Common Delivery Methods in Construction - In Simple Terms
What is a delivery method? The delivery method is the term to describe how a construction project will be "delivered" to the Owner. When someone or some entity has an idea for a construction project, they aren't limited to just "design-bid-build". Instead, an Owner has a number of different options such as hiring a General Contractor early on in the design phase to allow the General Contractor, in partnership with the designer, to work together on the design of the project and then build the project once the design is complete.
Many types of delivery methods exist, and I'm sure there will be more in the future as construction evolves. This article is intended to give an overview of the three most popular delivery methods: design-bid-build, design-build, and construction manager at risk.
Let's take a minute to talk about "the birds and the bees" of how a construction project comes to life.
It's a beautiful miracle, and it will help us identify the key players and how they relate to one another in each type of delivery method.
A construction project begins with a dream.....That's right! Anyone can have a dream!
That dream might be to build a project that looks something like this:
- I want to build a house!
- I want to add a spare bedroom downstairs!
- I want to pull the roof off of my house so that I can watch the planes as they go by!
- I want to build a hospital!
- I want to dig a big pit in my backyard to throw my old childhood relics in!
Anything can be a project. But once you have the idea in your mind, there is a consistent process to follow to get your project through design and onto construction!
Say for instance you want to build a granny cottage in your backyard.
You'll first want to hire someone to design that granny cottage and make sure that it not only meets your needs, but complies with local building codes.
The designer (which consists of an architect and an engineer), will provide the design to you so that you can take that design and go hire a General Contractor to build the project. A good rule of thumb is to get bids from several different Contractors before hiring one to compare pricing and qualifications. On larger projects, this is called an "RFP" or Request for Proposal. You as the Owner will invite qualifying General Contractors who meet your criteria to bid on the project. This is referred to as the "Bid Phase". The RFP goes out, and a period of time will pass for the bidding Contractors to get questions answered about the project to help them formulate a price. Once all the bids are received and you as the Owner choose the person you want to hire, you'll award the victorious Contractor the project to build the job.
What I just described is one type of delivery method called "Design-Bid-Build".
You can see above that there are four major entities on a design-bid-build project: The Owner, the designer, the General Contractor, and the General Contractor's various subcontractors. There are different contracts between each party in this scenario: one contract between the Owner and the Designer. A separate contract between the Owner and the General Contractor. And separate contracts between the GC and each subcontractor.
The timeline for the design-bid-build process looks like this:
As you can see, there is no overlap between phases in this delivery method. As a result, this method takes the most time between when you retain a designer to the time that you take occupancy of the project.
Construction Manager at Risk (CMAR)
In this scenario, all of the parties stay the same except the General Contractor is now referred to as a "Construction Manager" during the design phase. The Owner hires the Construction Manager during the design phase to allow the Designer and the Construction Manager to hopefully resolve any major issues during the design. The Construction Manager (aka, General Contractor) will have input on the design based on their own experience and how they plan to build the project.
Again, in this scenario, there are still two separate contracts: one contract between the Owner and the Designer and a separate contract between the Owner and the General Contractor.
Ideally, this results in more collaboration throughout the project as there is an established relationship early on between the Designer and the GC. Also, the overall project duration is reduced due to not having to go through the bid phase and hire a General Contractor.
In this scenario, the Owner does not have a contract with the designer. Instead, there is only one contract between the Owner and a "Design-Build" firm. The design-build firm now has ownership of the design and construction of the project. This method has the potential of reducing the amount of claims on a project since the design and construction phases are both owned by the same entity.
Additionally, the overall project duration is often reduced for similar reasons that the CMAR delivery method is reduced: The Designer and the Contractor are working together throughout the design phase. However, in this case, the Designer and the Contractor are both the same entity.
In this article we reviewed the most popular delivery methods which include: design-bid-build, construction manager at risk, and design-build. There are many other delivery methods and perhaps I'll do an article in the future on some of the other ones. But this will at least give a general overview of the most popular along with the key players involved.