Copyright © Design Sense Incorporated 1999-2008

Design-Build Owner Ethics

A topic that has intrigued me for some time, "The Owner's Conduct in Integrated Project Delivery or Design-Build", was the topic of a resent presentation I gave to the Design-Build Institute of America: Mid America Regional Breakfast Meeting, July 9th 2008.  I say 'intrigued' because many owner's have used IPD/Design-Build project delivery as an opportunity to distort the balance of risk beyond what many designers and builders have experienced with delivery models that preceded IPD/DB.

Don't get me wrong; owners are not evil trolls that live in caves and feed on members of our industry during the discourse of their project's delivery. On the contrary, 99% of the owners I've worked with want the balanced, professional, predictable, and fair delivery of their projects. They just, honestly, do not know how to get there. As an industry, designers and builders have spent (invested) time and money over the last decade, or so, to educate themselves in Best Practices related to integrated project delivery. My experience demonstrates that many owners are not investing in a parallel (or any) course of education.

The point of the "breakfast discussion" (By the way, thank you DBIA-MAR) was to push our industry forward in demanding that owners (as a group) should evolve and establish a Code of Conduct for themselves, born out of the Best Practices we already know and from their collective experience with IPD/DB. This Code of Conduct, as with any, should have an ethical foundation that assures that all members (and their needs) of the 'delivery team' are respected, treated professionally, and fairly. This Code should address all facets of the procurement and delivery process; from the evaluation of qualifications through the completion of the project. So, to carry on the discussion of developing an "Owner's Code of Conduct" (not unlike the Codes of Conduct governing designers and builders) I have included the PowerPoint used at the breakfast. Love it, hate it, shred it, or hang it on the wall, but in the end we all need to improve our conduct. And I believe that education and communication are key to getting there.

To close, a colleague and I recently assisted one of our clients in the evaluation of proposals for a rather large project. During this process of evaluation, the Source Selection Team began to struggle with notions and arguments outside the developed and published selection criteria. At this critical point in the process, some SET members wanted to evaluate based on other (one might say archaic) criteria. Something I could support if the owner would stop the process, publish the new criteria, and allow the 3 competitors time to revamp their proposals (adding that the new criteria needed to be vetted to measure its alignment with the project goals and constraints, i.e. pertinent). As the members argued fairness, the "We vs. They" scenario, internal policy, etc., the comment was made; "We've met the enemy, and it's us."

Please enjoy the PowerPoint Presentation: Owner Ethics.pdf

David M Shelton, DBIA AIA

Performance-Based Design-Build

Of the two prominent design-build delivery techniques (prescriptive-based vs. performance-based), prescriptive-based design-build dominates our industry. I make this statement based on my own experience as an Owner’s Representative and design-build consultant, corroborated through countless conversations with other leaders of the design-build community. The purpose of this article is to discuss and illuminate the latter, performance-based design-build. By comparing the two, I would like to make clear many of the challenges and advantages of performance-based design-build procurement.

I believe that just about everybody is familiar with prescriptive-based design-build procurement. This approach includes most or part of the design solution within the procurement or RFP (Request for Proposal) documents. Usually referred to as ‘bridging’, prescriptive-based design-build begins with the basis of the solution being determined by the owner and conveyed to the design-builder through drawings and specifications contained in the RFP. Its foundation, the prescription, is a familiar collection of elevations, floor plans, sections, materials selections, specifications, and product cut-sheets. Prescribing the solution is what owners, architects, and engineers have done for as long as we can remember. The disadvantage of this approach is it splits project accountability into two pieces. It may be less severe than design-bid-build, but nonetheless, the solution and accountability for project out-come is split. Irrespective of how perfect the owner’s prescriptive solution might be, the design-builder cannot be held accountable for its basis. The design-builder cannot be held accountable for the solution’s ‘free market price’ or ‘schedule impact’. The design-builder cannot manipulate the schedule and price to align with the owner’s functional needs because fulfillment of the prescription forbids it.

Why Performance-Based Design-Build Works

A performance-based design-build RFP, in its purest form, focuses only on the problem, not the solution. If by some means the owner can focus on the pure needs of the project, the pure problem statement that must be solved, then adherence to the owner’s price and schedule can be achieved. Because the out-come of a project (both cost and schedule) is a direct function of a project’s design; manipulating design controls cost and schedule. If you want satisfaction of all three needs (design, cost, and schedule), the design-builder must initiate and control all elements of design and construction decision-making. This is a scary, if not impossible, idea for some owners to embrace. “Are you crazy?  I’ll end up with a window air-conditioner in my office”. This is but one response I have heard on how an owner’s project expectations will surely not be met, and many owners believe that allowing the design-builder to control all measure of the solution will only end in disaster.

