Why Design-Build is Growing in Water/Wastewater Project Delivery

Public and private water and wastewater utilities across the country continue to face the challenges related to repairing, replacing and upgrading aged facilities and associated infrastructure. While planning for these improvements, utility managers must make smart decisions regarding appropriate technological solutions and appropriate project delivery methods. Alternative Project Delivery (APD) and Integrated Project Delivery (IPD) methods are becoming more commonly used by utility managers to speed delivery, enhance quality and facilitate a highly collaborative environment amongst utility owners, consulting engineers and contractors.

The APD delivery method includes construction manager at risk delivery where the owner maintains separate contracts with the design engineer and the constructor. These two parties are selected by the owner independent of one another and often within a close timeframe of each another. The difference is that with design-build IPD, only one contract is required with a single entity responsible for delivering the project.

Design-Build Delivery

Design-build delivery and its design-build-operate variant is one of the IPD methods utility managers are turning to. Using this method, the utility owner selects one constructor/engineering team to design and build the required improvements under a single contract. Today all but four states allow the use of design-build for some or all public agencies. Hundreds of water and wastewater projects have benefitted from this delivery method in recent years.

?Design-build project delivery has been successfully implemented across the nation to complete award-winning water/wastewater projects,? says Lisa Washington, executive director and CEO of the Design-Build Institute of America (DBIA). ?Design-build can reduce construction time by more than 30 percent while providing greater opportunities for innovation and significantly higher quality projects. As our nation?s water infrastructure ages, DBIA is working hard to make design-build the preferred delivery method for the repair and new construction of critical water/wastewater plants.?

Recent Design-Build Trends in Water/Wastewater

Use of Progressive Design-Build
A recent trend in the use of design-build in the water and wastewater sectors is developing. In states where it is allowed, utility owners are using qualifications-based selection (QBS) to choose their design-build teams. Also known as progressive design-build, this approach allows greater owner control and collaboration over the design-build process. Owners use a single or two-step process to select the preferred design-build team based on qualifications and other non-price factors. Once selected, the owner and its design-build team proceed to Phase 1, where design is advanced to some prescribed level, typically 60 percent. The guaranteed maximum price (GMP) is set after the design-builder bids out the various packages using ?open book? and then the project proceeds to Phase 2, where design is completed while construction gets underway. The progressive design-build method also provides an ?off ramp.? Should the owner and design-build team not be able to agree on the GMP, the owner can opt to terminate the contract and own the 60 percent design documents. The owner can then opt to complete the design and hard bid the construction.

Peter M. Kinsley, vice president of water for Haskell and vice chair of the DBIA, explains the benefit of progressive design-build this way. ?Progressive design-build is a proven efficient and effective project delivery method capable of reducing cost, shortening schedule and improving quality through owner, designer and builder collaboration. As utility providers seek more innovative solutions to achieve their goals and objectives while facing unique environmental and economic challenges, the use of progressive design-build will continue to grow due to the inherent benefits of this project delivery method over others.?

Flexibility in Bid Pricing
In our very price-driven construction project world, utility managers often feel pressure to select low bid, even in design-build procurements. When using best value design-build procurement where qualifications and price are evaluated, more utility managers are basing pricing evaluations not on total bid price or GMP but rather on costs such as design fee, preconstruction services, general conditions and design-builder overhead and profit. This approach allows the owner to include cost as a competitive evaluation criterion while providing the flexibility to set the GMP later in the design process. This benefits the project by allowing owners to collaborate with their preferred design-build partners in selecting final technical solutions. The GMP is then set after the design-builder bids out the various packages using ?open book? to solicit the bids. This allows the owner and design-builder to competitively select bid packages while more accurately pricing the project resulting in fewer potential surprises down the road.

Use of Best Design-Build Practices

Another developing trend is a more consistent use of best design-build practices. The DBIA has developed a publication titled, Design-Build Done Right; Best Design-Build Practices, which provides a set of best practices that apply universally to vertical and horizontal projects. The use of best practices by utility managers and design-builders maximizes the value and benefits of design-build delivery. The organization recognizes the real differences between water and wastewater, transportation and federal projects market sectors and is now developing and implementing specific tools to apply the universal best practices within the specific market sectors.

The DBIA?s Best Practices document states, ?If these practices are implemented, there is an increased probability that the design-build program/project will be successful. If these practices are not implemented, the performance of the program/project may be compromised, and expectations of one or all of the participants may not be met.?

Michael C. Loulakis, DBIA president and CEO of Capital Project Strategies, LLC is a primary author of these best practices. ?DBIA has always advocated on ?doing design-build right? from a procurement, contracting and project execution perspective,? Loulakis says.??But over time we found that people differed on what were ?right? practices and what were ?wrong practices.?Over the past year, our initiative was intended to completely and concisely identify our views on this subject.

?Our publication identifies a list of 10 practices that, if implemented on any type of design-build project, increase the probability of successful for all of the participants.?Each best practice is supported by a number of implementing techniques, in essence ?mini-best practices,? that elaborate on the practice.?From my personal perspective, the development and refinement of DBIA?s best practice publication is one of the most interesting things I have worked on professionally, and I think the industry will greatly benefit from its application.?

DBIA?s best practices concerning procurement include conducting a thoughtful, proactive and objective assessment of the unique program/project characteristics, implementing a procurement plan that enhances the collaborative and other benefits of design-build and employing a competitive procurement process to ensure a fair, open and transparent process. Contracting best practices should be fair, balanced and clear, should address the distinctive aspects provided by the design-build process and the need to address unique characteristics of the project and design-build process affecting each party?s performance. Best practices for execution of design-build projects require that all design-build team members educate themselves about the design-build process. Project logistics and infrastructure should be established to support design-build delivery and the project team should be attentive to the design management process to assure there always is alignment among the team.

Design-build is not the correct delivery method for every water or wastewater project. But when this delivery method aligns with the utility owner?s project interests, goals and objectives and is done right using best practices, it offers value and benefits that are not available with other methods. Projects where teams do not think and act differently than in conventionally delivered projects are more likely to fall short of owner expectations.

John A. Giachino is director of business development for water for Haskell and chair of the Design-Build Institute of America?s Water/Wastewater Markets Committee.

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