faster than design-bid-build projects and 23.5 percent faster than construction management at risk projects."

School Projects

Sanvido analyzed 39 school projects in which all three processes were used. Design-bid-build was used for 24 projects, design-build for seven projects, and construction management at risk for six projects.

He said that school projects usually have a high unit cost. In fact, in many cases, these costs run higher than some corporate or complex office structures. The reason: schools are higher traffic buildings with more specialized areas. The approval process is more complex, too - and takes longer than projects in the private sector, according to Sanvido.

Sanvido said that schools using design-build have a lower value of cost growth than do other school projects. "In general, these school projects, regardless of project delivery method, are fairly close to the industry median of 3.05 percent [cost growth]. Cost growth refers to the rate at which projects exceed the original budget.

"Schedule growth for all three processes are closer in terms of percentage schedule growth with exception to construction management at risk. The industry median for schedule growth is 0 percent."

He said that his study reaffirmed that the design-build projects "carry the most certainty in terms of scheduling."

"That may be the nature of the beast however. Schools have a more cumbersome approval process, as individuals involved in the decision making are not normally involved in construction issues - and decisions are not made as quickly."

Sanvido's research came about while he was a professor at Penn State University. The resulting information was subsequently published and is considered a leading work in the field of commercial delivery process comparisons. Design-build has a definite edge in cost control once a project has begun, and it appears to be growing in popularity as more building owners become familiar with the various benefits.

Publication date: 02/21/2005