Let us presume that just about every RFP is made up of the same three primary sets of expectations: procedural expectations, programmatic expectations, and performance expectations. Component 1 is Procedures: the contractual roles, responsibilities, and obligation of the two parties (owner and design-builder). This section is not about ‘bricks and sticks’, it mostly the ‘legal stuff’, budget, completion date, contract definitions, and so on. The second Component is Program: the metrics, capacities, equipment, and other information that tells the design-build how much to design and build. Third is Performance: the level of quality for all systems and assemblies that can be measured in terms of function, life-cycle cost, service lifespan, durability, serviceability, and so on.

The difference between prescriptive-based and performance-based design-build is not whether these three sets of expectations exist, they do. The difference is by whom are they defined and solved. Performance-based begins with the same set of expectations as prescriptive-based, but more fully defined and separately documented without passing into the solution (bridging). Performance focuses on what something must do, not be. By focusing on what something must do (problem) then all the possibilities of what it must be (solution) are available to the design-builder (problem solver), thereby allowing innovation that saves cost and time.

The owner is the only true source of what these three sets of expectations are. While using design-bid-build the owner focused on the same three sets of expectations: procedures, program, and performance. In design-bid-build, owners worked through their expectations by solving them, and presenting the solution in the form of plans and specs. If the owner stops just short of initiating the solution and instead, documents all three sets of expectations, you have a performance-based RFP. Herein lies the challenge for our industry, how do we stop ourselves.

Achieving Performance-Based Design-Build

First, the owner and design-builder must be open to changing the way they control and are accountable for the project’s out-come, and both must believe that these controls and accountabilities will result in their success. They must understand how performance-based RFP’s allocate control and accountability between both parties much differently than prescriptive-based design-build or traditional design-bid-build. For the owner, when the RFP states what something must do and provides a ‘measure’ to establish its satisfaction, all control of what it is resides with the design-builder. For the design-builder, when the RFP states what something must do and is provided a ‘measure’ to establish its satisfaction, be accountable for meeting the measure obligated by the RFP.

Second, know what a true performance-based program and specifications are. If the performance expectation does not have an objective and clear measurement, then it is not truly a performance expectation. This measurement must be definitive and based objectively so that irrespective of who conducts the measurement, the results will be the same. One simple example is lighting whose expectation is stated in foot-candles and whose measurement is recorded with a light meter.

Third, we need a consistent format to convey the three sets of expectations. Just as the format for the ‘solution’ (plans and specs) has been made a convention, so must the documents of the ‘problem’ (RFP) be made a convention. In conveying this problem statement, the owner must discover the tools of the Performance-Based RFP trade. The Project Program that is hidden within the traditional singular solution (plans) must be extracted. The level of Project Performance contained in ‘Bridging’ documents must be converted to measurable performance criteria. The restrictive and misaligned contractual language required by the Project Procedures must be rewritten to allow new control mechanisms for both the owner and design-builder.

Fourth, the owner must select a design-builder; a unique entity that combines skillful design-management and construction-management. The characteristics of this entity can and has filled entire books, so I will presume we all know what a design-builder is, though selecting one is a skill in itself.

Owners Using Performance-Based Design-Build

For Public Sector owners, using the design-build delivery method has become common. From my observations, the speed of delivery from concept to occupancy, and adherence to budget, appear to be the driving factors in choosing design-build. Yet speed of delivery, particularly in the concept or RFP development phase of a project, can be improved. The use of ‘bridging’ documents to narrow the solution may appear to be a time-saver. However, for most ‘bridged’ design-build projects, design seems to happen twice. Preliminary design by the owner contained in the RFP, and rediscovery by the design-builder following selection and award of the contract. I should state that there is nothing evil about ‘bridging’ in and of itself, but the time consumed by the owner in developing the concept of the solution can be eliminated through performance-based design-build.

Many of these topics could fill several books, and I have only touched the surface. For me, my associates, and clients; true performance-based design-build is the key to maximizing value while minimizing risk, maximizing delivery speed while assuring budget adherence, and realizing the most creative solutions the design-build market has to offer. It is different and challenging to both owner and design-builder, but it is the next evolution in design-build delivery.

