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Insight

What’s the best delivery method for your next project?

Here are the pros and cons to the three most common alternative delivery methods.

Choosing from the menu of alternative delivery choices is a complex task, but finding innovative ways to obtain better value for your infra­struc­ture investment becomes easier as you build more projects in your portfolio. Each alternative delivery method offers a different set of benefits when compared to traditional design-bid-build. To help you better understand your options, we’ve developed this guide to the three most common forms of alternative delivery.

Construc­tion Manager-at-Risk (CMAR)
How it works: The owner contracts separately with the designer and construc­tion manager (CM). The CM acts as a consultant during design and as a general contractor during construc­tion. The CM’s respon­si­bil­i­ties include procuring equipment and subcon­tracts and delivering the project within a fixed, negotiated price. In most states, the CM must be a licensed general contractor.

Why it works: The CM is incen­tivised to provide valuable constructabil­ity insight during design that can avoid major costs and delays. All subcon­tract­ing tasks are compet­i­tively bid in an open and transparent fashion, which can result in major cost savings. The CMAR approach helps expedite project schedule through designer-contractor collab­o­ra­tion, and gives owners the ability to choose preferred equipment without sole-sourcing.
 
What you need to know: If you are putting your toe into the waters of alternative delivery with a CMAR project, it is best to start with a medium-sized project and choose an experienced team that can help you through the process. Also, while the transparent bidding process is a strength of CMAR, having to bid everything out is labour-intensive for the owner’s staff and the engineer. Moreover, the owner may miss out on some effi­cien­cies that might otherwise have been achieved by linking some of the subcon­tracted tasks together in a single bid.
 
The best choice for: Owners trying alternative delivery for the first time; owners that want to achieve the maximum degree of budget control; owners that desire complete trans­parency in the bidding process.
More information
http://www.cdmsmith.com/en-EU/Client Solutions/Insights/7 Tips for Optimizing Delivery
Read more on ways to optimise your delivery project.
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Lump Sum Design-Build (Lump Sum DB)
How it works: One contract is held with the design-builder, who prepares plans and spec­i­fi­ca­tions for permitting and construc­tion, hires and manages subcon­trac­tors, reviews submittals and shop drawings, procures equipment and builds the project. The owner develops the project with an advisor or bridging consultant up to a 30-percent design level, at which time design-build teams compete to offer the lowest qualified bid. The design-builder then carries out the project to completion according to the specified terms.

Why it works: Lump-sum DB provides account­abil­ity for price, time and quality, and the design-builder and owner know project costs at the outset of the design-build phase. Efficient scheduling and streamlined coor­di­na­tion within the DB team result in cost savings, increased response times and enhanced quality.
 
What you need to know: Lump-sum DB often boils down to a competition based on price, losing out on the innovation and collab­o­ra­tion that can add so much value to DB projects. Once the design-builder is selected, the owner has little or no trans­parency into the project as it proceeds. For these reasons, CDM Smith strongly recommends progressive design-build (see below).
 
The best choice for: Owners who are experienced in alternative delivery; projects that involve building the same design several times (i.e., a series of pump stations). 

Progressive Design-Build (Progressive DB)
How it works: Progressive DB projects involve selection of a DB team after the design is developed to an inter­me­di­ate stage by the owner. The design-build team works collab­o­ra­tively with the owner’s staff to prepare final plans, spec­i­fi­ca­tions and designs and carry out the construc­tion phase.

Why it works: Progressive DB offers the highest degree of collab­o­ra­tion with owner’s staff, including stake­hold­ers and operators. Construc­tion can start early. Innovative tech­nolo­gies can be effectively implemented with robust input from builders and end-users. A single point of respon­si­bil­ity assures owners of account­abil­ity throughout the process.
 
What you need to know: Find a project sponsor that can provide “air cover” for your team as you work through the process, and find an experienced advisor that can help you get buy-in from your legal and procurement departments. The procurement process requires careful management of admin­is­tra­tive costs, and DB may require insurance/bonding coverage to manage risk. This method requires a customised contract, and for public-sector projects in many states, a formal bid process. An experienced team can help engage your staff and avoid the cultural challenges that alternative delivery can present.
 
The best choice for: Owners trying design-build for the first time; imple­ment­ing innovative tech­nolo­gies; maximising owner involvement and operator input; meeting a very tight schedule; minimising conflicts and disputes.

 

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