Design Bid Build (DBB) Versus Construction Management at Risk (CMAR): Analytical Essay

Introduction:

The construction industry is one of the most important industries in the global economy. According to AGC (2018), the construction industry has 7,242,000 employees, and the hourly wage is $29.86. Moreover, human civilization highly relies on construction efforts. Since construction industry plays crucial role in economic growth and human civilization, the industry has been receiving many techniques, practices, and technologies in order to improve it in many aspects such as cost, time, and quality. One of the main methods that is being developed is project delivery method.

What is Project Delivery Method?

“The comprehensive process of assigning contractual responsibilities for designing and constructing a project, which should include the definitions of project scope, contractual responsibilities, interrelationships of the parties, and the processes for managing time, cost, safety, and quality” (Carpenter and Bausman 2018). Project delivery method has different types of methods such as Design Bid build (DBB), Design Build (DB), and Construction Management at Risk. These delivery methods have been targeted by many construction discussions and studies due to the fact that the huge impacts that these methods have on construction projects. In this research, Design Bid Build and Construction Management at Risk will be the subjects.

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What is Design Bid Build?

According to DBIA (2015), DBB is the traditional project delivery method which includes three project phases: The design phase, which will be led by a designer; bid phase, when contractors submit their bids and the owner chooses the most responsive and responsible bid; and construction phase. In this method, there are three main parts which are owner, designer, and the contractor. The designer is selected based on demonstrated ability and should help to convert the owner’s ideas to design. In addition, the designer is responsible to prepare the drawings, specifications, and contracts. Contractor’s responsibility is to deliver projects within cost, time, and quality by managing the project activity including the subcontractors’ portions. Owner is responsible to determine their needs, prepare the financing and select the designer and contractor.

What is Construction Management at Risk?

“This delivery method entails a commitment by the CMR for construction performance to deliver the project within a defined schedule and price, either a fixed lump sum or a guaranteed maximum price (GMP), and the CMR provides construction input to the owner during the design phases and becomes the general contractor during the construction phase” (DBIA 2015). GMP cannot be increased unless the owner or designer changes the scope. Furthermore, “the defining characteristics of this project delivery method are as follows: the design and construction are separate contracts: owner to architect, owner to CM at Risk; and the total construction cost is not a factor in the final selection of the constructor” (Carpenter and Bausman 2014).

The Purpose:

1. The main purpose of the is to address the difference between Construction Management at Risk and Design Bid Build in cost, schedule and quality, and identify which one of these methods can provide better performance.
2. The comparison
3. The comparison will be about the main keys to measure the success of projects which are schedule, cost and quality. The comparison included both public and private projects.

The Cost:

It is believed by people who support the Construction Management at Risk method that CM at Risk lead us to reduce the cost of the construction projects compared to Design-Bid-Build method. However, “the analysis performed in terms of cost performance for construction of public schools revealed that projects constructed using the DBB method significantly outperformed those constructed with the CM at Risk method across all cost metrics” (Carpenter and Bausman 2014). The comparison included the original construction, final construct cost, original project cost, final project cost unite cost, student cost, construction cost growth and project cost growth. The difference can be seen clearly in Table 1

Table 1 (Carpenter and Bausman 2014).

According to Carpenter and Bausman (2014), the same findings were observed by article writer in Florida and North Carolina states. In Florida, the mean design fee in Construction Management at Risk projects was 7.3% more than the Design-Bid-Build projects and the CM at Risk projects showed a remarkable difference by $503.77/m2 and $5,446.80/student higher than the school projects that were based on DBB method in North Carolina (Carpenter and Bausman 2014). One of the main measurements that were used in this study was unit cost. Unite cost represented the dollars per m2. In Carpenter and Bausman’s study, CM at Risk projects costed $43/m2 more than DBB projects. In addition, CM at Risk was significantly higher than DBB in the final construction cost by abound 23%, although CM at Risk projects had less construction and project cost growth than DDB projects. According Rojas and Kell (2008), a similar result was found which indicated that CM at Risk projects had lower cost growth than DBB projects. However, change orders should be considered when the cost of CM at Risk and DBB are compared.

Change Orders:

A change order is to add or eliminate work without changing the scope of the project. It is considered that minimizing the change orders is an advantage for CM at Risk, and this advantage can lead to reduce the cost of change orders. Moreover, the supporters of CM at Risk see that change orders are one of the main reasons that make DBB cost more than CM at Risk. However, “No statistically significant difference between construction manager at risk and design-bid-build in change order costs (Rojas and Kell 2008)” (Grade 2018). That means that CM at Risk did not clearly outperformed DBB method.