Abridged- May 2007 – Public Sector Issue Dateline Magazine

Copyright David M Shelton, DesignSense Inc. 2007

FASTER CONSTRUCTION, LOWER COSTS, HIGHER QUALITY AND LESS LITIGATION ARE ALL PROVEN BENEFITS OF DESIGN-BUILD

While design-bid-build dominates golf course construction, builders like Landscapes Unlimited are increasingly turning to design-build to provide course owners and developers with significant benefits.

"It was like going out and buying a car. Landscapes finished the project and handed the owner the keys," says John Colligan, architect for the Mansfield National Golf Club. Completed in 2001 in Mansfield, Texas, the course was the first design-build project done by Landscapes for a third party.

In June 2002, ArborLinks Golf Club in Nebraska City, Neb., was also constructed using design-build. "It is a great concept, and we hope to do a lot more of them," said Palmer Design Vice President Erik Larsen, who worked with Landscapes and the National Arbor Day Foundation on the course.

"Design-build makes every dollar count," adds Jeffrey D. Brauer, who served as architect with Landscapes to build the WestRidge Golf Club in McKinney, Texas, for Terrabrook, a mixed-use community developer. While private developers are most likely to see the value of design-build, Brauer says cities could also benefit from : the process to reduce the typical heavy load of paperwork they face.

Design-build had been the standard in construction for millennia - all the great churches and cathedrals of Europe were constructed using the method - until bidding became the norm about 100 years ago.

At the heart of design-build are two principles: setting a firm price for the project, and hiring a design/construction team to complete the work for that price. Usually a golf course design-build team will consist of a builder, golf course architect and building architect, with one of the entities taking the lead to streamline management and serve as a single contact for the course developer or owner.

Dave Shelton, senior vice president of Design Sense in Olathe, Kan., which consults developers and municipalities on design-build, says the advantages of the method include:

Because traditional design-bid-build is sequential, the design must be completed before going on to the next step. With design fees averaging 5 to 12 percent of the total cost, a $1 million design-bid-build project with an 8 percent design fee would require an $80,000 investment before a contractor could even make a bid. In contrast Shelton says, "Design-build can actually allow the builder to begin construction before the design is complete."

A study done by Pennsylvania State University showed that, on average across the United States, design-build speeds up construction by 30 percent while decreasing project costs by eight percent.

Bill Kubly, CEO of Landscapes Unlimited, says the Penn State study figures are borne out in the golf construction world.

"You have virtually no change orders with design-build because the project scope is set before you start. And if that scope changes, you make adjustments through the remainder of the project to stay on schedule and on budget. You don't wait until the end of the project. And there is rarely litigation for the same reason - the ownership team makes all the decisions."

Kirk Kyster, president and COO of Landscapes, discovered the advantages of design-build several years ago when building courses for its ownership group. The company realized it could pass on those same benefits to clients. "We saw that owners, developers and municipalities were looking for a way to have their entire project executed with the minimum risk," Kyster says. "Because you are sole-sourcing the project, the scope becomes all-encompassing. Elements don't fall through the cracks. Offering design-build also created opportunities to showcase our capabilities to architects and others used to doing design-bid-build."

Palmer Design's Larsen points out that the reducing construction time means generating revenue faster. "It's a big deal when you can be open one half a year earlier by avoiding the entire design-bid-build process," he says. "The time savings alone is a positive and accountable number that adds credence to this method."

"Cities and developers that may be hesitant to push ahead on their projects could proceed with confidence using an experienced design-build firm," says Kurt Huseman, executive vice president for Landscape's project development division. "That has been a missing piece of the puzzle since the late 1990s and part of the reason some in the golf industry are struggling. We have now built more than 20 designbuild courses and know where to spend the money and where not to. Pulling in the design element, along with other consultants and contractors, produces a truly collaborative process."

Design-build is being able to put a number on the table and have the peace of mind that everything's going to get built, agrees Corson. The key on the developer's side is to be very specific in the scope of work and avoid change orders.

According to Colligan, design-build works "particularly on a golf course where you're very cost-conscious." When Mansfield National was built, for example, several high-end clubs with "limitless budgets" were under construction in the Dallas market. "I guarantee ours will be as profitable as theirs and our greens fees are just $39," he says.

The key to design-build is pre-planning, says Corson.

