On track to account for $1.19 trillion in construction spending through 2021, design-build presents opportunities and challenges for the engineering and construction (E&C) industry. More agencies are adopting the design-build model; alternative project delivery methods have become a more frequent option for public and private owners; and growing support for design-build legislation has further increased this delivery method’s popularity. Combined with other factors, these trends are pushing more E&C firms to get involved with design-build projects.

Today, design-build is being used by private and public sector project owners as a way to keep projects moving forward, on time and within budget—and all with as little friction as possible. According to FMI’s “2018 Design-Build Utilization” report, for example, the project delivery method will comprise 44% of construction spending between 2018 and 2021, during which time such construction spending will grow by 18% and reach more than $320 billion.

Six Things to Know

As design-build continues to gain traction, here are six things all construction firms should keep in mind:

1. It’s a way of reducing the design and construction cycles. Design-build differs from the traditional design-bid-build approach, whereby project owners outsource the design work to an architectural/engineering firm on a negotiated-price basis and then contract out construction services on a low-bid basis. These and other project delivery systems may not only introduce inefficiencies during the contracting process, but also miss some of the opportunities provided by design-build when implemented correctly, including increased use of innovative ideas from the private sector and an overall reduction in the design and construction cycle.
2. Large project owners love it. According to the survey, owners extract significant value from design-build when the delivery method is used on large, complex projects. Experience with design-build was rated highest across all project delivery methods, with 76% reporting very good and excellent experiences, according to the survey. Opportunities to innovate and the ability to fast-track a project were identified as top benefits associated with design-build. Cumulatively, these projects allowed for greater opportunity to provide project innovations and subsequent cost savings.
3. There are some clear opportunity areas for construction. Of the various customer segments that use design-build, manufacturing, highway/street, and education will represent the greatest percentage of design-build construction spending over the next three years. Geographically speaking, the mountain (6.3%), Pacific (6.1%), and south Atlantic (6.2%) census divisions will yield the highest growth rates between 2018 and 2021.
4. Project owners want alternatives like design-build. As owner needs and project demands have changed, owners have increasingly opted to employ alternative delivery methods based on specific project factors. Overall, owners receive significant value from design-build when the approach is employed on larger and more complex projects. These projects allow for greater opportunity to provide project innovations and subsequent cost savings. In addition to larger and more complex projects, design-build use continues to expand into projects of less than $25 million, as owners continue to learn of the benefits of design-build.
5. Even the most promising design-build projects can get sidelined. With design-build, owners’ use of a new alternative delivery system purely for procurement purposes—and without aligning the decision-making/approval processes in the organization to meet the schedule needs—can set up a project for failure. Misaligned expectations between the owner and design-builder regarding the level of control that the owner’s team retains over design decisions can also derail a project. In some cases, design-builders went into the design phase assuming they would have more influence over design decisions than they actually wound up having. This is particularly prevalent with structural issues where calculations, recalculations and constructability approaches were frequently debated.
6. The industry is learning how to manage these challenges. As design-build’s popularity has increased, the educational process associated with this delivery method has also expanded. A sustained emphasis toward educating owners and project stakeholders on the process and benefits associated with design-build, for example, has facilitated continued adoption and greater utilization industry-wide. On the public side, increased design-build legislation has further helped push the adoption of such projects. For private customers, owners tend to select design-build for unique and challenging projects that require lots of collaboration.

In addition to larger and more complex projects, design-build continues to expand into project sizes of less than $25 million as owners continue to gain exposure to the benefits of the delivery method. As design-build continues to mature and gain in popularity, expect to see even more successful outcomes and high success rates for this extremely collaborative and versatile project delivery model.