ACHIEVING MORE SUCCESS IN DESIGN-BUILD
By Rick Maniktala, PE, LEED AP, CxA, MBA
Reduce risk. Drive innovation. Accelerate timelines. Ultimately, save money. These are the key benefits to teaming design and construction professionals under one contract in the Design-Build delivery method. Design-Build delivery can significantly lower costs and accelerate timelines*. The delivery method can also save a lot of time, and time is money. These cost and time savings are primarily achieved by transferring the risk for the delivery of the project design from the owner to the builder.
M.E. GROUP’s unique experience with Design-Build project delivery has resulted in innovations, efficiencies and best practices that have accumulated over:
The MEP infrastructure systems typically represent around 40% of the total construction cost and 60% of the assignable risk. We have learned what works and what does not work. There are two primary approaches to Design-Build for an MEP scope:
Design-Build with “Design-Assist” MEP Trade Partners, a common practice
It is common for Design-Build teams to place the MEP Trade Partner in a “Design-Assist” role. Lump-sum or GMP contracts are generally used between the Design-Builder and the Trade Partner. Contract language is included that asks they participate in the design process with the intent of controlling cost and budget while incorporating cost-efficiency innovations. The MEP Engineer/ Designer is contracted through the Architect. This arrangement may be chosen when Owners wish to retain more direct control over the MEP design if there is concern that standards and quality will not be maintained if the Trade Partners hold the design contract.
Lesson learned from “Design-Assist” teams:
- High-Engagement with Open-Communication: A high level of design-phase engagement with no barriers to communication is the KEY to success. It requires the absolute best efforts on the part of the GC and Design Team in order to fully engage the MEP Trade Partners during the design phase. Anything less than full engagement will fail to yield the best possible results for cost-control and efficiency innovations.
- Efficient and Lean Hand-Off: The hand-off between MEP design and construction should be efficient and LEAN. Unfortunately, the majority of the time we see this process resemble design-bid-build projects with hand-off occurring only after design is complete. We have developed strategy and management tactics to maximize engagement and maintain a lean hand-off process.
- Risk Allocation: According to industry experts, including DBIA, one of the fundamental best-practices for design-build is to “allocate risks to the party that is best capable of addressing and mitigating the risk. The “Design-Assist” arrangement doesn’t fully transfer RISK away from the Design-Builder or Architect. This is especially true when the MEP trade partner is not provided with a contract amount until 75 or 100% CDs are issued. In that case, they simply are not contractually motivated to fully manage risk /costs during design development.
Design-Build with “Design-Integrated” MEP Trade Partners, reduces risk with great results
In the “Design-Integrated” teaming arrangement, the MEP Trade Partner holds a design-build contract with the GC. The MEP Trade Partner contracts with the MEP Engineer/Designer. Therefore, the MEP Trade Partner is allocated all risk associated with the scope. The MEP Engineer/Designer must also provide design collaboration services with the Architect, Design-Builder and Owner.
In order for this arrangement to maximize success it is essential that the Design-Builder, Architect, MEP Engineer and MEP Trade Partner work in true partnership and share common goals, purpose and vision for the project. A culture of collaboration and open communication should be fostered and nurtured from the onset.
A “Design-Integrated” approach is the preferred way to allocate risk to the the party in the best position to manage it. The MEP Trade Partner and Engineer are encouraged to work in unison to achieve all project parameters within budget. Delivery efficiencies are maximized by a LEAN approach to the MEP design and construction scopes. This efficiency translates directly to cost and schedule savings for the project.
M.E. GROUP engages in more “Design-Integrated” Design-Build projects every year. The goal is increasing engagement, incorporating lean concepts and properly allocating the risk. The majority of the allocate-able risk is with the MEP systems, so why wouldn’t the Design-Builder seek to allocate the majority of the project risks to the party that is best capable of addressing and mitigating the risk?
I believe “Design-Integrated” delivery of MEP scopes is not as common today for three reasons:
- A shortage of specialized MEP design teams in the market with experience and understanding of how to successfully collaborate on design-build projects.
- Insufficient access to design-build experience in the Trade Partner market.
- A lack of innovation, trust, accountability, checks and balances when MEP design & construction are being provided under one company instead of two best-in-class companies in partnership.
M.E. GROUP’s process fully embraces the partnering concepts and Trade Partner experience. We leave our egos at the door and seek to break down the traditional barriers to collaboration that have existed between designers and contractors. No matter the delivery model, M.E. GROUP ensures that the Owner’s Quality, Operations and Maintenance, Energy and Budget goals are all achieved or exceeded.
When implementing a “Design-Integrated” team to transfer risk to the Trade Partner, I recommend the following for success:
- Select an experienced “best-in-class” MEP design firm with an extensive background in Design-Build and a proven track record of success on Design-Build projects. In addition to project-type experience, ensure that team members are experienced with design-build and have the right attitude to achieve results.
- Select experienced “best-in-class” MEP Trade Partners who fully understand the paradigm shifts required to deliver Design-Build projects. Have the MEP Trade Partner provide resumes for their pre-construction team and validate design-build experience and their ability to predict and mitigate project risk.
- Integrate the MEP Trade Partner with a like-minded “Best-in-Class” MEP design firm that is capable of satisfying the Owner’s Project Requirements, Architect’s Coordination Requirements and Sub-Contractor’s risk management and cost-control needs.
Rick Maniktala has been in the industry for nearly 20 years. He currently leads M.E. GROUP’s Kansas City office as the Vice President. He holds certifications as a LEED Accredited Professional, Certified Commissioning Authority and Healthcare Facility Design Professional. In the last 5 years, he has successfully lead more than $500M in projects with varying levels of sustainability and difficulty. Rick is committed to providing the progressive solutions for owners and clients.