"Before construction, we spent a lot of time with Kurt Huseman, being very specific on the project scope - everything from width of the cart paths to number of irrigation heads to the amount of topsoil base in the fairways. That specification removes a lot of the guesswork and conflict. When you have a piece of paper stating precisely what you're getting, it becomes clear whether it's been done or not. When you have four inches of topsoil and you thought you were getting six, that's when you have problems."

At WestRidge, Brauer says, "We sat down cooperatively with Landscapes and Terrabrook and set out a scope and budget. Terrabrook was comfortable that the prices were in line and they wouldn't gain anything from competitive bidding and would get help and efficiency from Landscapes' project management capabilities. It fit into their comfort zone. They understood how much you could spend on the golf course and clubhouse. Having worked with the team members before, it came together pretty quickly."

Miles Presteman, who was with Terrabrook at the time and is now senior vice president, operations, for the Texas division of Newland Communities, which later bought Terrabrook, agreed. "Linking an experienced golf course builder, like Landscapes Unlimited with an architect like Brauer, helped us build the course on time, even with a tight time schedule."

Colligan calls Landscapes Unlimited's design-build efficiency "value engineering."

"They used their experience and expertise to save money without cutting one corner," he says.

"Comfort level" is another tribute paid to the design-build process.

"I've reached the level of comfort with the process," said Sutton Bay's Amundson. "There are always things afterward that you might consider changing, but I wouldn't change the overall design-build process. My advice is to choose your team well. You have controls, but you are going to be much more comfortable if you know who the team members are and the kind of work they are capable of doing."

Copyright United Publications, Inc. Apr 2004
Provided by ProQuest Information and Learning Company. All rights Reserved

QBS Design-Build Team Selection

The selection of Design Build Team using qualifications continues to gain acceptance as Owners see the advantages.  As with the selection of any team, the Owner must clearly define the need and align their process with the specific need.  Many times this process is documented a source selection plan.  Source selection plans range from single page outlines to extensively detailed guides. 

A selection process based on qualifications follows a basic format rooted in the Brooks Act of 1972.  The Brooks Act was introduced to provide the statutory basis for using Qualification Based Selection (QBS) for procuring Architectural-Engineering services for the Federal Government. The process then and now contains seven basic steps.  The steps are:

1. A solicitation for services

2. Submission of Statements of Qualifications (SOQ) from prospective teams

3. Evaluation of SOQ’s

4. Development of a short-list of teams

5. Interviews the short-listed teams

6. Preparation of a final ranking of the teams

7. Negotiation with the highest ranked team

The process is straight-forward, the challenge lies in alignment of the evaluation criteria with the goals of the project.  When establishing criteria, two critical steps to include are to understand what you are not evaluating and to study past projects for what creates problems.  You are not evaluating cost and you are not evaluating a solution.  While the term Qualification based obviously eliminates solutions, it is important that you evaluate the process of creating solutions.  Like wise, reviewing what causes projects to fail helps you establish criteria that will address these team performance issues.

Evaluation Criteria for QBS Design-Build teams generally has three components.  The first component is minimum or basic requirements that without these elements, the design-build team will not be able to complete the work.  Licensing and registration, insurance, and bonding capacity are common requirements in this category.  As these are minimum requirements, a team that fails to demonstrate the requirement is determined to be not qualified for this project.  Keep this part of the evaluation simple and make it pass/fail.  If you need the team to bond you $20 million project, their ability to bond a $200 million project provides you no benefit.

The second component of evaluation criteria is team skills.  Design-Build Team skills can be place in four general categories; personnel, communication and teaming, project approach, and management and control.  Team personnel are common criteria that have been used for decades and seem to be tangible criteria that we can identify with and feel comfortable in rating.  Personal qualifications are presented in a resume-like format and include education, registration and specific project experience of the team’s personnel. Care should be taken when assigning the relative value of these criteria and the project goals need to be carefully reviewed.  If someone with basic training and experience can achieve the end result, can someone who possesses a PHD and 30 years experience achieve a substantially higher result?  If an Owner can clearly identify the qualification and experience of the personnel to complete the work, perhaps this criterion becomes a minimum qualification.  It is also important to remember that a small percentage of projects fail because of poor technical skills.  Remember, because someone has demonstrated that they have done it more times, demonstrates that they have done it more times, not that the have done it better.

Communication and Teaming becomes a key component of the personnel and experience evaluated in the previous criteria.  Communication and teaming evaluate how individuals use their skills and experience to achieve the end result.  This criteria looks at the relationships between the personnel and the structure of how they work together.  What members of the team are involved at what stages of the project?  Who leads what part of the teams effort and what leadership changes take place throughout the project.  What are the individual’s responsibilities and accountabilities as a part of the team?  How are innovation and ideas shared?

