Photo courtesy of CDM Smith

Special DeliveryCDM Smith and PC Construction are the design-build team on the $210-million Blue Plains advanced water treatment plant, including a new biosolids-processing main process train, for the District of Columbia Water and Sewer Authority.

The prolonged recession hit the industry hard over the past few years. But for firms offering alternative project delivery, the recession took an additional toll. Many owners, seeing designers and contractors scrambling for work, decided to forego alternative project delivery in favor of hard-bid design-bid-build, believing it was the best way to get rock-bottom prices for projects.

Now, as the market is improving, many owners are absorbing some hard-won lessons from the recession. One is that disregarding the benefits of alternative project delivery to seek savings with a hard-bid, design-bid-build approach often costs more in the long run.

The result is a resurgence of work delivered by design-build and construction management-at-risk. The results from this year's ENR Top 100 CM-at-Risk (CMR) and Top 100 Design-Build Firms lists show this increase in interest in alternative project delivery. For example, the Top 100 CM-at-Risk firms had a combined revenue from CMR of $96.84 billion in 2013, up 5.8% from the $91.51 billion reported by the group in 2012.

The stirring of the buildings market in the U.S. has much to do with this increase. Domestic CMR revenue rose by 9.8% in 2013 to $77.83 billion. This increase comes on top of the 10.4% increase in domestic CMR revenue in 2011. CMR revenue from international projects in 2013 fell by a 7.9% to $19.01 billion.

For firms providing design-build services, the numbers also were up in 2013. The ENR Top 100 Design-Build Firms had combined revenue from design-build projects of a record $108.79 billion in 2013, up 4.7% from the $103.89 billion in 2012.

Most of the growth in design-build in 2013 was on the domestic side. The Top 100 Design-Build Firms saw their combined domestic revenue rise 7.7% to $60.92 billion in 2013. This is the third straight year of domestic gains for the Top 100. However, the 2013 total still is shy of the record $64.42 billion in domestic design-build revenue in 2008.

Design-build revenue on the international side also saw gains. Revenue from design-build projects from outside the U.S. rose 1.1% in 2013 to $47.87 billion for the Top 100.

Pass the Aspirin

The domestic gains in alternative project delivery reflect a growing overall market but also show a return to a more flexible approach to project delivery. Some in the industry say the use of hard-bid design-bid-build in search of the lowest prices during the height of the recession backfired on many owners.

"There were a lot of owners that thought they would save money on initial bids by going the design-bid-build route and some of them doubtless did save some up-front costs," says Jim Whitaker, principal for Dallas-based architectural firm HKS and this year's board chairman of the Design-Build Institute of America (DBIA), Washington, D.C. "Any savings were enough to buy plenty of aspirins for all the headaches many owners experienced from poor performance, change orders and schedule problems from using a less efficient project delivery system," he says.