Collaboration between architect and contractor from the very
beginning of a project — where is the harm in that? That's the goal of the
design-build project delivery method, which proponents say allows for
collaboration by all stakeholders from the outset of a project, improving
communication to the point that the need for change orders during the course of
a job is greatly reduced.
In fact, design-build projects have proven themselves
schedule-and budget-friendly. According to a 1999 Penn State study, design-build's
production schedule was 33% faster than the traditional design-bid-build. When
researchers compared costs, they discovered that design-build came in 6%
cheaper than design-bid-build as well.
With benefits like these, it might be assumed that states
have long been on board with the design-build concept. However, that isn't the
case, as officials have pushed back due to what they consider a lack of
historical data around the method and a lack of transparency.
State-by-state obstacles
Currently, about half of all U.S. states allow design-build
with no limitations, according to Richard Thomas, director of state and local
legislative affairs for Design-Build institute of America. Three states have no
provisions for the delivery method, and others are a mixed bag in which some
agencies allow it but not others.
Citing the old adage of "all politics are local,"
Thomas said there are a few common threads as to why some agencies still don't
permit design-build. Midwest states tend to have the most limitations, he said,
with many contractors laboring under the assumption that more design-build
projects will somehow result in an influx of construction teams from outside
the area racing in to monopolize available work — an assumption that Thomas
said was false.
However, he noted that the biggest issue is typically labor.
"Unions are very powerful special interests, particularly public employee
unions," he said. On the other hand, Thomas added that some trade unions
are supportive, although it varies depending on the region of the country. In
fact, that also seems to be the rule of thumb when it comes to dealing with
design-build laws around the country.
The complex regulations of New York
In New York for example, not only are there laws preventing
state and local agencies from engaging in design-build, but it is the only
state in the union that also has regulations in effect that prevent
design-build in the private sector. It's a New York State Education Department
law, according to John Patrick Curran, partner at Sive, Paget & Riesel in
New York, that makes New York the outlier in the private design-build world.
"There is a tension between the education law, which
says only licensed design professionals can perform and be compensated for
design services, and the ruling by the court of appeals in the Charlebois case
that said (design-build is permitted) as long as a contractor has a contract
with a design professional, and the contractor has a contract saying
that," Curran said. Nevertheless, he said the Education Department
maintains that design-build is not lawful.
Adding to the confusion, the state passed a 2014 law, with
the support of the governor, allowing certain state agencies to enter into
design-build contracts, according to Curran. That new regulation did nothing to
change the Education Department's law, and, further, some interpreted the new
state measure "as a tacit acknowledgment by the legislature that it was
still unlawful" in the majority of circumstances.
The design-build environment in California and Texas
Things are simpler in California, where the design-build
laws are broadening, according to Lisa Dal Gallo, partner at Hanson Bridgett.
"It's becoming very available," she said. The design-build process in
California must be contractor-led because contractors are inherently better
equipped to manage costs and schedules, she noted.
The architect is still the architect of record, but the
actual contract with a public agency must be with the contractor. State
agencies are increasingly adopting design-build because "design-bid-build
doesn't work" and is fraught with "delays, overruns and change
orders," she said.
"You're paying a designer to design something you may
or not be able to bid," Dal Gallo said. There's no way to come up with
firm costs until the project is put it out to bid, and when those numbers come
back, the owner is either stuck with the lowest responsible bidder or has to
pay the architect to go back to the drawing board. "It's a vicious
cycle," she said.
In Texas, Thomas said it seems that public agencies only
want to use design-build for megaprojects, whereas in Florida, one is likely to
see a multitude of design-build projects done every day for projects of all
sizes.
He added that some architects are skittish about
design-build for fear that the design-build team will usurp the relationships
they have built with owners. For example, in Missouri — a state that took years
to hammer out full authority for design-build — architecture industry
representatives were fine with design-build being authorized for use on
transportation projects over $1 million, but were more comfortable with a
minimum contract amount of $7 million for buildings.
This, Thomas said, kept the possibility of design-build out
of the typical architect's territory of customers. "It's important for us
to try to get the whole industry in each state to collaborate and come up with
a solution that works for everyone," he said.
Why the design-build method is on the rise
However, Thomas added that there is a new trend among
architecture and design firms "to become integrated" and take on
construction work as well as the design responsibilities. This is evident,
particularly on the engineering side, he said, where designer-led water
projects have grown dramatically in the last 10 years.
A boon for the design-build cause was the federal stimulus
package introduced in 2009, resulting in tremendous upticks in design-build
transportation laws. "If you look at January 2009 and December of 2009,
(it's like) night and day," Thomas said. After the stimulus initiatives,
federal agencies began to prioritize schedule speed and turned to the benefits
of design-build, he noted.
The federal "nudge" toward design-build continues
to this day. Design-build is put into the same category as HOV lanes and safety
improvements, helping a state project to qualify for maximum funding, according
to Thomas.
However, even in the private sector, the design-build
process has its hurdles, according to Shawn Goetzinger, partner and director of
development at Phoenix design-build company Form Third. Owners sometimes
believe that design-build will actually prevent some of the things that
design-build delivers best — transparency and competition.
In design-build, the owner is part of the entire design and
construction process, unlike other delivery methods, and is able to see various
bids from each subcontractor, which typically eases the fear of being taken
advantage of by overcharging, according to Goetzinger. In addition, he said the
design-build process "breaks down the legal walls" between architect
and contractor that can often leave the owner managing the conflict by
"pulling on opposite ends of the rope."
What's next for design-build
As for the future of design-build? Goetzinger said he
believes that as agencies and private owners begin to "recognize the
benefits and reduced hassle" of design-build, its popularity will continue
to grow.
Dal Gallo said that technology like building information
modeling (BIM) will further propel state agencies to take advantage of
design-build so that they can reap the full benefits of a collaborative BIM
model. In addition, she said modern construction practices like Lean are most
effective in a design-build environment.
As for Thomas, he'll keep going state to state, advocating
for what he believes is the most efficient and productive delivery method
available, even though it won't always be a smooth road. "Change is hard
and not everybody is going to embrace it quickly," he said.
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