The third set of skills is the approach to problem solving.  Once you have looked at the people on the team and how they work together, you now look at what they do.  Do they have standard process that the follow, did they create a unique process for your project, do they modify their standard process for you specific project goals or do they not have a process that they follow.  Evaluation of the approach allows you to understand how the team acquires information and what the do with information.  Project approach looks at how well a team understands your needs, how their design and construction personnel are integrated and the Owner’s team and personnel will be integrated into the process.

The final set of skills to evaluate is the management and control processes that the team will follow.  How will the team manage project costs and schedule?   What are the measures to manage the design and construction?  How does the team identify and manage project risks?  What plans are in place to ensure quality?  None of these factors occur by happenstance.  Integrated teams have created and continually revise their management processes. 

The last component is past performance.  Past performance is a look back in time while the four skills identified above project forward in time.  If teams were able to list past projects where every team member was identical to the team members identified for the proposed project, those projects would have a direct correlation to the team success on the proposed project.  Based on that direct correlation, past performance would have relatively high weight compared to the other criteria.  However, teams are continually changing for a range of reasons.  Accordingly, past performance becomes the measure of confidence that the rating for the skills is correct.  Remembering the old adage, companies don’t complete projects, people do.

Documentation of the Source Selection can become as important as the process itself.  Documentation is valuable tool that assist in aligning the process with the goals and objectives of the project itself.  The process is subjective as we have people assigning a value based on their interpretation of the information provided.  However the process remains qualitative by way of establishing and documenting clear criteria.

Copyright Mark Mitts, DesignSense Inc. 2007-8

Owner’s Control: A Roadblock to Successful Design-Build

As design-build has grown and evolved over the last decade, so has the role of the owner. Design-build has given the owner a single source of accountability and responsibility. It has given owners an opportunity to avoid becoming a referee, a traditional role of the dual contract format. It has given owners opportunities for faster schedules with higher quality results. It has given owners a procurement option that improves total project value: the relationship between cost and benefit. While the upside opportunities for owners are vast, there currently exists one overriding downside problem with design-build: control.

To be specific: owner control. Of the work our firm does, we spend more time and more energy explaining and training owners on their role in design-build procurement than any other topic.  From their view; how, when, and to what degree the owner maintains control of their project is a major impediment to the continued growth and success of design-build. Design-build is a new frontier compared to the design-bid-build and CM procurement models which are decades old. For many owners DBB and CM are as comfortable as an old shoe. Design-builders have known for some time that successful design-build implementation requires a shift in communications, planning, scheduling, subcontracting and consulting, and so on. Design-build implementation fundamentally requires a paradigm shift from that of DBB or CM procurement.

Being the owner of a design-build project, likewise, requires a paradigm shift. And as I said, control is the ‘downside’ problem that owners are struggling with.  Many times questions from owners are predictable: “How can I be sure the project will stay in budget, How do I know that I will get good quality work, How do I know the design will be functional unless I provide the design, What if I don’t like the colors, the space plan, the selection of materials, the subs, or vendors, etc.,” In short, many owners truly believe that if they don’t control the design development, the selection of materials, and the prescriptive ‘controls’ of installation and construction, they have no control over their own projects.

After 25 years in the world of design and construction I know one thing for sure: designers and builders love to give their clients what they want. And over the past four years of being an owner’s representative for integrated services I know two things for sure: design-builders often don’t really understand what the owner wants and owners struggle with how to describe it in design-build terms.

The future growth and development of our design-build industry is directly related to the growth and development of the ‘controls’ that our industry provides the owner. We must provide ‘controls’ that do not skew the design-build risk and responsibility balance, but rather, ‘controls’ that engage the owner and account for their share and direction of project risk. For design-build to be the mainstream procurement model I believe it should be, owners must have design-build skills, practices, and resources to manage risk available to them. Skills, practices, and resources that are as comfortable as the traditional ‘old shoe’.

Specifically, the capability to define their needs in terms of performance rather than solutions, to measure and evaluate best practices offered by design-builders, to create and identify with design-build risk allocation models, to develop and understand design-build project cost accounting practices, and to define and evaluate design-build proposals. Absent the traditional prescriptive guides of “plan in hand”, many owners struggle with measuring value and compliance with respect to many of their facility needs.

