Volume 36, Issue 9, September 2001

Team Building
More and More Construction Professionals Gear Their Jobs to Go the Design-Build Way
- by Ellen Giard

Ask a construction professional how long the design-build method has been around and you may get any number of answers. Some say 20 years, others the last decade. Still there are those who consider some of the world’s most renowned structures, such as the Pyramids of Egypt, the Eiffel Tower and Taj Mahal to be epics of design-build. “Design-build dates back to the [time of] the pyramids,” said Mark C. Friedlander, an attorney with Chicago-based Schiff, Hardin & Waite and partner and co-chair of the Construction Law Group. “It is the original form of construction. There used to be no separation between design and construction.” It wasn’t until the early twentieth century the trend toward separating design and construction arose due to a conflict of interest. Now that separation is being reversed. 

Defined loosely, design-build means all construction elements—architecture, engineering and construction—are combined into one resource. In other words, there is no separation of the design and the build procedures; as the building is being designed, it is being constructed. And, it’s no secret, more and more construction professionals are opting to go the design-build way. “It’s a trend, and there’s a lot of contractors, subcontractors and architects doing a lot of it,” said Glenn Heitmann, president and chief executive officer of St. Louis-based Heitmann & Associates Inc. 

According to statistics compiled by the Design Build Institute of America and F.W. Dodge DATALINE, the number of design-build contracts increased 103 percent from April 1995 to April 1996. “Of a $212 billion construction market, approximately $37.2 billion (roughly 18 percent) was design-build,” said Friedlander. “Its popularity is owner-driven, primarily because of shortened delivery times and single-point responsibility for project design and construction,” he said. 

How it Works
In conventional construction the process begins when an owner hires an architect to create the project’s drawings and construction documents. The owner and/or the architect next hires a general contractor who, in turn, bids out the various subcontractor jobs required for the project. With design-build a project owner retains a contractor, who then hires an architect and the subcontractors. “Everything happens through the general contractor, and we see a true team working together, ” said Heitmann. “In the past, architects have had more control over the design and in design-build they don’t.” Under a traditional construction structure, drawings are complete before construction begins. Heitmann added in design-build, the project is started even as the drawings are being created. “We’ve definitely seen a lot more of it … and that has to do with getting the job done quicker, and ultimately the general contractor is taking on more responsibility,” he said.

According to Heitmann, the general contractor typically will talk with the sub up front and explain the project to find out what the sub thinks he can bring to the job. Design-build, he explained, is more about working together, with those who work well together, and not who will do the job for the least amount of money.

Bill Nash of McCarthy Construction, located in St. Louis, says design-build construction consists of a collaborative team made up of the owner, designer, contractor and subcontractors. “The design-build team is assembled through an interview process or past experiences,” said Nash. “All major components come into the team by either invitation, recommendation, experience with the general contractor or by virtue of the fact they have design-build experience,” he added. Nash said that in many cases the contractor is in a venture with the designer to find the lowest possible costs for the owner. For instance, if an owner pays for a cheaply designed building, as opposed to using higher-quality building products, he will spend more over the years in the building’s up-keep than he would have otherwise.

“It seems like all construction is design-build today,” said John Heinaman, president of Heinaman Contract Glazing in Lake Forest, Calif. “Conventional construction calls for the plans and specifications to be 100 percent complete and the building constructed per the documents. In design-build, the architectural drawings are not complete. The architect gives us the design criteria (what the building will look like) and the performance criteria, and then says, ‘The rest is up to you.’” 

Japanese American Museum The Japanese American Museum in Los Angeles is an example of design-build construction.

According to Ralph Davenport, owner of Davenport Glass in Spartanburg, S.C., it is through the initial discussions and meetings with other members of the design-build team that the project scope is established. In design-build, Davenport said, glazing subcontractors are asked to design, for example, the storefront or entrance portion of the project, as opposed to the entire design being drawn by the architect. In most cases, though, the designs still have to be approved by an architect or engineer. “We meet with the owner and the architect [who in many cases is employed by the general contractor] and we go over the project … what structures will work, colors, wind loads, etc.,” he said. “This really creates a trust and ensures the owner will get the best possible product.” He added that subcontractors generally tell the owner up front what his costs are and his price for doing the project.

Something to Gain
Many glazing subcontractors who have moved towards the way of design build have found a number of benefits to the process, one of which is being more a part of the construction team. “It is critical [that the general contractor and other members of the team] work closely with the subcontractors,” said Nash. “Otherwise, there will be no success. You need high-quality subs in order to be successful. You’re asking them to do part of the design work.”

Other benefits include a single-source responsibility, shortened project delivery time and fewer claims and change orders. According to Heitmann, with single-source responsibility, there's better communication among team members, and there's a better chance of getting it done quickly.

Friedlander agreed. “In traditional construction, problems with the project often result in finger-pointing, with the designer blaming the contractor and vice versa for problems in the plant’s operation.” He continued, “In design-build projects, the design builder has full responsibility for the outcome of the project, except for matters for which the owner is responsible … the designer and the constructor are the same entity, so blaming each other does not excuse the design builder.”

Another positive, according to Heinaman, lies in the sense that glazing subcontractors are able to do part of the design work. “If the architect did it all his way it might not be right because they are not experts. With design-build they are letting the experts do it [design portions of the project],” he said. “The overall appearance of the project is designed by the architect, but how you make the designs work specifically and the performance of these designs becomes our responsibility. They show what it [the building] looks like and we make it work.” 

Davenport adds that being able to work closely with the others involved is beneficial to the outcome of the project as well.

“When you’re dealing with the owner face-to-face and you find out what he’s thinking, there’s often a tendency for you to do a better job.”

