Butler Cohen served as Construction Manager at-Risk to construct a new ground-up K-8 campus for charter school operator Academica in Austin, Texas. | Photo Credit (all): Courtesy of Butler Cohen听
By听Jason Permenter听
Design-Bid-Build, commonly referred to in the construction industry as a 鈥渉ard bid鈥� project, refers to the construction delivery method commonly听utilized听by听school听districts and other education providers, in which the design team is hired directly the听owner.听听
The common听perception听is that once this delivery method听is chosen,听that鈥檚听it.听The听project’s fate is sealed, and听once design and bidding are complete,听the听owner is听stuck with the bids they receive, irrespective of their project budget,听and听with a limited ability at that point to cut cost听overruns or meet aggressive schedule expectations. However,听for owners that have already听chosen this delivery method for听a听project,听all is not lost.听The听careful听selection听of a听general听contractor听that听will听work collaboratively听with the听owner and design听team can help rescue the project,听delivering听effective solutions to improve听budget and schedule听outcomes.听
Understanding the听Design-Bid-Bid Process听
Owners commonly choose the Design-Bid-Build process for听a number of听reasons.听The attractiveness of competitive pricing is听perhaps the听biggest driver, along with a听perception听of budget certainty;听or,听maybe that听is simply how听a school听district or education provider has always done things.听
In the Design-Bid-Build听process, the design team, typically consisting of a听lead听architect and a team of design consultants and engineers,听works with the听owner to听program and听develop a detailed set of plans and specifications for the project through a series of design phases. Typical phases include programming, schematic design, design development,听and finally,听construction documents.听
Upon completion听of detailed design, the听architect or听owner鈥檚听representative will听solicit听competitive sealed proposals from听general听contractors听leading to 鈥渉ard bid鈥澨齦ump-sum听responses from听general听contractors. These responses are typically ranked by fee,听with the qualified bidder听that听submits听the lowest number听winning the project.听The process seems simple enough, but there are听a number of听challenges and pitfalls for the savvy听owner to be aware of.听听
Common Challenges with Hard-Bid Projects听
The primary challenge with a hard-bid project听is that the bid only applies to exactly what is included in the plans and specifications. Items not captured can include scope gaps or missing scope, unforeseen conditions听or听additional听scope not captured in the original design.听These items will lead to the dreaded听change听order,听typically increasing the total contract.听This听can create an听adversarial听relationship听between听the听owner,听architect, and听contractor,听and听also听create risk for significant听schedule听delay and cost overrun.听听听听
Compounding this challenge,听owners may find that, once all bids are received, they are already significantly beyond the planned project budget.听At this stage, they may feel like there is limited ability to get the project back on budget now that they are 鈥渓ocked in鈥� to a completed set of plans they听can鈥檛听afford.听
Owners may also have concerns with听quality, safety, and financial capability听of a 鈥渓ow-bid鈥澨齝ontractor,听which may add听additional听risk to the project听they are uncomfortable with.听
How听Butler Cohen听Resolves Hard Bid Challenges/Value Engineering听
As a Texas-based听general听contractor,听Butler Cohen听faces this challenge听frequently:听the听firm has听been awarded the project, but听the听owner鈥檚听budget听is significantly below our winning bid. Due to our firm鈥檚 deep experience听with alternative delivery methods,听including Design-Build, we听are able to听rapidly听integrate our听preconstruction team听and other in-house resources听into the existing project team,听establishing听open lines of communication between the听owner,听architect听and听contractor.听
We听utilize听proactive problem-solving and change management strategies,听leveraging听our听expertise听in value engineering and cost control听to trim the fat while still delivering a high-quality and functional facility that meets the听owner鈥檚 project vision.听At the same time, we听exercise听our听subcontractor network to听identify听potential cost savings strategies听and alternatives.听
Read the full article, including a case study on successful intervention for private school expansion, in the .
Jason Permenter is Pre-Development Manager for Butler Cohen.听