According to the Washington, D.C.-based Design-Build Institute of America, over the past 15 years, the use of design-build has greatly increased in the United States, making it one of the most significant trends in design and construction today. Known also as design/construct and singlesource responsibility, design-build streamlines project delivery through a single contract with the project owner and the design and construction services team, allowing the owner to save money and time by creating an alliance that fosters collaboration and teamwork.
Metal Construction News spoke with Susan Hines, managing director, public relations at the Design-Build Institute of America; John P. Cross, PE, vice president of the American Institute of Steel Construction, Chicago; and Bill Wren, designbuild national sales manager at NUCONSTEEL, A Nucor Co., in Denton, Texas, to learn more about the status of the design-build market and what issues design-builders are currently facing.
An Integrated Approach
While the essence of design-build-one contract with a single point of responsibility-hasn’t changed over the past few years, Hines says that the integrated product delivery approach is a big advantage for owners. According to the DBIA, the owner/agency benefits of using designbuild includes faster delivery, cost savings, better quality, singular responsibility, decreased administrative burden, reduced risk and reduced litigation claims. The design-builder also has the benefits of decreased administrative burden and reduced litigation, in addition to a higher profit margin and increased market share.
Cross notes that the structure of the contractual arrangement has broadened over the years. “Clearly we are moving to an era of alternative project delivery of which design-build is just one, but all of which are attempting to accomplish the goal of collaboration between all team members-design and construction, prime and specialty-on the project.”
Wren explains that NUCONSTEEL Design-Build is a manufacturer that provides design-build, cold-formed steel building solutions for mid-rise construction projects. “This is a relatively new concept with unique applications from the conception of the project through the installation and completion of the project. As such, the concept continues to change as the industry embraces another method of the engineering/architectural aspect of the project, along with alternative building material options,” Wren says. “Because of the current market economies, businesses have been required to look at alternative concepts along with tried-and-true applications that bring the very best ideas to the foreground, in order to offer the best,most cost-effective, green and competitive choices for their customer’s construction projects.”
Working through the Recession
Since most companies don’t have a complete set of services under one roof, design-builders have suffered less in the recession than other design and construction firms, Hines says. “We’re seeing more people gravitate toward design-build than ever before,” Hines explains. “The need to have shovelready projects pushed design-build as a delivery method.” With the help of the American Recovery and Reinvestment Act, a lot of projects that had been sitting on the shelf got dusted off and became design-build to move into construction quickly.
On the other hand, Cross says that the AISC is seeing a temporary movement away from designbuild as owners perceive that they can gain more value from the depressed pricing in today’s construction than they can from collaborative design and construction. While the AISC disagrees with this conclusion, Cross notes that design-builders are struggling as much as any contractor or specialty contractor in this depressed construction market, with most having transitioned to bid-based work. Cross says that we are just seeing the start of the recovery in the design-build industry.
Wren agrees that the economy is still struggling and appears to be showing only a little sign of recovery. He notes that the light at the end of the tunnel still appears to be far away, possibly in 2012. “The most frequently heard complaint is the financing arm of the economy is still very tight, difficult to maneuver in, and is not releasing funds for construction; or the terms for the monies are undesirable, requiring high down-payments and interest rates that discourage any ability to move forward with the project,” Wren says. “Many projects begin the bid stage, but stall in the award process awaiting funding of the project. “
Design-builders face many challenges, including integrating the project collaboration down through all levels of the project team and not just stopping at the architect-general contractor level and convincing owners of the total cost benefit of this form of project delivery as opposed to a simple comparison of first costs, Cross says.
In addition to financing, Wren notes that there are also minor challenges that face the project, especially
when working with a new industry concept. “One challenge is to teach or train the key players in the market to look for the alternate options, i.e., green-building, cold-formed steel vs. other building materials, design-build vs. plan&spec methodology, etc. Each building concept requires a separate set of industry standards for the contractor/owner/architect to be made aware of. A design-builder must be aware of the questions before the client asks, so they may proactively present and prepare the path for their customer’s building solutions. A seasoned design-builder has experienced these aspects of the construction process, and creates a driver-program for the client to follow, allowing for a more seamless application of services and products.”
In terms of competition, Hines says that design-builders are worried about losing out on business to other design-builders. “Everybody wants to make themselves the most competitive.” She notes that the demand for the DBIA’s certification program has grown tremendously.
“The market is highly competitive and pricing continues to be the number one factor to receiving a project award,” Wren says.
“There is more design-build work in the transportation/infrastructure segment than in private building construction,” Cross says. “The key is the negotiation of a fixed-price contract.”
Hines adds that a lot of government projects are going design-build because of the speed of construction. She goes on to note that public-private partnerships are seen as a way of bridging the gap on some of these major infrastructure projects, such as toll roads.
Cold-formed steel, design-build is a viable option for any mid-rise project that is three to nine stories in height, on grade or over a podium, Wren notes. The various market segments-hotels/resorts, military housing, senior/assisted living, university housing/dorms, mixed-use/retail/condos and multifamily/apartments-are all active in varying degree, with the most movement currently being in the military and senior/assisted living market segments, both of which have been influenced by the 2010 government stimulus package.
Cross notes that there is room to grow for design-builders. “The fact that the use of productivity enhancing building information modeling requires collaborative project delivery on either a formal or informal basis,” he explains.
“The growth in BIM provides an opportunity for an expanded use of BIM. There is a similar opportunity in the growing area of green construction in that optimizing a building for sustainability requires the close coordination of all design disciplines and trade specialties.”
“The rise of BIM is pushing everybody towards integration, and people are going to have to integrate,” Hines says. “Design-build is the only proven method of delivering design and construction in an integrated fashion.”
“As the economy improves, we will see design-build expanding even further,” Hines continues. “Practitioners who haven’t done design-build before will do it and gain familiarity and experience with it and want to do it again.”
For more information on the American Institute of Steel Construction, visit www.aisc.org; the Design-Build Institute of America, visit www.dbia.org; and NUCONSTEEL Design Build, visit www.nuconsteel.com/designbuild.