Construction Delivery Systems

Design-Build (DB) The following is an example of a typical project. Evaluate the circumstances described and recommend how to proceed. Questions are offered for group discussion. Be prepared to explain and defend your recommendations. A large nationwide bank is consolidating more than 10 computer operation centers into one large center. Though the company has similar small facilities, the program for the large center is the first of its kind for the bank. It has a very large in-house design and construction group. Most of its experience is with regional offices and small branches, most of which have been built using a Design-Bid-Build approach. The bank's information technology group (which operates the computer in the existing operations center and will operate the new one) estimates that the savings from operations will be tens of millions of dollars each year. Because the operational savings can be realized as soon as the larger center can be built, the need for the building is urgent Premiums to accelerate the project (overtime, expediting delivery of major equipment, etc.) are pennies compared to the operational savings available to the bank. The bank decides to fast-track and start building as soon as enough design is complete to support the process. This will result in a significant overlapping of the design and construction phases. Also, all areas where efficiencies are possible must be considered to support the decision-making process of the owner and the design team. In-house resources were available to manage the project, but because of its limited experience with fast-tracking, the bank chose to use a Design-Build project delivery approach with Qualifications Based Selection procurement Construction Management at-risk was seriously considered, but the bank did not want to be responsible for the designer's performance, given the need for extraordinary speed and efficiency. Using Qualifications Based Selection, the bank chose a constructor-led team with a constructor that had experience with the product type and aggressive schedules. To complete the Design-Build team, they encouraged the constructor to use a designer they had worked with for years. The concern over losing control of the design was offset by the use of the Qualifications Based Selection process and a resulting open-book collaborative relationship. The bank was able to retain control over the design without taking the day-to-day responsibility for the designer's performance. Design and construction were well underway before the Guaranteed Maximum Price was established. The GMP included a contingency for schedule acceleration costs such as overtime. The bank decided to manage the project, including overseeing the construction, with its in-house staff_ Verifying that the desired level of quality was delivered was the bank's responsibility. Onsite contract administration was handled by the bank's own staff. The $75 million project was designed and built in 10 months. The project was completed below the GMP. Premiums to meet the schedule were estimated to be less than 5% of the total cost of the project. This was validated by comparisons to similar projects built in more traditional timeframes. The bank occupied the facility and is very satisfied that it was able to retain control over all the design decisions throughout the project. DISCUSSION ISSUES: 1. Why did the bank decide to use Design-Build? Do you agree with its reasons? 2. Why did the bank use a Qualifications Based Selection? What would have been the pros and cons of using Best Value: Total Cost or Low Bid procurement? 3. Neither bridging documents nor a bridging consultant were used. Should they have been? 4. What was the bank's biggest reason for not using Construction Management at-Risk? 5. If the schedule requirement was such that more time had been available, would that have affected your recommendation of whether to use DesignBuild? 6. The Design-Build entity was a contractor-led team. Could the Design-Build entity have been designer-led or an integrated firm? Would either have brought more benefits to the project? 7. Do you think that the Qualifications Based, GMP approach had any effect on the bank's ability to retain control over the design