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Report: Design-Build Use Growing in U.S.

Tuesday, July 17, 2018

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While design-bid-build remains the most widely used project delivery method in the U.S., a new report indicates that design-build delivery—in which an owner works with a single entity for both the design and construction of a project—is on the rise, largely thanks to tightening budgets and the desire to shorten project timelines.

According to the report, published by the Design-Build Institute of America, DB methods will compose 44 percent of construction put-in-place spending across a number of market segments by 2021.

The study’s findings were developed through a combination of DBIA-provided contacts and Fails Management Institute internal contacts, totaling 82 interviews and 101 survey responses from construction firms in all revenue categories. The assessment covered religious, public safety, communication, amusement and recreation, lodging, healthcare, transportation, office, commercial, manufacturing, educational, highway/street and water/wastewater.

Design Build Use Report

According to FMI predictions, collective DB CPiP spending in the aforementioned segments is likely to increase 18 percent between 2018 and 2021, climbing from $274 billion to $324 billion. The manufacturing, educational and highway/street segments are expected to take the top three spots in terms of market shares—16 percent, 15 percent and 14 percent, respectively—by 2021.

© iStock.com / Worawee Meepian

While design-bid-build remains the most widely used project delivery method in the U.S., a new report indicates that design-build delivery—in which an owner works with a single entity for both design and construction of a project—is on the rise, largely thanks to tightening budgets and the desire to shorten project timelines.

DB and other alternative delivery methods, like construction manager at risk (in which a construction manager joins the project during design and oversees construction alongside the owner), have become more attractive to owners who are looking to tighten both project budgets and timelines. These alternative methods indicate that they provide “the best avenue to achieve the originally identified cost.”

As it stands, 82 percent of owner respondents said they had or planned to use DBB in the next five years, with 58 percent of owners saying the same for DB.

Gaining Momentum

Just over half of the owners surveyed predicted that DBB usage would stay the same over the next five years, while 32 percent predicted an increase and 15 percent forecasted a decrease. On the other hand, 29 percent of owners thought that adoption of DB would remain the same, while 67 percent predicted utilization would increase.

DB continues to gain momentum partially thanks to state legislation that facilitates the use of alternative project delivery methods. FMI consultant Paul Trombitas noted that DB methods encourage collaboration that may not be as prevalent in more traditional contracting arrangements.

Out of the owner respondents to FMI’s survey, 76 percent rated their experience with DB as “very good” or “excellent.” DBB and low-bid pricing are almost contradictory in comparison, according to Trombitas: They do not allow for innovation, early collaboration and identification of solutions in project delivery.

In a cohesive DB relationship, it is less likely that the owner will issue a change order.

For owners to make the adjustment to a DB project model, there likely needs to be something of a cultural shift, which includes adapting to a smaller role in the design process. Less competition also means a smaller number of companies that can pull together an effective DB team.

FMI anticipates that owner usage of DB is likely to increase as more people become better acquainted with the perks of the approach. Emphasis on educating owners and project stakeholders on the process is likely to facilitate greater utilization.

   

Tagged categories: Construction; Design; Design build; Design-Build Institute of America; Project Management; Research and development

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