Progressive Design-Build
Progressive Design-Build is an innovative approach to project execution utilized by IQA Solutions and Total Western Inc. This fresh approach takes the best qualities of traditional Design-Bid-Build and Design-Build and combines them in a new project delivery method. The Owner enjoys the benefits of both project execution approaches while minimizing risk and cost uncertainty.
Traditional Design-Bid-Build is widely utilized in the industrial sector on mid-to-large sized projects. Design-Bid-Build is most effective when the Owner has an experienced Project Manager, a team of knowledgeable engineers/operators able to support the project, and an ample schedule. Typically, the benefits and pitfalls of Design-Bid-Build are:
Pros:
Most common delivery method (familiarity)
Perceived to be lower cost due to competitive bidding
FEED Package during Engineering allows for conceptual go/no-go risk assessment
Cons:
Low-Bid Selection in construction process tends to lead to change orders, disputes, and claims
Owner manages multiple Contractors
Low Total Cost certainty
No collaboration between Engineer and Builder
Traditional Design-Build is typically utilized on small-to-mid sized projects. Design-Build is preferred when the Owner has limited resources to support the project and a demanding schedule. However, grouping scope development and engineering into the same lump sum contract as construction puts a lot of risk on the Contractor. This results in the following:
Pros:
Reduces Owner’s burden to coordinate between Engineer and Builder
Shortens overall Project Schedule
Allows Builder to provide Constructability insight during Engineering
Higher Total Cost certainty due to nature of bid, however cost typically has contingency built in
Single point of responsibility reduces risk of disputes and/or claims
Cons:
Lack of Engineering at time of bidding creates widespread differences in bids
Bids are typically full of assumptions and exceptions
Contractors are forced to include large amounts of contingency in their bids due to lack of information
Progressive Design-Build is best utilized when the project scope and end-product is ill defined, when there is a demanding project schedule, and when the Owner requires total cost certainty on the project. Progressive Design-Build combines the benefits of performing engineering under the Design-Bid-Build approach with the streamlined schedule, increased collaboration, and cost certainty of Design-Build. Progressive Design-Build allows IQA and TWI to provide a Guaranteed Maximum Price to the Owner during Engineering.
Progressive Design-Build is implemented by first taking a T&M approach to engineering for scope development and cost development. The goal at this stage is to define the scope and determine the project’s total value. This allows the Owner flexibility and opportunities to provide input early in the project. Once the Owner is satisfied with the scope and project value, IQA/TWI will issue a lump sum proposal to complete engineering and perform construction. Being able to execute the remaining project under Design-Build shortens the project schedule and provides the Owner with a fixed cost for the remainder of the project. Additionally, the lump sum price is free of exorbitant contingency, the bid has minimal assumptions/exceptions, and the Owner receives all the benefits of a Design-Build project.
Rather than estimating based on a detailed design, design is based on a detailed estimate. Rather than evaluate the constructability of a design, design is geared toward what is constructable. All the while, both Engineer and Builder are working toward the Target Value. The Guaranteed Maximum Price effectively eliminates the possibility of change orders (unless requested by the Owner). The Owner enjoys confidence in having Total Cost certainty and is able to make business decisions and plan effectively throughout the life of the project.
Progressive Design-Build:
Pros:
FEED Package during Preliminary Engineering allows for conceptual go/no-go risk assessment
Project’s Total Value determined early in the project life cycle
Reduces Owner’s burden to coordinate between Engineer and Builder
Shortens overall Project Schedule
Allows Builder to provide Constructability insight during Engineering
Guaranteed Maximum Price allows Owners to plan and make business decisions
Single point of responsibility reduces risk of disputes and/or claims
Cons:
New delivery method (familiarity)
No Bidding Process