Guy Lawrence / ENR
Design-build continues to be a major presence in the construction landscape, as more owners search for efficiencies in the construction process. For ENR’s Top 100 Design-Build Firms, 2007 was a big year. The group generated $83.44 billion in revenue in 2007, up 21.2% from 2006. Domestically, the revenue figure was $53.75 billion, an increase of 19.7% over 2006, while international work, much of it from giant engineer procure-construct jobs, rose to $29.68 billion, up 24.1%.
“The Sword of Damocles is not the acceptance of design-build, but the economy,” says Walker Lee Evey, CEO of the Design-Build Institute of America, Washington, D.C. “In general, we are beginning to see the impact of a slowdown.” He says most firms have a strong backlog and new projects have only just slowed down, not stopped.
Pressure from owners to build more quickly and efficiently is leading to an increased reliance on design-build earlier in the process in many new sectors. “You can affect so much more in the planning phase, building in efficiencies and letting the owner know how its choices affect costs and schedules,” says Paul Tyler, president of the commercial group at The Haskell Co. “You can do that with just designers in the room, but having the contractor, subcontractors and suppliers there can avoid expensive value engineering and rework down the road.”
In the search for more efficiency, many design-build firms are embracing Building Information Modeling. “It’s the big design-build firms that are driving BIM, not the architect/engineers,” says Bob Clark, CEO of Clayco. He notes that BIM is expensive and takes a lot of training, but the firms that have tried it successfully don’t want to go back to the old system. “We purchase $40 million to $50 million in design services a year, and we look for designers who are experienced in BIM,” he says.
Escalating materials prices provide a strong argument for design- build. Hiring a designer first, then bidding to a contractor leaves the owner at the mercy of volatile materials prices down the line, says Tyler. “If you have a $10-million budget and hire a designer for $500,000, that $500,000 will be spent before you even have an idea of what the project will cost,” he says. With design-build, “you don’t have to wait until the wallpaper style is chosen before you break ground.”
The Dept. of Defense’s Base Realignment and Closure program has embraced design-build, leading to a fertile new market. “BRAC’s use of design-build has resulted in many firms getting exposed to design-build where they may not have done it in the past and they are finding they like it,” says Evey. But he says the federal adoption of design-build also has a wider impact. State and local agencies tend to follow the feds’ lead, causing more local agencies to try it out.
Local agencies in the water and wastewater sectors are an example of the public sector coming on board with design-build. “Water, sewer and wastewater projects generally are procured locally, and many of these municipal agencies have not built anything in years,” says Tyler. “It’s a big risk for an agency director who is used to maintaining facilities to suddenly have to go out and spend $25 million on a new project without guidance.” Haskell created a water/wastewater division five years ago not simply to design and build projects, but to assist municipal agencies in needs and costs assessments, and procuring grants.
One example of a market that is testing design-build is health care. “Health care hasn’t traditionally used design-build as they tended to plan out their facilities over an extended period of time,” says Tyler. He says health-care providers now are seeing increasing competition and are being forced to get their new facilities in operation quicker and more efficiently.
Evey is excited about DBIA’s certification program. “Three years ago, we had 87 people with DBIA after their names. It’s tough to argue to an owner to give qualification points for a certified design-build practitioner when there are only two or three in the entire state,” he says. Now, there are 500 certified practitioners with another 700 in the pipeline. “Now you are seeing qualification points given for certification,” he says.