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Design / Bid / Build

The traditional method of project protocol that Counsilman-Hunsaker is involved with, particularly on publicly funded projects would be to follow a design/bid/build scenario. In a design/bid/build situation, the owner of the project hires an architectural or engineering firm to handle design functions and develop the construction documents and specifications. The design team will work with the owner to identify the owner’s needs, develop a written program documenting those needs and then produce a conceptual or schematic design.

This early design is then developed, and the entire design team, which is traditionally comprised of the Architect, Mechanical, Electrical, and Plumbing Engineers (MEP engineers), a Structural Engineer, Site/Civil Engineer, landscape architect and the Aquatics Consultant to complete documents (drawings and specifications). These documents are then coordinated by the architect and put out for bidding to various general contractors.

The documents and specifications are put out to bid, and general contractors provide their best price to execute construction activities.  Once bids are received, the Architect typically reviews the bids, seeks any clarifications required of the bidders, ensures all documentation is in order (including bonding if required), and advises the owner as to the ranking of the bids. If the bids fall in a range acceptable to the owner, the owner and architect discuss the suitability of various bidders and their proposals. The owner is not obligated to accept the lowest bid, and it is customary for other factors including past performance and quality of other work to influence the selection process. However, the project is usually awarded to the lowest bid by a qualified general contractor.

In the event that all of the bids are in excess of the goals of the owner, the owner may elect to reject all bids. The following options become available:

  • Abandon the project.
  • The architect may revise the design, making the project smaller or more efficient, or reduce features or elements of the project to bring the cost down. The revised documents can then be re-tendered.
  • The owner may elect to select the lowest qualified bid's general contractor to join the architectural team to assist with cost reduction. This process is often referred to as value engineering.

In the design/bid/build scenario the design team would traditionally include multiple vendors and manufacturers of the various pieces of equipment. The thought is that this will provide for the most competitive bidding environment.  Considering that contractor selection is traditionally done on a low bid basis, it is critical to pre-qualify contractors to ensure that the low bidder is in fact qualified to build the project.

In a design/bid/build situation, the client is responsible for overseeing the activities of the general contractor selected to build the project. Any changes or revisions to the construction documents are done via addenda and are issued for construction. Traditionally there are numerous approvals, such as local and state building and board of health permits that must be achieved from all jurisdictional authorities prior to the start of construction.

In most instances, almost every component of a project is supplied and installed by sub-contractors. The general contractor often provides work with its own forces, but it is not uncommon for a general contractor to limit its role to management the construction process and daily activity on a construction site.  The Architect will act as the Owner's agent to review the progress of the work and to issue site instructions, change orders or other documentation necessary to the construction process.

Potential Challenges with a Design/Bid/Build Project #

  • Failure of the Design Team to be current with construction costs, and any potential cost increases during the design phase could cause project delays if the construction documents must be redone in order to reduce costs.
  • Redesign expense can be disputed should the Architect’s contract not specifically address the issue of revisions required to reduce costs.
  • Development of a "cheaper is better" mentality amongst the General Contractors bidding the project so there is the tendency to seek out the lowest cost sub-contractors in a given market. In strong markets, General Contractors will be able to be selective about which projects to bid, but in lean times, the desire for work usually forces the low bidder of each trade to be selected.  This usually results in increased risk (for the general contractor) but can also compromise the quality of construction. In the extreme, it can lead to serious disputes involving quality of the final product, or bankruptcy of a sub-contractor who was on the brink of insolvency desperate for work.
  • As the General Contractor is brought to the team post design, there is little opportunity for input on effective alternates being presented.
  • Pressures may be exerted on the design and construction teams, which may lead to disputes between the Architect and the General Contractor.

 

Potential Benefits of a Design/Bid/Build Project #

  • The design team is impartial and looks out for the interests of the Owner.
  • The design team prepares documents on which all General Contractors place bids. With this in mind, the "cheaper is better" argument is rendered invalid since the bids are based on complete documents. Incomplete, incorrect, or missed items are usually discovered and addressed during the bid process.
  • Ensures fairness to potential bidders and improves decision making by the Owner by providing a range of potential options. It also identifies new potential contractors.
  • Assists the Owner in establishing reasonable prices for the project.
  • Uses competition to improve the efficiency and quality for owners.

 

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