Contract Glazing

Design-Build Expected to Grow in the Next Three Years

The share of design-build projects among total construction spending is anticipated to grow 18 per-cent from 2018 to 2021, reaching more than $320 billion. It is expected to rep-resent up to 44 percent of construction spending in the assessed segments* by 2021 according to the “Design-Build Utilization” report from FMI.

“Owners have traditionally employed design-bid-build as the project delivery method of choice. As owner needs and project demands have changed, owners have become increasingly likely to assess the option to employ alternative delivery methods,” reads the report. Overall, owners surveyed identified delivery schedule as the greatest influence in project delivery method selection, with 48 respondents identifying it as extremely influential. It was followed closely by owner goals and objectives, contractor experience and initial cost.

“Understanding the needs of owners is highly important for industry participants. The ability to get in early and develop strong communication and understanding of what the owner values provides a solid foundation for successful project delivery,” reads the report.

According to the report, while the education process for design-build is expanding, the lack in owner knowledge and understanding is a limiting factor for greater utilization.

Eighty-two percent of owners said they have used the design-bid-build method, while only 58 percent have used design-build and 50 percent have used the construction manager/general contractor (CMGC)/construction manager at risk (CMAR) method. The integrated project delivery (IPD) and engineer-procure-construct (EPC) methods are more specific to select segments. IPD is used more in the health market whereas EPC is used in the heavy industrial market. Six percent of owners have used EPC and only 3 percent have used IPD.

According to a USGlass reader poll conducted in 2016, 34 percent of respondents reported using IPD and/or design-build for at least 50 percent of their projects in 2015. Forty percent reported using the methods for at least 30 percent of their projects, 20 percent reported using the methods for at least 10 percent of their projects and 6 percent reported using the methods for at least 1 percent of their projects.

As the education process for design-build continues to expand, adoption and use of design-build on projects is expected to grow.

“Overall, owners indicated receiving significant value from design-build when employed on larger and more complex projects. These projects al-lowed for greater opportunity to provide project innovations and subsequent cost savings,” reads the report. “In addition to larger and more complex projects, design-build utilization continues to expand into project sizes less than $25 million as owners continue to gain exposure to the benefits of design-build.”

From 2018 to 2021, design-build growth rates are anticipated to be highest in the Mountain (6.3 percent), Pacific (6.1 percent) and South Atlantic (6.2 percent) regions of the U.S. from 2018 to 2021.

While design-build is expected to grow to 44 percent from 2018 to 2021, design-bid-build is expected to drop to 19 percent of total construction spending.

According to the report, design-build is anticipated to account for 45 percent of nonresidential construction spending, or $990 billion out of $2.2 trillion in U.S. nonresidential construction put in place for the target segments. That’s an increase of 3 percent from the 2013 to 2017 period.

*Assessed segments include religious, public safety, communication, amusement and recreation, lodging, health care, transportation, office, commercial, manufacturing, educational highway/street and water/wastewater.

To view the laid-in version of this article in our digital edition, CLICK HERE.

This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.