In addition, the otherwise prevalent problem of getting paid (see related story, "Where's my Money?"), may not be as troublesome for some. “You know going into it what your profits are going to be,” said Davenport. “I’ve established a good relationship with the general contractor and an even better one with his subcontractors, and that works best for the owner.” 

Heinaman says subcontractors can create their own terms early on in their proposals, such as asking for early payment for design and engineering. “You can include better terms for yourself and if they [general contractors] like your terms from a dollar standpoint you have a better chance of getting what you want.”

According to Nash, subcontractors probably find getting paid is easier in design-build because everyone is treated as an equal. “They [subcontractors] are all well-informed and aware of what the other subs are doing,” said Nash. “They get paid to do the design, then the procurement, then the installation, so cash flow is enhanced as well.”

However, Nash adds design-build is not for every subcontractor in every geographic market. He explained he had recently driven through a small, rural Missouri town where he had seen Ford and Chevrolet dealerships, but no Lexus or Infinity dealerships. Why? “Because chances are in small, rural Missouri towns there isn’t a need for such dealerships,” he said. The same goes for subcontractors and design-build; in small towns, where there is not a lot of construction activity, there is probably not much need for glaziers to practice design-build.

Shortcomings and Solutions
Despite the numerous benefits of design-build and the hordes of construction professionals heading in that direction, there are still downsides. One disadvantage lies in the fact that design-build is a new process to many in the industry. “There are people who aren’t familiar with it and dealing with something new is always an obstacle to overcome,” said Heitmann. He added that there are also those who don’t see design-build getting the project done any faster or cheaper than conventional construction.

Some glazing subcontractors feel that more risk and liability are passed on to them with design-build. Heinaman says general contractors often require subcontractors to be bonded (see related story, July 2001 USGlass, page 28). Although bonding is not required on small projects, Heinaman says some general contractors require glass companies to bond any project more than $100,000. “Sometimes the contract glazier or the structural engineer has to provide errors and omissions insurance,” he said. “The general contractor may also want the policy written job-specific because he wants to minimize his risks and pass them on to someone else.” 

A Different Version
Other contract glaziers are going a slightly different route than design-build. Tom Kretschmer, vice president of U.S. sales for Harmon Ltd., says they predominately follow a process in which they assist with technical and pricing information in the initial design phase of a project, but still must bid to win the job as a subcontractor. “True design-build equals a true partnership among the key participants involved,” he said. “Our method is better identified as a design-assist performance based on an award process. We give our concepts and value input during the design phase, but we still have to compete to do the work.” 

However, Kretschmer says that unlike a true design-build project, their method lacks the all-around partnership. “There is still a lot of hesitation, distrust, etc., between the layers of participants. Unless roles, responsibilities and expectations are clearly defined up front the process is not really design-build,” he said. “For example, the architect may not trust the contractor and subcontractor to honor his design contract ... the general contractor may not allow the sub to become directly involved because he is giving up control over the sub.”

Like true design-build, variable methods, such as the one explained by Kretschmer, also have their struggles. “No matter how diligent we are in trying to understand what the key participants’ goals are for a project, we are only an occasional participant, and not really involved in all of the meetings that take place. Therefore, we do not really know what their true expectations are relative to the design, quality, value and price.”

Other companies follow similar methods. According to Jim Theisen, operations manager for Harmon Inc.’s Minneapolis office, he has never participated in design-build projects, but he has worked on what he calls design-development projects. In these cases the architect is most likely working for the project owner rather than the general contractor. The general contractor brings on the glazing contractor to partner with the architect in the pre-bid stage and help design special conditions of the project. 

Theisen says another advantage of this method is working with clearer documents. “In a hard-bid situation [traditional construction] you’re bidding off the same documents with everyone else, but these documents often contain boiler-point descriptions,” he said. “If the documents are not complete, I might interpret the documents one way and my competitor interprets them another.” According to Theisen, this also can be a disadvantage if the glazing contractor with the lowest bid has interpreted the drawings incorrectly. “They may not take into account the custom specifications needed for this particular project,” he said. “By being involved up front we can make sure the documents agree with what the project really requires. Deficiencies are eliminated or minimized through the design-development process.”

Theisen says the design-development method can also be risky. “Part of the risk of design-development is that you invest your energy and ideas, which are given to the architect before it goes to bid. This means another glazing contractor could be awarded the project.” He adds that such issues are infrequent.

Looking Ahead
As design-build construction merges closer to becoming one entity, experts say the subcontractor’s role is not likely one to be absorbed by the general contractor. According to Heitmann, there are some construction roles that can be self-performed by the general contractor. Glazing, though, is not one. 

“The role of the glazing contractor will never diminish because it is specialty work,” he said. “General contractors will never take the place of the glazier or curtainwall installer. They don’t know enough about it.” 

Friedlander agreed, adding that design-build is now the norm for some subcontract trades. “It’s a collection of experience in the contractor’s design,” he said. “For example the general contractor procures the sub to design the curtainwall system which has to meet the pre-established criteria set by the architect/engineer.”

For those enjoying the design-build bandwagon and hope to see more of it, chances are you definitely will. But will design-build one day replace conventional construction completely? Heinaman says the chance is likely that all private construction will one day become design-build, but not so much with public construction. “There’s no negotiation on public jobs,” he said. “The low bidders get the job so there’s not much room for design-build.”

Kretschmer disagrees. He says the public sector is leading the way toward design-build. “They will advertise for a pre-formed team to do the job, and teams made up of key participants will submit one bid, as a team. There is a true identification of roles and responsibilities and at the end of the day they win or lose as a team.”

Nash, however, doesn’t believe design-build will ever completely replace conventional construction. “I just go back to my statement: You don’t see too many Lexus dealers in small towns in Missouri.”

        


USG

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