The Advantages of Design-Build
The concept of design-build has taken on a more important role in the delivery of healthcare projects over the past few years. Of the three traditional delivery options available (lump-sum bid, construction management at risk and design-build), design-build is perhaps the least understood, yet has the potential to provide very satisfying results. Since much information is available regarding this process, whether through books, the Internet or the Design-Build Institute of America, this article is meant to merely touch on a few of the important issues to consider when evaluating this delivery method.
There are several reasons for the movement toward design-build in healthcare, but the main driving force has been the organizational consolidation that has taken place during most of the past 10 years. Consolidation of healthcare organizations has resulted in a building boom that is unprecedented in recent memory. In addition to the quantity of capital programs, the project sizes themselves are larger.
The demand for the design-build approach arises from several needs and desires: for shorter-duration projects, because of the intense pressure to compete; for an early and meaningful adherence to a budget and schedule; for construction innovation to ensure that the goals and mission of the program are protected and maximized while staying within budget; for reduced litigation between partners in the project; and for a coherent way to address the fact that many hospital facility capabilities might have been lost during post-consolidation cost cutting. With these in mind, owners are turning to the design-build process to achieve:
Stabilization and reduction of cost. Although very few empirical data exist to document the specific amount of cost savings produced through design-build, there is sound reason to expect an overall cost reduction. This would stem from two major features of design-build: the decrease in project duration and early introduction of the contractor's knowledge into the design. Also, some owners choose design-build to better secure a fixed construction cost; i.e., by allowing one entity total control over project design, scope and budget, there is less opportunity for scope-related change orders. Additionally, the closer relationships among architects/engineers and contractors in a design-build team tend to reduce liability issues associated with increasing project cost.
Establishment of schedule. For the same reasons some owners choose design-build to stabilize cost, they might choose it to better establish a fixed schedule. Most of the schedule lengthening that occurs when using the traditional method stems from communication problems between the design team and contractor (e.g., continuous requests for information, design errors, design omissions, etc.). By allocating all responsibility to one entity, owners find these time-consuming issues to be minimized.
Reduction of claims. Implicit in the design-build process is an owner's shelter from liability. Since the architect will no longer act as an agent of the owner, design errors and omissions are solely the responsibility of the design-builder. Design-build is not a magic cure for the construction industry's litigation problems, but it does inherently promote a nonadversarial relationship between designer and builder.
Reducing complexity. Many owners have neither the staff nor the experience to manage the traditional triad of owner-designer-builder. Taking one player out of the game lessens managerial tasks on large or complex construction projects. It should be noted, however, that the owner's involvement early in the process is often increased be-cause the design entity is no longer the owner's partner in developing the project.
There are many variations of the process, but the most important feature of design-build, for purposes of this discussion, is that design and construction are performed by one entity under one contract with the client. That entity can be a firm that provides both services under one roof, or an affiliation of two firms (one design and one build) that have come together for the purposes of this project. In either case, it is important that the design-build team offers to the client the independent and varied cultures of both the architect and the contractor.
Not all projects lend themselves to this delivery method and, in fact, a project should have certain characteristics to be considered for this in the first place. They are:
A well-defined scope of work. Since a formal guarantee will be requested prior to the completion of construction documents, the owner should have established in his or her own mind a well-defined program and scope of work.
A shared understanding of that scope between the owner and the design-build team. Getting the scope and program properly communicated to the team is one of the single most important issues for the owner. An owner will be seriously disappointed if he or she assumes that the design-build team members will define and implement the project on their own.
An educated staff. Because cost guarantees are provided prior to the completion of the contract documents, it is important to have staff who are conversant with and capable of understanding conceptual documents, especially since many decisions are made with minimal information.
Construction sophistication. There is a tendency in the design-build process for the owner to relinquish certain decision-making authority to the design-build team. This is not a good idea, and to overcome that tendency, the ownership team (i.e., facilities management, developer entity if appropriate, owner representative, contract administrator and all other individuals normally part of the decision-making process) should have some degree of understanding of such crucial construction management areas as conceptual analysis.
A formal and clearly established budget. It is important for the design-build team to understand the entire budget, both hard and soft costs, so it can be determined early on whether the budget is sufficient for the desired program.
A formal and clearly established completion date. The date must be realistic, so budget dollars won't have to be spent to compensate for or overcome missed deadlines through the use of overtime and/or accelerated deliveries.
Design-build is not a new concept. Traditionally, it was relegated to the more simplistic building products, such as industrial or commercial projects. The explanation is simple: Those types of products were more closely aligned with the program characteristics listed above. Healthcare used design-build only for the more basic projects, such as medical office buildings or ambulatory care buildings. The more recent trend toward design-build, however, has been toward the more difficult acute-care or even tertiary-care hospitals.
Although design-build offers many advantages, dangers abound if the team is not selected carefully. It is important to make sure that the selection of team members is qualifications-based, not fee- or “commodity”-driven. Moreover, a team that specializes in healthcare is important to protect the subtleties of the program so that the owner's final product won't be compromised or seen as budget-driven. Current concepts of interest, such as evidence-based or patient-focused design, that have the potential to improve healthcare and make the owner's facility more competitive must not be compromised. Neither should the requirements that buildings be sufficiently flexible to adapt to future medical breakthroughs or evolving management technologies.
As is true of all delivery methods, the best way for an owner to reduce his or her risk with design-build is to be an active participant in the process. This will include recognizing and understanding the inherent legal issues relating to insurance, surety products, contract language and other details of the process. HD
Robert Levine is vice-president and manager of Turner Construction Company's national healthcare market segment and has had a 40-year career focusing exclusively on healthcare capital programs. The construction firm is a subsidiary of The Turner Corp., Dallas Texas, which is owned by Essen, Germany-based Hochtief and completed nearly $6.3 billion of construction in 2001. For further information, phone (314) 721-0100 or e-mail