So what is the solution? The most obvious solution is using the same approach as we have done on the design-build implementation side: education, training, and establishing best practices, this time geared for owners and their administrative project requirements. My experience shows that much of the education owner’s are currently receiving are via design-build programs and training sessions. Many of these are sponsored by DBIA nationally or through our regional Chapters. While this has been a critical source of information it has, by design and necessity, been focused on the design-builder. DBIA has led the way in educating, training, and establishing Best Practices for the design-build industry. Now our work must spread even further to benefit owners.

Owners currently have a couple of options. Educate internal resources that define, guide, and administer the design-build procurement process. The second option is to out-source these responsibilities to a consultant. Either option, internal or external, will require the availability of professionals educated and trained to represent the unique needs of the owner. Not from the implementation side (although detailed understanding of delivery is crucial) but from the owner’s perspective and with the owner’s acceptance.

Since an educated and skilled owner along with an educated and skilled design-builder will allow design-build procurement to achieve its maximum potential, I believe there is an overwhelming demand for owner representatives. Currently underway within the DBIA is the work of a task force that will ultimately identify required skill sets, educational goals, and Best Practices for Owner Representatives.

CFOs, Facility Managers and operators, and integrated services consultants (owner reps) are but a few that are currently in need of this kind of resource or training. DBIA could join with the International Facility Management Association (IFMA), Building Owners and Managers Association (BOMA), and others to create a pool of human resources through education, training, and certification. Combined with the available pool of experienced and certified design-builders Integrated Services procurement would become the dominant procurement method I believe it will be. The vision of DBIA equipping owners with the education, skills, and experience equivalent to that of the design-builder could be our cornerstone achievement of the next decade

David M Shelton is Principal of DesignSense ISC, an Integrated Services Consulting Firm located in Olathe, Kansas. David, is a member of CSI and DBIA, and serves on the DBIA-Mid America Chapter’s Education and Research Committee.

Copyright David M Shelton, DesignSense Inc. 2003

This Article is a reprint from the December 2003 issue of Date Line Magazine, published by the Design-Build Institute of America: www.dbia.org

City Takes New Approach In Project Designs

Shawnee officials hope process will save time, money

By EDIE HALL

The Kansas City Star

A new justice center, a new skateboard park and a new approach to construction of such projects are in the development stages of Shawnee. The new building approach, called design-build, could save the city time and money on large construction projects in the future.

Dave Shelton, senior vice president of DesignSense Inc. in Olathe, said design-build can be explained by contrasting it with what has been the traditional method cities use to construct projects.  That traditional method is called design-bid-build.

With the design-bid-build method, an owner holds two separate contracts when building a facility-one for the design, and one for the construction. “With design-bid-build, the facility is first designed, and those documents are put out to contractors to bid upon, and then based on those bids, a contractor is selected to build the project,” said Shelton, who was a general contractor for 12 years and an architect for another eight years before becoming the senior vice president of DesignSense.

With the design-build method, the owner usually holds a single contract with one of three entities: an architect who subcontracts a general contractor, a general contractor who subcontracts an architect or engineer, or an integrated company that has both design managers and construction managers as employees.

With design-build, the group or person who designs a project is also the group or person who builds it. “Because of this single contract, the owner does not carry the risk for coordination problems between the design and construction of a project,” Shelton said.

Putting it to use

With the Shawnee City Council already considering the new justice center to be a design-build project, City Manager Gary Montague and Parks and Recreation Director Neil Holman are considering the possibility of the new skateboard park in Swarner Park also being a design-build project. 

The skateboard park would be on four acres at the park at 63^rd Street and Lackman Road.

Holman said the project would be funded by the remaining 2004-2005 “parks and pipes” tax money that is derived from an eighth cent sales tax set to expire in December 2005.  Voters recently extended the tax for another 10 years, but the money for the skateboard park will be taken only for the 2004-2005 tax.

“Skateboarding is more than a passing trend,” Holman said.  “If it was, it would be gone by now, but the kids are staying with it.”

With a lot of work to be done before the city can even start the bidding process for design-build projects, it is unknown when the skateboard park would be completed.

 What is Design-Build?

■ What’s happened:

At its Nov. 8 meeting, the Shawnee City Council unanimously approved a charter ordinance that allows Shawnee to use the design-build method for constructing new buildings rather than the traditional, design-bid-build method.  Approving the ordinance exempts the city from state requirements for bidding and contracting public improvement projects.

