1. CHANGING PROJECT DELIVERY SYSTEMSby
Awad S. Hanna, Ph. D., P. E.
The University of Wisconsin, Madison
Department of Civil and Environmental Engineering
Construction Engineering and Management Program
Prof Awad Hanna

2. 1. Traditional Method (Design-Bid-Build)
Also known as Design-Bid-Build or hard money or Competitive bid contract (most commonly “plan & spec”).
Has three sequential phase
Design - Bid - Construction.
Architect-Engineer hired
Bid/Award
Design Phase
Construction Phase
Single Construction Contract
Prof Awad Hanna

3. Traditional Organization
Owner
A/E
General Contractor
Own Force
Sub-
Contractor
Sub-
Contractor
Sub-
Contractor
Sub-
Contractor
Prof Awad Hanna

4. Estimating Needs for Design-Bid-Build
Complete set of drawings
Specification
Other contract documents
General conditions
Special conditions
Addenda
Others (soil report)
Prof Awad Hanna

5. Hierarchy of Contract Document
Addenda
Special Conditions
General Conditions
Specification
Drawing

6. 2. Single Source Delivery
1. Design Build
2. Engineer/Procure/Construct (EPC)
a. EPC model#1 (Pure CM, Construction Management)
b. EPC model#2 (General Contractor
acting as construction manager)
c. EPC model#3 (A/E acting as CM)
d. EPC model #4 (CM acting as Contractor)
3. Others
Prof Awad Hanna

7. Fast Track or Phased Construction Method Used in DB and CM
CM and A/E or
DB hired
Concepts
Working Drawing
Design Phase
Construction Phase
Variable separate construction contracts
Prof Awad Hanna

8. Level of Influence Time Project Cost Influence Ability to Influence
Prof Awad Hanna

9. 1. Design Build Owner General Design Contractor Own Sub-Contractor
Engineer/
Contractor
Design
General
Contractor
Own
Force Work
Sub-Contractor
Single firm responsible for both design and construction.
Prof Awad Hanna

10. Form of Design-Build Organization
Owner
Owner
Owner
Owner
Design-Builder
(Architect/Engineer)
Design-Builder
(Contractor)
Design-Builder
(Joint Venture)
Design-Builder
(DB Firm)
Contractor
Architect/
Engineer
Prof Awad Hanna

11. Advantages of Design & Build for Owners
Owner only has to communicate with one entity for the entire project
Total project duration can be reduced because phased construction is easier to implement, (Fast tracking)
Integration of construction planning and design phases
Claims reduction (reduction of adversary relationships)
Innovation in design and construction can be encouraged
Risk assigned to party best able to manage that risk
Reduce change orders
Prof Awad Hanna

12. Disadvantages of DB for Owners
Fewer checks and balances, owner must rely on integrity of the design-build firm
Reduced owner involvement in the design process may result in less than expected results
All your eggs in one basket
Prof Awad Hanna

13. Advantages to a design-build organization
Improved constructability through design/construction integration
A specialized organization can be developed that has a specific expertise which will be attractive to specific market areas
Reduction of negligence claims between the Architect/Engineer and the construction contractor since they are under one umbrella firm
Ability to react rapidly to change in scope
Prof Awad Hanna

14. Disadvantages for the design-build firm
Acceptance of additional project risk
Possible premature release of bid packages (when using fast track) which can lead to increased errors in the plans and extras
Scope of work changes can be difficult to identify under DB/ fast track construction
Heavy overhead due to large multi-disciplined staff requirements
Prof Awad Hanna

15. 2. Engineer/Procure/Construct (EPC) a. EPC Model #1
a. Pure CM
Owner
In-House Design
or Engr. Firm CM
Specialty Contractors
and Vendor
Specialty Contractors
and Vendor
Specialty Contractors
and Vendor
Specialty Contractors
and Vendor
EPC Model #1
Prof Awad Hanna

16. Cost Saving due to Competitive Bidding
120,000
100,000
105,000
Bid Pkg 1
$ 90,000
90,000
95,000
195,000
202,000
Bid Pkg 2
$ 195,000
210,000
200,000
200,000
240,000
225,000
Best
Bids
Received
Best
Bids
Received
Bid Pkg 3
$ 220,000
235,000
230,000
220,000
350,000
320,000
Bid Pkg 4
$ 320,000
200,000
220,000
95,000
325,000
360,000
230,000
200,000
90,000
325,000
325,000
325,000
General
Contractor 1
$ 840,000
General
Contractor 2
$ 845,000
Total Project
Cost
$ 825,000
Saves
$15,000
By soliciting more bids and by passing the savings directly to the owner, the owner saves $15,000 compared to the best general contractor price. This example illustrates four bid packages. Typical commercial building projects may have thirty or more bid packages.

17. 2. B. Engineer/Procure/Construct (EPC) (cont.)
b. General Contractor acting as CM
Owner
Engineering/Procure
Construct (GC as CM)
Specialty Contractors
and Vendor
Own Force of the GC
Specialty Contractors
and Vendor
Specialty Contractors
and Vendor
EPC Model #2
Prof Awad Hanna

18. Other Models of Single Source Delivery Systems
C. A/E acting as CM
Owner
A/E and CM
Prime Contractor
EPC Model #3
Prof Awad Hanna

19. Other Models of Single Source Delivery Systems (cont.)
D. CM acting as Contractor
Owner
A/E CM
Prime Contractors
Contractor
EPC Model #4
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20. Others Owner Builder Owner C.M. CM Owner Owner A/E Design Department
Construction
Department
Prime Contractors
Contractors
Optional Own
Force Work
Subs
Owner Builder
Owner C.M.
Prof Awad Hanna

21. Estimating Needs for Single Source Delivery
Conceptual Design
Assemblies cost data
Update your estimate as the design develops
Value engineering studies
Prof Awad Hanna

22. Examples of Conceptual Design

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31. Value EngineeringⒸ

32. Required Conceptual Design and Assembly Cost Data
Example of assembly cost data Ⓒ

33. Design-Build Issues 1. Prequalification
The reduction of the number of possible bidders to a small group of serious, qualified bidders improves the effectiveness of the selection process.
Prof Awad Hanna

34. Design-Build Issues (cont.)
2. Proposal Evaluation
Cost only
Cost and time
Multi-parameter (quality, safety…etc.)
Prof Awad Hanna

35. Innovative Contracting Methods
Multi-parameter Bidding (A+B+C)
Multi-parameter bidding is a bidding system within the competitive bidding concept where successful bidder is selected based on the combined cost, time, and quality.
Prof Awad Hanna

36. Example of Multi-parameter Bidding
Lowest Cumulative Bid Cost
Prof Awad Hanna

37. Design-Build Issues (cont.)
3. Legal
a. Insurance and Bonding
The contractor should have the proper insurance to cover design deficiencies or cover construction errors.
b. Conflict of Interest
Design-build eliminates the checks and balance of the traditional methods.
Prof Awad Hanna

38. Innovative Contracting Methods (cont.)
Construction Warranties (DBW)
A warranty is a guarantee of the integrity of a guarantee of the integrity of a project and of the maker responsibility for the replacement or repair of deficiencies for a period longer than the traditional 1-year warranty.
It is different than project maintenance warranties that provide routine maintenance
Prof Awad Hanna

39. Summary of average differences between project delivery systems (CII-133)Ⓒ