Experiences of Federal Agencies with the Design-Build Approach to Construction (1993)

As used in this report, the term the “design-build approach” means any construction acquisition arrangement in which both the design and construction of a facility are covered by a single contract. ¹ Such arrangements can take many forms and include many different provisions, but the basic objective is almost always the same: to unify responsibility for both design and construction in a single entity, which can be either a single organization or a consortium.

It should be noted, however, that when the design-build approach is used, all of the design work associated with a project is not necessarily performed under the design-build contract per se. Often, an owner will have a preliminary design developed before hiring a design-build contractor. In such circumstances, the design-build contractor is responsible only for the final stages of the design process.

Similarly, just because responsibility for both design and construction are unified under the design-build approach, owners are not necessarily obliged to accept whatever design the design-build firm comes up with. Many owners reserve the right in their design-build contracts to approve the contractor's

design before construction can begin and to cancel the contract if the design is not satisfactory--with, of course, compensation for the work performed.

The design-build approach has been used for many years in the private sector--especially for industrial facilities--and by the military agencies for procuring family housing. In the mid 1980s many owners, including several federal agencies, began experimenting with the use of the approach to procure other types of facilities. The increased interest in the approach probably was stimulated by a number of factors, but especially the following:

• Intensified pressure on facility departments from corporate managers and agency administrators to save time and money.

• Concern about increasing construction-related litigation combined with growing uneasiness over the inherent lack of accountability under the traditional approach² because of divided responsibility for design and construction.

• A spreading perception that many designers (both architects and engineers) do not have a good understanding of how buildings are constructed or what different building features actually cost.

Because of the growing interest in the design-build approach, a number of organizations have held conferences and conducted studies on the subject in the last few years--including the Federal Construction Council, which held a 1-day symposium on the design-build approach in 1987.

Since then, more federal agencies have used the approach on a limited basis. However, usage among the agencies has remained low, mainly because most agencies still have little or no experience with the approach and thus many unanswered questions about when and how it should be used. In essence, proponents of the design-build approach have encountered the age-old stumbling block for any new idea: Resistance to the idea in the absence of evidence of its value, but no way to get such evidence because the idea will not be used.

Eventually, of course, ideas that seem to have merit are tried and are either accepted or rejected based on the results of the trials. And this process is already well under way in federal agencies regarding the design-build approach. However, the process can be agonizingly slow. The Federal Construction Council (FCC) Consulting Committee on Cost Engineering decided to try to speed up the evaluation process by collecting and publishing

information on the experiences of the agencies who have tried the design-build concept to date.

Initially the committee planned to seek information on just the cost of design-build projects on the grounds that cost was the factor of primary interest to federal agencies, and it was the factor with which the committee was most familiar. However, on reflection, the committee concluded that it would be a mistake to try to consider cost in isolation inasmuch as most agencies recently have adopted the “total quality management” concept, which emphasizes the importance of quality and user satisfaction over cost. The committee also recognized that cost and other factors like quality are so closely linked that it is impossible to consider any one factor by itself. Consequently, the committee decided to broaden the scope of its investigation of the design-build approach to include the whole spectrum of factors by which construction projects are judged.

To collect the desired information, the committee developed a two-part questionnaire, which the members of the committee were expected to distribute to appropriate offices in their agencies. The questionnaire provided space for reporting on up to four projects. Respondents were instructed not to limit themselves to projects involving buildings; they were also asked to report on “representative” projects, not just good or bad projects.

The first part of the questionnaire asked for factual information on each project being reported on--such as: the nature, size, and complexity of the project, its location and cost, the type of contract awarded, the number of bidders, the type of firm that got the contract and how it was selected, and the extent to which the design of the facility was developed before the contract was awarded.

The second part of the questionnaire asked the respondents to assess each project in comparison to a similar project carried out under the traditional design-bid-build process, in terms of the following factors:

Functionality

User satisfaction

Quality of design

Quality of materials

Quality of workmanship

Overall quality

Cost of planning and programming

Cost of agency contract administration

Cost of design

Cost of construction

Overall costs

Number of change orders

Extent of other contract problems

Time required for planning and programming

Time required for design

Time required for construction

Time required overall

Specifically, respondents were asked to indicate for each factor whether the design-build project was “much worse,” “somewhat worse,” “about the same,” somewhat better,” or “much better” than a similar project procured through the traditional approach.

Responses were received from nine agencies. Two agencies (the Department of the Interior and the Public Health Service) indicated that they had no design-build projects to report on. The other seven agencies submitted information on 27 projects,³ as follows: Department of the Air Force (AF), four projects; Department of the Army (DA), five projects; Department of Veterans Affairs (DVA), three projects; General Services Administration (GSA), four projects; Jet Propulsion Laboratory (JPL), one project; National Aeronautics and Space Administration (NASA), six projects; and the U.S. Postal Service (USPS), four projects.

To analyze the information received, the committee first collated the responses to Part 1 of the questionnaire to get a picture of the types of design-build projects reported on and the procurement procedures used. The committee then collated the responses to Part 2 of the questionnaire to determine how the respondents on average felt about the design-build approach and to try to identify the factors that might contribute to the success or failure of a design-build project.

The report comprises three chapters in addition to this introduction. In the next chapter, Chapter 2, the characteristics of the projects for which completed questionnaires were received are discussed. In Chapter 3, the survey respondents, subjective evaluations of the projects are discussed, with emphasis on analyzing why some design-build projects succeed and others do not. In the final chapter of the report (Chapter 4) the committee summarizes

its findings. Detailed summaries of the questionnaires that were returned are presented in Appendix A. Various analyses of the information in the questionnaires are presented in Appendix B.