One of the city’s first projects to use the design-build method will be the new justice center project.

■ What’s new:

City Manager Gary Montague and Parks and Recreation Director Neil Holman both have said a new skateboard park to be built in Swarner Park at the corner of 63^rd and Lackman streets could possibly be a design-build project. 

■ What’s next:

Montague said city officials currently are working on a proposal outlining how the city will approach the bidding procedures with the new method.  He said this process wouldn’t be completed until after the first of the year. 

 Comparing the Two Methods

According to Carter and Burgess Inc., a multidiscipline consulting firm, the tow building methods have advantages and disadvantages. According to the Carter and Burgess Web site, www.c-b.com, an advantage of the design-bid-build method is that it provides more design and construction company competition for the bid. The Web site also noted that small contractors might be concerned about design-build projects being fashioned on a larger scale, thus precluding their participation.  But Shelton doesn’t rely only on his experience and opinion to make the case for the design-build method. Instead, he cited a national study by the Construction Industry Institute and Penn State University that showed the design-build method to be 30 percent faster and 6 percent lower cost than the design-bid-build method.  The study also found design-build projects to be of a higher quality than design-bid-build projects.

History of the Design-Build Method

A decade ago, about 5 percent of all commercial work in the United States was done through the design-build method, with about 90 percent through the design-bid-build method, according to the Design Build Institute of America.  The reaming 5 percent of work was done through other methods. Currently, about 40 percent of that work is done through the design-build method and another 40 percent through the design-bid-build method.  The remaining 20 percent of work was done through other methods. Design-build also the dominant method in Europe and Japan. Shelton said the design-build method isn’t a new one. In fact, he said Egyptian pyramids, the Parthenon and European cathedrals are all examples of design-build projects.

“Architect is Latin for “Master builder” not ‘Master designer,’ Shelton said.  “Classically, throughout history up to a little over 100 years ago, all buildings everywhere was done with the design-build method.”  Shelton said the industrial revolution is a prominent reason the United States changed methods. “It allowed for materials that are used in construction to be created in factories and assembled on the job site,” Shelton said.

He said when the materials that used to be made only by craftsmen from raw materials became accessible to owners, developers and designers, those groups began assuming that quality and how quickly a project  could be completed would be equal amongst all bidders, and looked at cost only.  “If all things were equal, design-bid-build would be the best method, but things are never equal,” Shelton said.  “No two architects, builders or material items are the same,  Quality can vary widely.”

Are You Really ‘Controlling’ Your Risk?

Fundamentally, there are only 3 categories of risk on any project: what does it cost, what does it look like, and when do I get it. “What does it cost” is usually arrived at by establishing (usually by the project owner) a budget number. “What does it look like” means, among other things, its function, size, and quality. “When do I get it” would be the schedule of delivery. These are simple concepts that apply to just about anything an individual might purchase; be it an office building or an apple.

With these 3 risk categories in mind we, as owners and providers, can consider how we control the delivery process in a coordinated manner. This is the essence of the design-build process. Design-build, at its core, is not about designing or building. By that I mean not about the technical craft of problem-solving, the use of materials, the establishment of means and methods, and derivation of sequences and schedules remains about the same for all three dominant delivery systems (design-bid-build, CM at Risk, and design-build). Design-build, at its core, is all about controlling risk. It’s about identifying it, allocating it, and managing it to a successful outcome. This is not ‘ground-breaking’ insight; anyone associated with Project Management for more than 30 minutes knows this.

So why do some design-build projects succeed while others fail. Let’s assume all involved in project delivery are competent in the technical skills required. Let’s further assume that the elements of the 3 risk categories are all fully allocated and understood by every participant including owners, users, designers, and builders. This means we have a team that understand the risks, understand the challenges, can create the solutions, and can coordinate all activities. Therefore, with all of this in place projects should not fail, yet some still do. And I believe the component that causes many to fail, or not fully satisfy the owner, is one of three control breakdowns. Either not allocating “control”, not assuming the “control” that is allocated, or not honoring the “control” that has been assigned.

I wrote on this same topic in the December 2003 issue of Dateline. In that article I laid out my experience on this rarely discussed topic, “Control”. Today, I still believe it is the least obvious and most critical component of the process, particularly in design-build. Control and the allocation of control is the foundation of project success. As we assumed earlier, all involved in project delivery are masterful technicians, fully informed of the risks, and competent in performing all necessary tasks. But assigning control of the same, and allowing those assigned with said control is where the ‘rub’ comes in.

