Design-Bid-Build or “Hard Bid” Delivery Model In the Design-Bid-Build delivery model, the owner contracts separately with the architect that produces the construction documents and the general contractor that builds the building. This is the traditional method in which the architectural plans are completed and then bid upon by various general contractors and the low bidder is selected to construct the building. One of the biggest advantages to this model is that by putting the project out to bid, you are ensuring that the open market provides you with competitive bid options.
However, there are 3 key disadvantages to this delivery model:
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- Budgeting – The design is completed without construction input, so the architect has limited ability to establish an accurate cost estimate early on. The Owner does not know the real cost of the project until the bids are received. If the bids are higher than the budget, costly redesign is often required. The responsibility rests with the ministry if the final bid numbers are beyond budget; the architect does not share accountability to support the ministry with creative cost saving measures to meet budget requirements.
- Contractor Quality – Since the general contractor and subcontractors are selected solely based on lowest bid, the quality, capacity and heart of the contractors are often a low priority. This can result in poor workmanship, poor response time, cost overages and warranty issues. It can also lead to the selection of builders that are not in good financial condition, creating a higher financial risk for the owner.
- Change Orders – Bidders have learned to “play the game” by providing an extremely low bid and not bringing potential changes or mistakes in the plans to the attention of the owner during the bid stage. Instead, they create margin for themselves by leveraging change orders throughout the project, which drives the cost of the project up.
Design-Build Delivery Model Design-Build is a method of project delivery in which one entity, usually led by a builder, works under a single contract with the owner to provide one unified flow of work from initial concept through completion. The design-build company typically has an on-staff architect that designs the project and then proceeds to build it. One of the biggest advantages of this approach is that it builds teamwork and eliminates adversarial conditions between the architect and builder which decreases conflict, delays and change orders. However, the key disadvantages are:
- Loss of Design Control – The Owner assumes the risk of a single contract with one design-build organization and “all eggs are in one basket”. Since the process is builder-led, the owner may not have the security (and comfort) of having an architect act as their agent throughout the project. While some design elements may be specified by the architect, typically the contractor is given more flexibility in design and the architect does not have as much insight into the design details. As such, the owner will lose some control of the design process.
- Less Competition. General contractors develop long term relationships with subcontractors and use them exclusively for their projects. In a design build process they negotiate the scope of work with those subs. Long time loyalties often lead to complacency in pursuit of the best value. Negotiated value engineering often reduces quality as well as price versus more creative solutions. The process excludes the possibility for other bright minds to weigh in on cost effective approaches. Seeking wisdom from a variety of subs is impossible.