For years, design-build strategies have served as an alternative to traditional water utility project delivery methods, tempting utilities as an end-to-end solution for delivering new, expanded and modified facilities and other key projects.
But this year, design-build has become a nearly mainstream method of choice for project owners. According to Black & Veatch’s 2015 Strategic Directions: U.S. Water Utilities report, more than 55 percent of the utilities responding to the survey said they were either using or considering design-build as the path toward implementing capital programs.
The traditional delivery model known as “design-bid-build” sees design and construction services split into separate jobs requiring separate contracts being held by the utility owner. This produces multiple contractors and sometimes vastly different completion timelines.
“On the other hand, design-build streamlines project delivery by placing all services under one contract governing both design and construction,” said Mike Orth, Executive Managing Director for the Americas in Black & Veatch’s water business. “This gives the owner a single point of contact and greater control over project scheduling and costs.”
Design-Build Advantages Drive Acceptance
Survey responses confirm design-build’s key advantages – speed and certainty of scheduling and cost. Under design-bid-build processes, time and resources devoted to the management of multiple contracts and projects – and their frequently competing timelines – often add months to a project. Design-build shortens the timeframe of the bidding process and confines the design-builder’s obligations inside a single contract, Orth said. This is a speed component that is a key for utilities eager to quickly bring capital projects online to meet demand or even consent decrees, he said.
For instance, the approach was a crucial one for the Midland County Fresh Water Supply District No. 1, which recently partnered with Black & Veatch to design and build a well field project to deliver desperately needed water to drought-stricken west Texas.
A small number of U.S. states, including New York, prohibit government entities from entering into design-build contracts, largely out of concerns that the method removes competitive bidding and thus lower-priced options from the construction process.
“Industry advocates are working to ease those rules,” Orth said.
Project delivery timelines are often negotiated between the design-builder and the project owner, resulting in a shorter delivery schedule because both design and construction can proceed simultaneously rather than sequentially. Schedule and cost savings were key drivers for utilities that explored and employed design-build for their projects, the survey showed.
Versions of Design-Build Delivery Models
According to Blake Childress, Managing Director of the Americas Design-Build group for Black & Veatch’s water business, there are several project delivery approaches within the design-build principle that can meet the varying needs of utilities. They include lump sum design-build, construction management at-risk (CMAR) and progressive design-build, just to name a few.
For example, lump sum design-build sets a project’s cost from the outset, an option for owners who must meet restricted cost budgets and who seek innovative and alternative ideas.
“This approach also requires the owner to spend a significant amount of time, effort and cost to adequately describe the project to the depth required to price the work,” Childress noted.
Advocates of design-build and other approaches fight perceptions that these methods remove control from a project owner. The survey showed that control issues were a significant issue for organizations considering design-build.
“In fact, selecting the appropriate design-build approach can give the owners as much involvement as they desire,” Childress said. “Project owners can maintain control via the design-builder selection process and by acting in a close, collaborative role during project design and construction.”
Owners Look toward Experience
Experience with design-build by a potential contractor is key. More than 80 percent of utilities indicated experience was the primary factor in picking a design-build team. Nearly a third of utilities cited the design-builder’s willingness to accept responsibility and risk as a benefit for design-build delivery.
“In traditional models, the designer is only ‘on the hook’ for the cost of the design while the general contractor can point back to the design team if trouble arises,” Orth said. “In design-build, there is no confusion related to the coordination between the designer and the contractor, as they are the same entity.”
“We believe these strategies will become more prevalent in the water industry,” Childress said, “as utilities exploit the efficiencies and project timeline advantages.”
Published originally on Black & Veatch Solutions.
