The Engineer’s Project Delivery Method Primer: Uniform Definitions and Case Studies

This chapter introduces the concept of project delivery and identifies differences between project delivery methods (PDMs) and other methods that are often confused with PDMs. A definitional framework for PDMs is followed by a brief discussion of the three primary forms of PDMs (the “Big Three”): Design-Bid-Build (DBB), Design-Build (DB), and Construction Manager-at-Risk (CMAR). Some pre-eminent concepts for selecting a PDM for a given project are then explored, along with legal principles associated with PDMs. DBB, DB, and CMAR each carry their own inherent risk profile and each permit various levels of collaboration and integration between the parties delivering the project. Some common misconceptions observed in defining PDMs are also identified.

Design-Bid-Build (DBB) has long been considered the “traditional” PDM, having been used in both public and private projects since the end of the 19th Century. This chapter details applications of DBB, focusing on fundamental elements, including the advantages and disadvantages of DBB project delivery. DBB delivery involves two contracts, one for design and the other for construction. Some benefits of DBB are identified that are germane to how procurement and contracts are set up. As a delivery method in which the lowest priced bidder is most selected in an open market competition, DBB is perceived as giving owners the best deal for their projects and enabling them to meet budget restrictions.

Traditional Design-Bid-Build (DBB) project delivery relies on a low-bid contract award to a general contractor based on a completed set of project construction documents. This chapter discusses several variations on the DBB concept that have been successfully employed to overcome some of the challenges associated with traditional DBB. These variations include: those, such as DBB Best Value (DBB-BV), which create mechanisms to evaluate whether a contractor’s past performance will impact its ability to successfully compete for future work; those, such as Design Sequencing (DS), which consider ways to permit construction to begin before the entire design effort is complete while preserving the low-bid award process; and those that combine alternative contracting approaches such as alternative technical concepts (ATCs) with DBB to gain early contractor input during procurement.

The Construction Manager-at-Risk (CMAR) delivery structure is based on retaining the construction contractor early in the life of the project to provide two phases of service. CMAR has its roots in construction manager as agent, with a professional construction manager hired to represent the owner and furnish the required technical knowledge and experience to effectively manage both the design and the construction of a specific project. Because the public sector is driven by statutes and regulations, federal, state, and local agencies have been more constrained in using CMAR until recently, owing to the broad attention given to how to deliver projects more effectively. This chapter explores applications of CMAR in federal, state, and local agencies. Examples are given of legal principles associated with DBB that have characteristics like those of CMAR, with the owner holding separate contracts with the designer-of-record and the construction contractor.

This chapter focuses on the widespread terminology issues in sectors of the construction industry that use Construction Manager-at-Risk (CMAR) project delivery. The following variations are described: CMGC with an ICE—Utah DOT version; CMAR with public bidding—Oklahoma Department of Central Services version; and Construction Manager as constructor (CMc—US General Services Administration (GSA) version. Variations in CMAR project delivery practices also include variations in which pricing provisions are incorporated in the CMAR contracts. Several variations involving the pricing provisions are described. All CMAR projects are typically priced using a project value that is less than, or equal to, the owner’s budget for the project. In most commercial and many public CMAR projects, the project pricing structure is called the GMP, and the rules for calculating that value are contained in the CMAR preconstruction contract.

Design-build (DB) project delivery is significantly different from other project delivery methods because it involves the merger of design and construction services into a single contract. This chapter focuses on procurement issues as well as other salient aspects of traditional and progressive DB project delivery. Some common attributes shared by Progressive DB and construction managers-at-risk are identified. The following three topics are explored: using LPTA selection processes, alternative technical concepts (ATCs), and mentally transitioning to DB. Each of these approaches is evaluated on how it addresses road issues that span industry sectors and have a major impact on the success of DB projects.

