The Changing Design-Build Paradigm

We’re back to work at ModSpace after a great week at the 2011 DBIA Conference & Expo. I wanted to share my thoughts on the week’s events and offer a modular company’s perspective on key messages.

It was refreshing to be so succinctly reminded of the components of the true Design-Build model: Sustainability, Accountability and Partnership. These principles are evident in what I think are the 3 key takeaways from the show.

Takeaway 1: Project Partnership is a Shared Commitment

A Design-Build “partnership” implies that all parties share equal responsibility. You will be more successful when you know the capability of each partner ahead of your base bid and proposal, and when you define the relationship based on the following roles:

  • Partner (few): Equal and shared value, risk, reward
  • Associate (many): Signed agreement to specific scope of work within a project
  • Commodity Supplier (many): Sourcing agreement to purchase material, labor at best cost

Takeaway 2: A New “Design-Build” Paradigm is Emerging

Shrinking budgets are driving state and local governments to a new performance-based infrastructure. Design-Build is morphing into a Design/Build/Finance/Operate model, with risk assumed by the contractor and designer for the length of term. Rewards are structured to equal risks.

Takeaway 3: LEED Construction ≠ High Cost

The Department of Energy built a net zero LEED PLATINUM building on a fixed budget, using a performance-based RFP and selection process. Design effectiveness was measured against project goals, and each decision was weighed against cost. Support and trust was needed from all stakeholders.

I welcome your thoughts and comments. Did you leave the show with a different perspective? Do you have experiences you can share in any of these areas? Do you disagree with the takeaways? I look forward to the conversation.

3 comments

  1. Ben says:

    Sam,
    I’d like to learn more about the DOE’s net zero LEED PLATINUM building. It sounds like the costs were considered, but were they really not substantially higher than a building made to traditional standards?

    Ben

  2. Sam Tikriti says:

    Hi Ben-

    Thanks for your question.

    LEED expectations and pricing for the LEED items were weighed from the start. Preliminary LEED scoring was started during inception of project and used as a road map during design and execution.

    According to the team that executed the project, the budget was fixed prior to issuing the DB RFP and the net zero Platinum goal was required without exception. Owner/Stakeholders agreed to consider the net zero goal first and then weigh all construction types, finishes, methods against the goal.

    These requirements were set and had to be accepted by the winning DB team. A short list of potential submitters was determined based on interviews and basic approach to the project.

    The winning team considered every part of the building for its significance to achieve the platinum goal – for instance this meant that if 3 potential finishes were being considered, the one that contributed the most to the goal got first consideration – then the costs were weighed against the fixed budget. When all was said and done, the final project had a reported price of $264 per s.f. all inclusive.

    Here is a link to the NREL project: http://www.nrel.gov/sustainable_nrel/rsf.html

    Please let me know if you have any other questions.

    Sam Tikriti

  3. Dave says:

    The scope of the RSF was selected by the proposing DB team from a ‘Preferred Price Priority Queue” (3PQ) included in the RFP. Since the 3PQ is prioritized, the proposers selected scope from the 3PQ that they intended to provide for the owner’s ‘preferred’ price of $63m.
    This is known as a ‘fixed price – variable scope” model, and is the opposite of the traditional ‘fixed scope – variable price’ model, otherwise known as design-bid-build.

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