As a design-builder, have you ever responded to an RFP that states you will be at risk for the design while it also includes the design? As an owner, have you ever allocated the control of design to the design-builder while prescribing what materials shall be used? As a designer, have you ever been charged with meetings the needs of the user without having access to the user, or at least their needs? As a builder, have you ever been required to meet a construction schedule that included unavailable materials that were controlled by others? These are just a few examples of the conflicts that exist in many design-build projects largely due to lack of “control” clarity in the contract.

Beyond contractual conflicts there exist ‘created’ conflicts by not assuming the control that is assigned by the contract or abdicating said control. As a design-builder charged with design responsibility, have you ever been controlled by the owner in making design decisions (Owner instructs the design) while, at the same time, not holding the owner responsible for the impact on cost and schedule? As an owner, has a design-builder ever told you that the design they controlled requires more money or time? I believe the source of these conflicts is rooted in “control.” Who has the responsibility and authority to control decisions? How do we allow others to control elements that have an impact on us? Most important, who is not seizing control when they are assigned the responsibility and authority?

This diagram is simple but effective in tracking the control methodology of design-build. It begins with a known quantity of Cost, Quality, and Schedule. The Owner then establishes a measurable outcome for all 3 components. This “established outcome” (or expectation) is then reviewed by the design-build market. The market either accepts it or passes. Once accepted, complete control of the decision making belongs to the design-builder. The Owner now measures compliance of the ‘promised’ expectations. Different from design-bid-build, the Owner no longer leads a “design and construction decision making process”. The owner now is involved in the “compliance auditing procurement of a product”.

Control Model

Conversely, being a design-builder means that upon receiving clear achievable cost, quality, and schedule expectations,  to exercise the control granted to assure compliance of the project expectations; in other words ‘don’t claim to be a design-builder: be a design-builder’. Exercise what you spent enormous time and resources convincing the owner you could do; meet their expectations through skillful balance of designing, costing, and scheduling. After all, “all involved in project delivery are masterful technicians, fully informed of the risks, and competent in performing necessary tasks.”

If you’re design-builder, ask yourself: “Am I a Design-Builder?”

I’ve seen, right before my eyes, in countless design-build progress meetings design-builders saying to the owners, “So what should we do?” Then wait for the owner to make a decision (a design-builder decision), hear the instruction of the owner (something owners have always done prior to design-build), say OK, and then stand up and walk out the door. Don’t ask ‘what to do’; decide and do it. Remember, the owner hired you to provide solutions not demonstrate the challenges. Owners know there are challenges, all projects have challenges. What owners want is solutions.

By the same token I’m amazed that the owner, having heard the question, begins to design the solution (design-builder abdicates: owner accepts risk). Feeling that they are somehow responsible to decide, they do so.  I know for many owners this ‘feels’ right. After all, owners have always been pressed for decisions. Owners understand that the challenge before them is indeed a challenge, and something inside them makes them want to solve the problem (usually years of design-bid-build work). But remember that the design-builder has control of design and construction decisions. You have fully informed the design-builder of your needs via criteria, and selected the design-builder based on their proven history and current abilities to solve problems.

By the way, this breakdown of ‘control’ responsibilities will ultimately lead to the following statements being made by the design-builder and owner at a future point in the project. Design-builder, “You told me to ‘x’, that’s how we got here.” Owner, “Well you didn’t tell me that ‘x’ was going to cause this.” 

Owners should not control the design and construction unless they want to accept the risk involved (counter to design-build). Owners should control the results of design and construction through clear design-build criteria (the RFP). Design-builders should never give up their decision making ‘control’. If the design-build criteria are impossible to meet don’t take up the contract. If the design-build criteria change after the contract is executed, exercise the modification clause of the contract. The key is for both parties to stick to design-build, use design-build Best Practices. Don’t step back to the old design-bid-build process. It may be familiar, comfortable, and easier in the moment, but it will ultimately result in some measure of project failure.

As a DBIA active member, I believe our challenge as an industry is to continue to establish Best Practices that yield a consistent and predictable delivery methodology. Our challenge is to continue to build a strong consensus related to that methodology. I also believe this evolving methodology must have a basis for allocating ‘control’, growing new ‘control’ techniques, evaluating successful ‘control’ techniques, and developing comprehensive education that informs everyone that design-build is truly a shift from the traditional paradigm.

Copyright David M Shelton, DesignSense Inc. 2005