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Project Delivery Debate
DBIA RMC hosts debate about pros and cons of design-build vs. CM/GC
By Amy Bryer
Construction professionals discussed the pros and cons of two rival project delivery processes during a Design-Build Institute of America Rocky Mountain Chapter luncheon in late May.
The construction management/general contractor delivery method has been used widely in Colorado as an alternative to design-build. Industry leaders have their own personal preferences for delivery, but complaints about cost control and project quality were lodged against both CM/GC and design-build.
Although the debate will never be compared to a De La Hoya-Mayweather title fight, the panel of construction professionals came up with a split decision on the advantages and challenges presented by the two delivery methods.
CM/GC brings contractors into projects early to help owners with price estimates, but contractors and designers have separate teams working with the owner, who maintains control over the design. Some owners fear the quality of the project can suffer because contractors are making decisions based on price, says Bill Green, president of The RMH Group, a Denver engineering firm.
“Owners fear contractors could cheapen a job because they’re not as sensitive to quality,” he says. “Contractors’ priorities are cost and schedule.”
In design-build, architects and contractors work out problems internally, leaving the owner largely out of the conflicts. The owner, who has a single point of contact with the project team, usually feels like the process runs more smoothly. However, some owners are concerned about the loss of control over design, Green says.
Owners have more control over design with CM/GC projects, but they may lose a grip on the cost. Under the CM/GC process, project estimates can change dramatically if the contractor is relying on numbers from low-bidder subcontractors. As the design evolves or changes, the price goes up, Green says.
That was the case for Ball Aerospace. Guy Fromme, a senior manager of facility planning, engineering and construction at Ball, says CM/GC projects for Ball have been expensive. “Owners are really uncomfortable waiting until the end to know the price, and contractors’ estimates are only reliable when the drawings are 100% complete,” he says.
Other owners disagree.
About DBIA
The Rocky Mountain Chapter of the Design-Build Institute of America was founded in 2002 and has a membership of 260 divided nearly evenly among contractors, designers and owners. The national DBIA was founded in 1993.
Design-build projects make up more than 40% of nonresidential projects in the United States, according to the DBIA.
For more information, go to www.dbiarockymountain.org. |
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Cheryl Humann, executive director of construction management for Jefferson County Schools, says the district has used both design-build and CM/GC with mixed results, but the district prefers CM/GC.
Humann says she isn’t concerned about cost overruns because the district has a guaranteed maximum price with CM/GC projects. And because the deadline is early in the process, construction delays are also less of a problem, as is quality control on CM/GC work because the district has strict technical guidelines.
“I have more concern about quality with design-build because they’re making decisions on changes and working for the contractor who’s trying to make a budget,” Humann says.
Others in the industry think a compromise can be struck with the best of both design-build and CM/GC.
Why not have a guaranteed maximum price—often found in CM/GC projects—along with design-build, says Pete LeClair, operations manager with Greeley’s Hensel Phelps Construction Co. “If you have a 100% open book, you can give money back to the owner at the end of the project,” he says.
Hensel Phelps built the Wellington E. Webb Municipal Building on a pure design-build GMP contract. “Everyone bid on it in the beginning, audits were done all along the way and all the savings were returned to the owner at the end of the project,” LeClair says.
Operating with an open book may work in theory, but Green is skeptical that most contractors would be willing to have their project numbers audited.
“Contractors play it pretty close to the vest,” he says.
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