The Schedule:

The biggest question when CM at Risk is being considered is that Do early contributions and collaborative properties lead CM at Risk to outperform DBB method in schedule performance? According to Sullivan, El Asmer, Chalhoub and Obied (2017), DDB was significantly higher than CM at Risk in schedule growth by 8.2%. The schedule growth represented the difference between planned duration and actual duration. Table 2 and Figure 1 represent this result which was based on around 1300 projects and 18 studies. This difference can be seen in and Figure 1.

Table 2 (Sullivan, El Asmer, Chalhoub, and Obied 2017).

Figure 1 (Sullivan, El Asmer, Chalhoub and Obied 2017).

Furthermore, similar result was reached by Ibrahim, Hanna, and Kievet (2018). Ibrahim, Hanna, and Kievet (2018) noticed that DDB had higher schedule growth than any other delivery methods include CM at Risk. In addition, delivery speed is one of the motivations for the owner to avoid DBB in order to decrease the overall time, but Sullivan, El Asmer, Chalhoub, and Obied (2017) found that there was no remarkable difference between CM at Risk DDB in delivery speed. However, “the analysis indicated no significant schedule performance differences between the public-school projects constructed with the CM at Risk and DBB project delivery methods” (Carpenter and Bausman 2014). Even though their study was just about public school projects, these projects can be used to measure the difference in performance between CM at Risk and DBB. The result if this study is shown in Table 3.

Table 3 (Carpenter and Bausman 2014).

Carpenter and Bausman (2014) noticed that CM at Risk leads to have better schedule predictability. In addition, the productivity for both methods can be measured by using the project intensity from Table 3. Project intensity is defined as the accomplished meters per day. Based on Table 5, there is no remarkable difference in the productivity, which is 14,18 in CM at Risk and 14.74 In DDB even though the cost of CM at Risk is higher than DBB cost by almost $6,000,000. According to Carpenter and Bausman (2014), the same results were found when construction intensity, which is based on construction schedule instead of project schedule, was applied.

The Quality:

Quality in many cases is the main driver for the owner satisfaction, and poor quality can lead to many negative impacts. To measure the quality performance the satisfaction of the owners or stakeholders can be used. However, “quality performance, by definition, is difficult to compare to any of the delivery methods because of the lack of a unified measuring system” (Sullivan, El Asmer, Chalhoub and Obied 2017). Some researches such as Carpenter and Bausman (2014) relied on the owner’s satisfaction in order to measure the quality performance. According to Carpenter and Bausman (2014), CM at Risk showed higher performance than DDB in all areas of product quality, which were construction product quality, construction team service quality, design team quality, project team service quality, disputes and claim, warranty and call back and service quality and readiness.

• Owner satisfaction with construction product quality is presented in Table 4. It is clearly seen from Table 4 that there was a significant difference between CM at Risk and DBB in all sections, especially in the building interior and building exterior sections, and CM at Risk highly achieved the satisfaction of the owners.

Table 4 (Carpenter and Bausman 2014).

• Owner Satisfaction with Construction Team Service Quality is given in Table 5 which is shown that CM at Risk highly outperformed DBB in many sections. Schedule control and quality control achieved the highest difference by 10.66 and 9.52 respectively.

Table 5 (Carpenter and Bausman 2014).

• Owner satisfaction with design team service quality is shown in Table 6 which indicates that was the difference between CM at Risk and DBB in all areas, but the difference was significant in complete documents and clearly define areas. Surprisingly, communication was not from the highest three areas in CM at Risk even though communication is considered as one of the main advantages for CM at Risk especially during the design phase

Table 6 (Carpenter and Bausman 2014).

• Owner satisfaction with project Team service quality is presented in Table 7. CM at Risk was better than DBB especially collaboration which is not surprising find due to the fact CM at Risk depends basically on involving more collaboration in projects.

Table 7 (Carpenter and Bausman 2014).

• Owner reported (%) disputes and claims is seen in Table 8. According Carpenter and Bausman (2014), enough date was not reached because there was not large numbers of claims and disputes. Therefore, there is no a clear indication based on this area.

Table 8 (Carpenter and Bausman 2014).

