Three Benefits Developers Should Expect
Design-build is quickly gaining traction in the United States as the preferred project delivery method in construction. In fact, according to Fails Management Institute (FMI), it will represent nearly half of construction spending by 2021. There are many benefits to the design-build approach over traditional design-bid-build methods. These benefits include faster construction and delivery, decreased cost overruns and schedule delays, and lower chance of litigation or other risks for the construction manager. In addition to considering these well-documented benefits, there are other deliverables you should expect from your design-builder.
1. Lower Pursuit Costs
Pursuit costs can have a drastic impact on a project’s return on investment. Worse yet, there is the risk of negative return on investment if the project fails to move forward. The best scenario is to make the go/no go decision as early and as inexpensively as possible. You should expect your design-builder to facilitate that decision-making process. Your design-builder should have enough experience and knowledge of costs in delivering your type of project to assist in proving your pro forma well before completion of the design. Waiting for construction costs to be known until after the design is complete should not be deemed an acceptable option. Paying for a full set of construction documents to determine that your pro forma numbers don’t work, causing significant time and effort to then “value engineer”, is not financially prudent.
2. Improved Delivery Process
You should expect a single point of contact and accountability, which reduces your risk of litigation. Look for a design-builder committed to process optimization. Bringing major subcontractors to the table early to assist with system designs and equipment choices reduces cost overruns and delays caused by long-lead items. Your building should function as you intended without receiving unexpected change orders, unless initiated by you. A technology-enabled design-builder can assist in making early, accurate decisions, better controlling cost and the schedule, with virtual reality walkthroughs and Building Information Technology (BIM). The ability to make changes during the design, rather than during construction, improves functionality, mitigates constructability challenges, and schedule delays.
3. Less Market Risk
Finishing your project on time, or even early, means increasing the odds that you open your building before adverse changes in market conditions occur. Shorter construction periods allow you to pay less construction finance interest, reducing overall project costs.
In addition, you should continue to receive benefits long after your contractual relationship ends. Be sure the designer’s and builder’s choices help reduce costs for as long as you own the asset. Choices for the structural system, such as concrete over wood, can help reduce life cycle, insurance, and maintenance costs and improve quality and livability, making it more sought after for renters or future buyers.
Realizing the Greater Benefits of Design-Build
When choosing a design-builder, be sure there are clear lines of responsibility amongst all parties. Ideally, in a design-build scenario, your contract is with the general contractor who is responsible for the performance of all other consultants, subcontractors, and suppliers. This completion guarantee is one of design-build’s greatest benefits over the traditional design-bid-build process where, as the owner, you hire a designer and contractor under separate contracts.
In the typical design-bid-build scenario, the owner frequently receives no guarantee for the correctness and completeness of the design, yet warrants to the general contractor that the design is correct and complete. It also places the burden of responsibility for expenditures related to sub-optimization, scope creep, change orders, and schedule delays that result from incorrect or incomplete design squarely on the owner. So for your next building project, be sure to consider design-build as it properly places the risk in the appropriate parties’ hands.
Dan Helmick is the Executive Vice President of Project Development for FINFROCK, a vertically-integrated, single-source design-build firm based in Apopka, Florida.
Dan oversees the conceptual design, design development, architectural design, sales, business development, and preconstruction process as well as acting as the owner’s key point of contact. He has been instrumental in bringing in multi-million dollar projects for FINFROCK, solidifying the company’s reputation as a leading Design-Builder in Central Florida.
His expertise in understanding successful project delivery processes that convey an abundance of project owner benefits has instilled confidence in clients who look to him as a trusted advisor for their building projects.
Go to FINFROCK.com to see what benefit our design-build experts can bring to your building project.