the newsletter of tbd consultants - 2nd qtr 2013
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Bay Area Market Report
Traditionally, the San Francisco Bay Area has been one of the last areas of the country to pull out of a recession, but this time it seems to be leading the way. In this article we look at the state of the construction market in the Bay Area.
Sometimes it is assumed that Design-Build is a relatively new concept, but it has been said that it can be dated back to the medieval master builders, like Henry de Reyns who built Westminster Abbey in London.
The basic precept behind Design-Build is in having a single point of responsibility for both design and construction. One intention is that supposedly this will eliminate the inherent conflicts between designer and contractor, reducing litigation and claims. Normally the Design-Build (D/B) entity is not one united entity, but rather a joint venture, almost always led by the contractor because they have the bonding capacity. So the possibility of litigation between designer and contractor is not eliminated, but at least the building owner isn’t in between them.
There is also normally an expectation that D/B will result in breaking ground on a construction project faster than the traditional route of design, bid, build. It is also expected that the construction period itself can be tightened to result in completion on or ahead of a typical schedule, since the contractor is often involved from very early in the planning, in answering his or her own design questions, and can ensure that efficiency and constructability are central to the design. This can often be the main driver for employing the D/B procurement strategy, with modern times dictating that ‘time is money’.
Another anticipated benefit is that constructability and value engineering ideas that the contractor can bring to the design will lead to more competitive prices.
It is well known that the three goals of any construction project are schedule, cost and quality, and there is a consensus that you can have any two of those but not all three. Consequently, since we are saying that schedule and cost are anticipated benefits of the D/B process, it should not be surprising to find that there are concerns about quality control and lack of design excellence. There is also concern about the loss of unbiased professional advice. However, you only have to think back to the idea of the medieval master builders as Design-Builders to see that architectural excellence is not always a problem with this procurement method. Having the D/B builder utilize its own expertise and innovative skills can lead to interesting designs. But the concern about design quality is one reason why MEP disciplines and industrial projects are often seen as ideal subjects for this method.
Another potential problem that has been noted in connection with Design-Build is interpretation of the performance specification by the D/B builder to his advantage, rather than to that of the building owner. Design may be non-existent at the time the project goes out to bid, or the design may have been completed up to a certain stage, often about 50% or 60% complete. In the former case, the performance specification is the only document that really defines what the building owner expects, and it needs to be very well worded. In the latter case, you can sometimes lose a substantial amount of the potential benefits from D/B, since large parts of the design are already fixed, and potential innovations affecting that design could be costly in design work and affect the schedule, unless there is enough flexibility carefully crafted into the original design to eliminate this danger.
Another potential issue that arises in connection with bidding a project on performance specification only, is that the cost of bidding such projects can tend to reduce the number of qualified bidders.
Traditionally, the public sector has had more reservations about Design-Build because of the difficulty of demonstrating that they are achieving the ‘best buy’. It might not always be apparent, but public bodies do have a responsibility for how they are spending taxpayers’ money, and the more traditional method of bidding out a fully designed project is often seen to be less subjective than the Design-Build process.
So the Design-Build procurement method has its plusses and minuses, as does every other procurement method, and building owners will need to evaluate the procurement strategy for each project.
Brian Tolland and Jamie Milliner of TBD Consultants contributed to this article.
Hotels have to serve as a home-away-from-home, a temporary office, a meeting place, and a recreation center, among other things. Here we look into some of the issues related to hotel design.
Design consultant: Katie Levine of Vallance, Inc.