• Table 9 shows warranty and callback Issues and associated costs. According to Carpenter and Bausman (2014), even though CM at Risk had issues more than DBB, CM at Risk showed better cost control of the issues. This difference is clear between the issues that costed more than $5000 in DDB and CM at Risk.

Table 9 (Carpenter and Bausman 2014).

• Service Quality and Readiness (Days) is given in Table 10. Table 10 indicates that CM at Risk was better than DDB in readiness by 9.93%. The readiness of CM at Risk projects were almost 35 days earlier than DBB projects.

Table 10 (Carpenter and Bausman 2014).

In addition, Ibrahim, Hanna, and Kievet (2018) reached similar results by using a scale of 1 to 5 to measure the quality of delivery methods. Ibrahim, Hanna, and Kievet (2018) reported that CM at Risk significantly outperformed DBB. That is seen in Figur 2. Based on the abstract of Ibrahim, Hanna, and Kievet (2018), CM in Figur 2 represents CM at Risk method.

Figure 2 (Ibrahim, Hanna and Kievet 2018)

Conclusion and Recommendations

The purpose of this research was to address the difference between Construction Management at Risk method and Design-Bid-Build in cost, schedule, and quality and identify which one of these methods can provide better performance in cost, schedule, and quality. This research has reached the following:

• DBB method was significantly better than CM at Risk in the cost performance. However, there was not a sigincant difference between CM at Risk and DBB in change order cost even though it is considered that reduction of change order cost is one of the benefits of CM at risk.
• There was a confliction between many studies about which method had the best schedule performance. Some studies such as El Asmer, Chalhoub, and Obied (2017) which showed CM at risk significantly outperformed DBB in the schedule growth. On the other hand, other studies such as Carpenter and Bausman (2014) revealed that there was not a significant difference between CM at Risk and DBB in schedule performance. In general, even though all these studies agreed that CM at risk performed better than DBB, some of these studies did not agree that CM at Risk was significantly better than DDB.
• Design Bid Build method showed competitive productivity rate copmered to Constuction Management at Risk method.
• CM at Risk, highly controlled the cost of warranty and callback issues, even though it had higher numbers of issues than DBB.
• CM at Risk showed high outperformence in the quality performance. Many studies reached similar findings which were that the quality performance of CM at Risk was significantly better than DBB even though these studies faced some difficulties to measure the quality performance. They depended on either the owner satisfaction or a scale of 1 to 5. In general, CM at Risk leads to have higher quality and might improve the schedule performance in construction projects, but there was not a clear indication that it can lead to reduce cost.

Recommendations:

This research has shown that DBB is not bad as many people in construction industry believe. DBB can provide a very high level of cost performance and schedule performance, however, this method needs to be improved in the quality performance due to the fact that there was a huge gap between DDB and CM at Risk in the quality performance. Moreover, early contribution and collaboration are highly recommended for any delivery method because they clearly have positive impacts on the quality of projects. Based on the findings of the research, it is hard to define which is the best delivery methods between CM at Risk DBB, however, the owner or decision-maker is the only one who can define the most appropriate method for his/her project after considering the results of the is research. In addition, it is recommended to establish a unified measuring system for the quaily performance due to the fact it leads to have more accurate and evident comparison in the future studies.

References:

1. Carpenter, Noel. (2014). “Comparison of the Design-Bid-Build and Construction Manager at Risk Project Delivery Methods Utilized for the Construction of Public Schools”.
2. Sullivan, Jera., El Asmar, Mounir., Chalhoub, Jad., and Obeid, Hassan. (2017). “Two Decades of Performance Comparisons for Design-Build, Construction Manager at Risk, and Design-Bid-Build”.
3. Gade, Deepak Reddy. (2018). 'An Investigative Analysis of Skill Sets For Different Delivery Methods In The Building Industry'.
4. Rojas, Eddy M. and Kell, Ian. (2008). “Comparative Analysis of Project Delivery Systems Cost Performance in Pacific Northwest Public Schools”.
5. Ibrahim, Michael., Hanna, Awad., and Kievet, Dave. (2018). “Comparative Analysis between Project Delivery Systems through Quantitative Assessment of Project Performance”.
6. Design-Build Institute of America. (2015). “Choosing a Project Delivery Method”.
7. The Associated General Contractors of America, Inc. (2018). “Construction Employment Reaches 10-Year High as Industry Adds 19,000 Jobs in July and 303,000 for The Year; Industry Unemployment Sets Record Low”.