This chapter explores the unique characteristics of three categories of variations occurring in DB project delivery: inclusion of alternative technical concepts (ATC) in the DB procurement process; engineering, procurement, and construction (EPC) applications in the heavy power, manufacturing, and process industries; and delivery of projects through engineering, procurement, and construction management (EPCM), which has attributes of both DB and professional construction management. Extensive use of EPC in international power, as well as in petrochemical and industrial projects, is also discussed. ATCs are investigated as a way of encouraging innovative solutions during the procurement phase of a DB project to address design and construction problems associated with solicitation of DB projects.

This chapter provides an overview of public-private partnerships (P3s) and describes how this delivery process has been used in the United States. Specific focus is on P3 projects in which contractual relationships between public agency and private sector partners expand beyond design and construction and bundles financing, operations, and/or maintenance. Differences between risk profiles of P3 projects and those of other PDMs are specified. Other significant differences between projects delivered by P3 and those delivered by other delivery systems are also examined. Examples are provided of P3 projects in the United States that are organized around transportation, water and wastewater, and social infrastructure.

This chapter presents a procurement method that can be used with all indefinite delivery/indefinite quantity (IDIQ) contracting in the US federal sector. IDIQ contracting on the part of public agencies and private owners is explored, including master services agreements, job order contracts, multiple award task order contracts, push-button contracts, on-call contracts, master contracts, and stand-by contracts. The impact of the legal and contractual issues associated with the underlying delivery system on the performance of each work order is also investigated. Once the contract is awarded, the party contracting with the owner performs under contract terms that are virtually identical to single contracts awarded without an IDIQ process.

The relational contracting concept was first introduced in the early 1990s by British Petroleum (BP) in the North Sea. Details are given on Alliances and Integrated Project Delivery (IPD), BP’s project alliancing model, which not only became a model for private sector projects, but also became the basis for Australia’s and New Zealand’s public sector. Australia’s and New Zealand’s experiences are then examined; these countries have used this delivery model extensively. Also discussed is the introduction of IPD in the United States by Sutter Health in the early 2000s as a radically different approach to project delivery that was modeled after the alliancing relationships started by BP and then modified over time by Australia and New Zealand. Some significant barriers that relational contracting must overcome to become fully accepted in the US public sector are identified.

This chapter focuses on the four international project delivery methods, along with similarities to, and differences from, their US counterparts: alternative life cycle cost bidding (ALCCB), early contractor involvement (ECI), negotiated design-design-build contracting, and performance-based contracting. Two ALCCB methodologies are detailed: alternate pavement design proposals and alternative bridge design proposals. ECI is similar in structure to the US progressive Design-Build (DB) contract. Some of the delivery methods used internationally bear sharp similarity to those used in the United States–particularly when progressive DB, integrated project delivery, and public-private partnership. Also discussed are changes involving US philosophy on the importance of past performance, trust, and strong relationships with contracting teams, owing to the growth of DB and construction manager-at-risk, and other delivery systems.

The final aspect of understanding the body of knowledge in project delivery method (PDM) use in the design and construction industry is owner-focused, because it is the owner who selects which PDM is most appropriate for a given project. Selecting a PDM is functionally a decision that must be made within the owner’s business culture and must reflect the level of risk that the owner can tolerate when using a PDM. This chapter outlines the most common perceptional issues associated with Design-Build (DB), Construction Manager-at-Risk, and public-private partnership project delivery methods. A review is provided of the TCRP methodology in a specific PDM selection tool that covers the spectrum of most possible approaches to rational decision-making in selection of PDMs.

The evolution of construction project delivery is reviewed, beginning with the transition from the master builder procurement culture to the low-bid procurement culture in the public sector over 150 years ago, when competitive bidding was introduced. An assessment is included of project delivery literature, which often couples collaboration with integration, indicating that the two concepts are synergistic and intimating that one cannot exist without the other. Also examined are substantial losses experienced during 2019 and 2020 by several major construction contractors on some of their public sector design-build and public-private partnership projects. and the consequent decreasing willingness of these contractors to take risks on lump-sum, competitively procured civil projects.