Unlike in the days when the choice of project delivery systems was between using a fixed price or a unit price contract, today’s construction industry has a plethora of systems. Alternative Project Delivery (APD) to choose from. These include traditional design-bid-build, design-build, design assistance, progressive design-build, construction manager at risk, integrated project delivery, to name a few. -a. With all of these options, deciding which APD system is best suited for each construction project requires careful thought and consideration.
“Selecting the appropriate APD system can play a critical role in establishing project procedures and processes that will facilitate project success within established time and budget parameters,” said Jim Gallagher, Director of Resolution Management Consultants, Inc. “It is equally important to verify that the selected APD system correctly allocates risks in accordance with the expectations and capacities of the parties. For example, attempting to speed up a project through the use of design-build may not be productive when the performance criterion is not defined or the owner is unwilling to relinquish control of the design. .
The successful delivery of a project requires that the parties understand their designated roles and responsibilities; establish open lines of communication regarding quality, timing and cost control; and address issues that arise in a timely and proactive manner. In the appropriate framework, each APD option should prove to be effective in enabling parties to achieve their performance and financial goals, while providing risk management tools.
Gallagher recommends using these six questions to help assess whether a specific APD system will allow your project to operate more efficiently and successfully:
- What is the project schedule? Unlike a design-offer-build process that separates design and build, other APD systems streamline the design-build process by allowing design and build to potentially overlap. While this can allow for expedited completion, it also requires parties to staff the project appropriately to manage their responsibilities and ensure swift responses to issues that arise.
- Who will make the final decision on the design? Has the owner established specific performance criteria or developed transition documents that will communicate basic design parameters to the design-build team? Will the owner retain control over specific design decisions, or will the designer-builder have the power to determine how best to meet the design criteria specified by the owner?
- Would the project benefit from early collaboration from entrepreneurs? Is the owner retains control of the design process by keeping the design company under a separate contract, early involvement of construction team members in the design process can foster a collaborative atmosphere focused on minimizing project risk that may be encountered during the execution of the work.
- How will the cost of construction be determined? Under the traditional design-bid-build system, the tendering process ensures that the cost of construction is reasonable and meets then-current construction industry standards. In other APD systems, the cost of construction may not be known until the design is nearly complete and / or commercial packages are purchased. As such, a budget or estimate may need to be established to ensure that the design and proposed construction cost matches the owner’s financial expectations.
- Is the scope of the project expected to change significantly? While change orders are inevitable in virtually all projects, some projects start with the knowledge that some work areas or project areas are undefined and / or will change as the project progresses.
- How will disputes be identified and resolved? The distribution of risks and responsibilities may vary depending on each contract and each APD system. As such, it is important to establish how disputes will be identified, escalated if necessary, and resolved in a timely manner so as not to disrupt the performance of the design and construction.
“These questions are just the beginning to get homeowners and contractors to consider whether traditional or alternative delivery is better in every circumstance,” notes Gallagher. “There are pros and cons for both. There is no one answer to apply across the industry.