Project delivery method

A project delivery method is a system used by an agency or owner for organizing and financing design, construction, operations, and maintenance services for a structure or facility by entering into legal agreements with one or more entities or parties.

Types

Common project delivery methods include:

Design-Bid-Build (DBB) or Design-Award-Build (DAB)

An owner develops contract documents with an architect or an engineer consisting of a set of blueprints and a detailed specification. Bids are solicited from contractors based on these documents; a contract is then awarded to the lowest responsive and responsible bidder.

DBB with Construction Management (DBB with CM)

With partially completed contract documents, an owner will hire a construction manager to act as an agent. As substantial portions of the documents are completed, the construction manager will solicit bids from suitable subcontractors. This allows construction to proceed more quickly and allows the owner to share some of the risk inherent in the project with the construction manager.

Design-Build (DB) or Design-Construct

An owner develops a conceptual plan for a project, then solicits bids from joint ventures of architects and/or engineer and builders for the design and construction of the project.

Design-Build-Operate-Maintain (DBOM)

DBOM takes DB one step further by including the operations and maintenance of the completed project in the same original contract.

Build-Operate-Transfer (BOT)

BOT represents complete integration of the project delivery: the same contract governs the design, construction, operations, maintenance and financing of the project. After some concessionary period, the facility is transferred back to the owner.

General Contractor/Construction Manager (GC/CM, GCCM, or CM/GC)

An owner will hire a contractor to act as a combined agent and general contractor. As substantial portions of the documents are completed, the GC/CM or CM/GC will solicit bids from suitable subcontractors. These may be bid openly (similar to DBB) or via an alternative subcontractor selection process (e.g. M/E CCM for a mechanical/electrical contractor/construction manager).^[1] Subcontractors and sub-CCM's are frequently contracted to the GC/CM or CM/GC but may be contracted directly to the owner. This may allow for accelerated construction and confirmation of pricing, sharing of risk between owner and contractor, and flexibility in construction investigation, sequencing, and procurement.

Integrated Project Delivery (IPD)

A project delivery method in which the interests of the primary team members are aligned in such a way that the members can be integrated for optimal project performance resulting in a collaborative, value-based process delivering high-outcome results to the entire building team.^[2][3][4]

Public-private partnership (PPP, 3P, or P3)

A public–private partnership is a cooperative arrangement between one or more public entities (typically the owner) and another (typically private sector) entity to design, build, finance, and at times operate and maintain, the project for a specified period of time on behalf of the owner.

Trends in delivery method prevalence

Though DBB is now used for most private projects and the majority of public projects, it has not historically been the predominant delivery method of choice. The master builders of centuries past acted both as designers and constructors for both public and private clients. In the United States, Zane's Post Road in Ohio and the IRT in New York City were both originally developed under more integrated delivery methods, as were most infrastructure projects until 1933. Integrated Project Delivery offers a new delivery method to remove considerable waste from the construction process while improving quality and a return to more collaborative methods from the past. In an effort to assist industry professionals with the selection of appropriate project delivery systems, construction management researchers have prepared a Procurement Method and Contract Selection Model, which can be used for high level decision making for construction projects on a case by case basis. ^[5].

Conceptual differences between delivery methods

There are two key variables which account for the bulk of the variation between delivery methods:

• The extent of the integration of the various service providers.
• The extent to which the owner is directly financing the project.

When the various service providers are segmented, the owner has the most amount of control, but this control is costly and doesn't give each provider an incentive to optimize its contribution for the next service. When there is tight integration amongst providers, each step of the delivery is undertaken with future activities in mind, resulting in cost savings, but limiting the owner's influence throughout the project.

The owner's direct financing of a project simply means that the owner directly pays the providers for their services. In the case of a facility with a consistent revenue stream, indirect financing becomes possible: rather than be paid by the owner, the providers are paid with the revenue collected from the facility's operation.

Indirect financing risks being mistaken for privatization. Though the providers do have a concession to operate and collect revenue from a facility that they built and financed, the structure itself remains the property of the owner (usually a government agency in the case of public infrastructure).

References