NEW ORLEANS — Nearly half of all spending in the U.S. nonresidential market now goes to design-build delivery methods. That’s the resounding anthem of the Design-Build Conference & Expo held here this week to salute the 25-year progression and keeping of the Design-Build Institute of America.
“Design-build is no longer an ‘alternative’ delivery method,” said Haskell Construction founder Preston Haskell, reflecting back to when he co-founded the association in 1993 with several other design-build pioneers who joined him on the stage Thursday to address up to 2,000 attendees.
“The method was a disruptor to the standard business model then,” co-founder Richard Kunnath, president of the Charles Pankow Foundation recalled. “Why wouldn’t everybody want to use this model, I wondered then.” Well, there was resistance from folks in the industry who had been completing projects solely through traditional methods such as design-build-bid, Kunnath said, because that’s what they knew best. New methods were — and still are today — often seen as a form of “moving around people’s cheese,” he added.
But after the dust settled in those early days, Donald Warren, another founding father, noted observers began to see the reason the method thrived is because owners saw results: “Projects were delivered cheaper, better and faster,” the McCrory Construction executive vice president said, “and they will continue advancing in those directions.”
Now, 47 states are embracing design-build procurement and delivery for government projects and the lone holdouts are likely to follow eventually, if not soon, the group’s founders promised.
Snapshot of the method’s continued evolution
The outlook is bright, according to Jim Hawk of Rosendin Electric, who shared research from FMI Corp. predicting that spending on design-build projects will ratchet up around 18% in the next three years to around $324 billion.
No market sector is spared from the delivery method’s advances, the Rosendin executive vice president continued during the Wednesday presentation, calling out building types such as data centers, which are one of the fastest-growing staples for Rosendin, and renewable energy facilities — a slice not even represented yet on FMI’s pie. Beyond the data, Hawk noted he can tell anecdotally that the delivery of those segments through design-build will expand like “gangbusters.”
“Projects are getting bigger, taller and more sophisticated, and many of those owners and developers are turning to design-build.” Jim Hawk, Executive Vice President, Rosendin Electric
“There’s a lot more money going into these projects and they’re more architecturally and structurally elaborate than ever before,” he said about the progression of the method. “But that also comes with tighter tolerances and shorter schedules from owners. Every project now is considered fast-track.”
Hawk alluded to mega-projects in San Francisco such as the Transbay Transit Center and its neighboring Salesforce Tower, along with big arenas such as the Chase Center and 181 Fremont Tower, for which his firm recently completed electrical work.
“That’s all just to say that projects are getting bigger, taller and more sophisticated, and many of those owners and developers are turning to design-build,” he said, echoing what other owners and practitioners stressed throughout the event.
Clark Construction Group Senior Vice President Philip Sheridan took it a step further and provided a clear example of a “great design-build success story.” His team’s progressive design-build delivery of CSX Transportation’s Virginia Avenue Tunnel reconstruction in Washington D.C., set to conclude its 7-year journey this month, represents the largest Class 1 railroad project delivered by the method at a total spend of about $300 million.
What’s more, Sheridan emphasized in a comprehensive case study on the project, was that it was delivered ahead of schedule and cost targets with contingencies to spare — all without major headaches or hang-ups through a tangled web of NEPA approvals and mitigation, community concerns about the site’s location in a dense urban environment, requirement of more than 300 permits and complex and consistent coordination with both the private owner and the District Department of Transportation, the Federal Highway Administration and other public agencies.
But while the application of design-build contracts to bigger and more sophisticated projects is certainly a trend, the inverse is true as well, said Larry Hurley, president of H2 Consultants and moderator of a panel on the future of the industry.
Whereas owners wouldn’t even consider the method for transportation projects under $20 million some years ago due to the complexity and risks involved, successful projects are meaning that smaller and smaller jobs fit the bill. Now, projects as low as $5 million are being considered for those types of projects in the same way they are for less-involved commercial projects. Design-build spending is increasing from both ends of the spectrum, meaning large dollar amounts and larger volume of smaller jobs, the panel concurred.
And it’s becoming increasingly challenging for all involved. “The increase in sophistication comes not just in the design phase with modeling, but also the construction phase,” Hawk continued. “There’s a move towards more prefabrication of building elements and pre-manufacturing of components, and part of that is to make things more efficient.”
There’s also a lot more code and regulatory compliance to follow, he continued. “Anytime there’s a fire or a failure there’s going to be new safety requirements and new codes in structural design. Builders have to get through that and understand it and have to adapt to it if they are going to play in that space.”
Seeing all practitioners through those challenges, he pressed, are two main touch points: teamwork and technology, which, he added, often go hand-in-glove.
Design-build is about ‘having the right people on the bus’
Teamwork, clear communication and attitude are the most important factors for success in the design-build process, starting with day one and especially in the preconstruction stages — that was another booming message from all players speaking at the event and on the sidelines.
Kunnath, sharing his wisdom from decades in the field, named those as the most important factors for the next generation to adopt. “It’s not only about cost and schedule, but the extent to which you embrace and understand and extract maximum value from each other. It’s the power of doing that and learning how to break down those barriers. It changes everything, especially the results.” Heard first in the discussion with the founders and then in echoes from other big players, the idiom of “having the right people on the bus” rang through the halls of the Ernest N. Morial Convention Center all week.
That means getting the right superintendents, foreman, estimators and other players involved on the job as soon as possible, Hawk said, and more importantly, getting subcontractors involved early. Hawk said he believes that having commitment and consistent dedication and involvement from all the right players early on is the single greatest way to improve outcomes.
Tech as the facilitator of design-build wins
How is that best done? Hawk pointed to technology, and for design-build practitioners, particularly BIM. “The use of technology is a huge deal these days,” he said, providing at least half a dozen examples of software, including Revizto and Bluebeam, for example, that members of a recent project meeting he attended recommended. “There are a ton out there, and you’ve got to analyze and choose which to use at the very start.
“Part of the increased adoption has to do with higher expectations on communications,” he said, noting that while being present in meetings is extremely important, having everyone on the same page with technology and digital communication is right there with it.
“BIM is a big part of preconstruction and it’s getting bigger. [Rosendin’s] BIM department four years ago was about 50 people. Now, it’s around 180 people. We are not at the point where we would do a BIM model on a project if its not part of the contract — though it is a requirement on most all projects now — but we are very close to seeing great savings and benefits that come out of a BIM model, and it’s very close to paying for itself now.”
The panel looking forward to the next 25 years recalled how some of the best-performing projects they’ve been a part of involved co-location with up to as many as 300 stakeholders representing designers, contractors, field operators, owners and more empowered decision-makers. “We’re not talking about two separate buildings in an office park with a shared parking lot,” Hurley remarked. “We’re talking about having everyone face-to-face and communicating.” That’s not always possible in today’s age, the panel lamented, but when it’s not, the next best facilitator of the relationship culture that fuels successful design-build project is technology, they concluded.