discover the approach that works for you.

 

"It is better to be divided by truth than to be united in error."

-Adrian Rogers

 

Value
Approach

40 - 28

Qualifications
Approach

27 - 15

Cost Only
Approach

14 - 0


VALUE APPROACH

What: Builder and architect selected prior to design based on character, competence, expertise, relationship, referral, and ingenuity.

Why: Provides highest potential for maximum value, team collaboration, value-engineering, efficiency, fast-track timeline, transparency, and positive owner experience. Up to 30% reduction (2) in opportunity costs and project timeline due to partially-concurrent building and design schedules.  No assumptions on design and pricing; all details are fully and clearly communicated prior to construction. Limits the unknowns.  Reduces probability of +10% cost variance between up-front bids, in the “low bid process” and the final cost (2).

Case Studies: Jaguar Land Rover, HTSThe AdriennePDX Air

 

QUALIFICATIONS APPROach

What: Builder selected after design is partially completed, based on a composite score between the RFP and bid -- off of the current design definition: between 10% - 50%.

Why: Typically an attempt to get best possible pricing; however, partial design definition causes GC’s to make assumptions on design details, scope, and owner vision. Produces medium risk of project cost overruns (1.6% cost growth) (1) and opportunity costs with time consuming RFQ/RFP processes. Caps potential for collaboration, value-engineering input, and real-time budgeting.

Case Studies: Atlantic AviationColumbia Helicopters Turbine Engine Test Cell

COST ONLY APPROACH

What: Builder selected after design is completed based on one factor, the lowest “responsible” bid.

Why: Perceived as fastest way to achieve lowest-cost product. “Low Bid” price rarely matches eventual project cost.  US-DOT’s study shows the “low-bid” approach has the highest risk of cost overruns (9% total cost growth) (1); and the highest opportunity costs due to a sequential – not concurrent – schedule (14% schedule growth in high complexity projects) (1). Strained or no relationship with construction team. Little to no value-engineering input. No GC budgeting input during design phase.

Case Studies: Aurora Air Traffic Control TowerReynolds High SchoolSunnyside Clinic

 


EARLY QUESTIONS TO CONSIDER

  • Is the builder selected before, during, or after building-design?
  • What is my realistic time-frame; is this a fast-track project?
  • Do I want real-time budgeting during the design phase?
  • Who will lead & manage my project: owner, architect or builder?
  • How do I know everything is included in a proposal or bid?
  • Will aggressive sub-contractor bidding occur?

(1) Wardani, Marwa A. El, John I. Messner, and Michael J. Horman. "Comparing Procurement Methods for Design-Build Projects." Design-Build Effectiveness Study. US DOT Federal Hwy Administration, Jan. 2006. Web. 22 June 2015.

(2) "Design-Build Effectiveness Study. Journal of Construction Engineering and Management J. Constr. Eng. Manage. 132.3 (2006): 230-38. Penn State Engineering. Penn State, 2004. Web. 22 June 2015.