What’s the Best Delivery Method?

What’s the Best Delivery Method?

There’s more than one delivery method an owner can call upon to bring a building project to life, but they’re not all equal. Some methods are more efficient than others and can save a great deal of money, but which ones are the best?

The last 20 years hasn’t brought us much research on the subject until recently. The Construction Industry Institute (CII) at the University of Texas at Austin worked with the Virginia-based Charles Pankow Foundation, the University of Florida, and the University of Colorado Boulder to develop a cost-benefit comparison of the three leading delivery methods:

  • Construction manager at risk (CMR),
  • Design-bid-build (DBB),
  • And design-build (DB).
    • (Jump down to our Cheat Sheet for explanations of the three methods.)

The new research provided a look at which stand out as the most efficient and cost-effective ways to bring a construction project to life.

 

The Big Three: CMR, DBB, and DB

Back in 1998, the CII published a report comparing CMR, DBB, and DB methods across more than 350 construction projects of varying size, sector, complexity, and location. At the time, they found that DB projects outperformed both CMR and DBB in terms of unit cost, schedule growth, cost growth, and all metrics relating to the speed of delivery.

But over the last two decades, many things about the construction industry and the way projects are developed has changed drastically. Projects have become more complex than ever and the entire economy is fundamentally different than it was in the 90s. As a result, the CII set out to determine whether or not DB held up as the most efficient method.

Last year, 212 contemporary construction projects were compared against the original 350 to develop the new findings. This time around, researchers once again found that DB projects are still delivered faster and with greater reliability in cost and schedule performance, even though the market is so different today. Some of the key findings included:

  • DB is less expensive.
    On a cost-per-foot-basis, DB projects are 1.9% cheaper than CMR and 0.3% cheaper than DBB.
  • Cost growth is more controlled with DB.
    DB projects see 2.4% less cost growth than CMR and 3.8% less than DBB.
  • DB projects stay on schedule better.
    DB projects see 3.9% less schedule growth than CMR and 1.7% less than DBB.
  • DB is faster.
    DB projects are 13% faster than CMR during the construction phase and 36% faster than DBB. Additionally, from design through final completion, DB projects are delivered 61% faster than CMR and 102% faster than DBB.

“It’s no surprise that most states have embraced design-build as a better way to deliver projects vital to our economic growth. Whether it’s a billion-dollar airport or small community library, this research confirms design-build continues to deliver innovative projects that save time and money. Design-build is clearly a better way to build,” said Lisa Washington, executive director of the Design-Build Institute of America, based in Washington, D.C.

 

The Verdict

Across two different decades and very different economic climates, it’s clear that the design-build method remains by far the most efficient and affordable strategy for a project of any size. Though each of the big three offer the own unique benefits, if you’re looking to complete a project with the fewest amount of surprises, the lowest costs, and the fastest schedule, then design-build is definitely still the best option to go with.

 

 

 


Cheat Sheet – Important Terms to Know:

Construction Manager at Risk (CMR or sometimes CMAR):

This is a delivery method which entails a commitment by the construction manager to deliver the project within a guaranteed maximum price. By giving the owner the price prior to bids, the CMAR assumes the risk of bids coming in higher as they are contractually bound to deliver the project per the plans and specifications and any additional allowances as defined in their pricing.

Design-Bid-Build (DBB):

DBB is usually seen as a traditional U.S. project delivery method. After the planning, the owner’s design team completes construction plans to solicit competing bids from general contractors. The construction contract is usually awarded to the lowest bidder. Builders are usually not involved until after design is complete.

Design-Build (DB):

In this model, a single party is contractually responsible to the owner for both design and construction of a project. The design-build entity can take various forms, including an integrated firm, a team, a developer, or others. The design-builder encourages early participation by key trade contractors and awards other trade contracts as a general contractor would.

Sources: Dodge Data & Analytics, ccgov.net


 

Category Bottom Line, Features