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INFRASTRUCTURE OUTSOURCING

Appendix

Alternative Project Delivery Methods

f s the pressures on government agencies to deliver infrastructure projects and maintain existing a c i l i t i e s h a v e e v o l v e d a n d a s t h e o u t c o m e s s o u g h t h a v e b e c o m e r i c h e r t h e i d e a t h a t t h e r e i s a l w a y s o n e b e s t w a y t o s t r u c t u r e a p r o j e c t h a s l o s t i t s c a c h e t . S p e e d , f l e x i b i l i t y , i n n o v a t i o n , a n d a c c e s s A to skilled personnel have joined cost savings as key motivations for outsourcing elements of project delivery, and project structures have changed as well. Paralleling the evolution of best-value methods for structuring procurements has been the evolution of value-based delivery systems—delivery systems that match the goals of an individual project. “Public agencies recognize that not every project is cut out for traditional DBB [design-bid-build]. Shorter construction time frames and financial and political constraints lead to the use of

design-build (DB) or a permutation of DB.” it requires evaluating at least four factors:

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Choosing the right project delivery system is not always easy;

  • Agency’s needs;

  • Agency’s expectations;

  • Risks that agency is willing to take; and

  • Size of agency’s pocketbook.159

Agencies should be certain they understand the alternative delivery systems available and then consider the weight of the four factors listed above in determining the best option for the project. As an aid, we provide a basic overview of some delivery systems, along with some discussion of their advantages and disadvantages (Table 3 on the following page gives a brief overview, and we discuss some of the options in more detail below).

A. Design-Bid-Build (DBB)

DBB is the traditional project delivery system in the U.S. construction industry—the department contracts with a constructor after the design is finished. The department will either contract with a design company for complete design documents or do the work in-house. Then the department will solicit fixed-price bids from construction companies to perform the work. A department will usually select one contractor that agrees to complete the work in accordance with the plans and specifications. Assuming no changes to the plans, a firm project cost is established. “However, the [department] must perform two selections, first the architect, and second, the constructor—the constructor is selected after the completion of design, thus omitting constructability reviews.” 160

158

Kenneth L. McGowan, “Value Based Delivery for Public Owners, Professional Engineers, July 2000, p. 1.

” paper presented to the National Society of

159

Ibid.

160

Kaye and Kreutzen, Meeting California’s Infrastructure Challenge, p. 14.

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