Put yourself in the shoes of a facilities manager who is responsible for constructing a facility for the first time. You call people you trust to determine how you should go about it, and ask each of them to put it in terms you can understand. As each of your trusted counselors gives you advice about the process you should use to construct your project, they seem to be describing the same basic things with different terminology. And they all have a strong opinion about the best way to do the job.
It all begins to run together. So you let the process run its natural course, or you pass the responsibility for making the decision about which delivery process to use to a consultant who speaks the language. You wash your hands of the whole thing and hope you’ve made the most cost-effective decision.
There are various terms that describe and construction services – hard bid, lump-sum contracting, team approach, bridging, negotiated, fast track, CM, CM at-risk, partnering, design-build, design-bid build – and many variations on these. But there are really only two delivery methods – traditional bid and team approach.
So why are there so many ways to say the same thing?
No matter which delivery method is applied – the traditional bid or the team approach – the basic elements are the same regardless of the size or type of project. Every project goes through need determination, planning, design, construction and occupancy. Whether you are building a new building or renovating an existing structure, you must still determine how much space you need; plan how you will configure the space; have someone design the space; build the space; and then occupy the space.
In the traditional bid approach, there is a clear separation between design and construction phases, typically known as the bid phase. Using this method, cost is usually the predominant factor for selecting who will be delivering your construction services.
In a team approach, most team members are on board at the outset and were selected because of their qualifications and their ability to make the process value– and quality-driven.
When you take the terms mentioned above and analyze how each of these presumably different delivery methods works, you find that every one of them belongs in one of the categories:
Traditional bid: Hard bid, hard money, lump-sum contracting or design-bid build
Team approach: Negotiated, CM at-risk and construction management
Several terms can belong in either of the two categories of delivery methods. Examples include design-build and bridging, which both address different ways of assigning the design and construction responsibilities. The design-build process can be competitively bid (traditional bid) or negotiated (team approach). The same is true for the bridging concept. Where one architect establishes the design concept and a second architect produces the working drawings.
Another term that can be placed under either heading is fast track. In a fast-track project, the phases of the process overlap to accelerate the schedule. In some cases, you will fast track by breaking out elements of the construction documents and hard bid and award each element to separate contractors. On the other hand, the team approach, by nature, facilitates a fast-track process. You are able to take advantage of having all your consultants involved during the design phase of the project and the ability to phase construction early, such as site work, foundation and structure. One team member, usually the contractor, eventually takes the risk.
So, if there are really only two delivery methods –- traditional bid and team approach – who benefits from clarifying how we label our processes and methods, and who benefits from putting everyone on the same page of our industry dictionary?
Simply put, everyone involved benefits.
Defining the type and scope of the relationship early in a project, and ensuring that everyone understands which method is being used, allows all players to spend their time communicating, meeting your needs, and delivering the best possible product. And that benefits the entire industry.
From service purchasers to the engineers, suppliers and vendors, the entire design and construction industry will do a better job if we clarify communications. Consider how quickly we could turn efforts to more important arenas and get about the business of improving awareness of the quality and value commitment we make if communications were clarified. When moving forward with a project, step one should be deciding whether to use a traditional bid or team approach. Step two is how to assign responsibilities and risks within the team, and step three is to prepare contracts consistent with the decisions made in step two.
The contract between the school and the consultant describes and defines the relationship between the two parties. Rather than picking a consultant and forcing relationships to work with the contract, the relationship and responsibilities should be determined first. A contract then should be prepared to match the desired relationship.
In deciding which delivery method to use, facilities managers often work backwards by picking a contract type and assigning the responsibilities too quickly. They realize too late that they have made the step one decision (traditional bid or team approach) without knowing they were making it. Why should you care? It matters because the success of a project is often directly correlated to the delivery method used on the project. As a facilities manager, you make the decision at the very beginning of the project which of these two delivery systems you will have on your project.
About the Author: Michael Kenig is Vice Chairman of Holder Construction in Atlanta. He specializes in assisting Owners during the planning stage of their projects, helping them set their projects up to be successful. Michael has also written several articles on successful project delivery. He holds a degree in Construction Engineering and Management from Purdue University.
This article is published in ConstructionRisk.com Report, Vol. 2, No. 1 (Jan 2000).