One project delivery model came to light at a time when several owners, consultants, and contractors were facing cost and schedule fluctuations due to the COVID-19 pandemic – Progressive Design Build. PDB arose as a response to several challenges and limitations of traditional project delivery methods such as Design-Bid-Build and Design-Build. It has been gaining in popularity as an alternative to help provide more realistic schedules and cost structures for projects and to keep the financial risk reasonable for all parties.
In this blog, we will explore the meaning of PDB delivery method, how it works, its benefits and drawbacks, and in what ways it differs from traditional DB practices.
Table of Contents
Progressive Design Build Definition
Progressive Design Build (PDB) is a version of Design-Build project delivery method. In PDB, the owner hires the team through one step, qualifications-based selection (QBS), and then “progresses” towards a design and contract price with the team (thus the term “Progressive”). Meaning, the design-builder’s project cost/price and schedule commitment are not considered part of the selection process. Instead, after the project design is 50 to 75% complete, the design-builder issues a Guaranteed Maximum Price (GMP). The team must work within budgetary restraints under a “cost-plus” contract.
How PDB Works
This increasingly popular delivery method is a hybrid between traditional Design-Bid-Build and Design-Build approaches. Under a single contract, the owner retains the design and construction team at the earliest possible stage of the project, in some cases, even before design development. This early partnership of single-point Design-Build promotes maximum collaboration between the owner, the designer, and the contractor.
As the project progresses, the design team develops solutions and the construction team provides input on the constructability and cost of the design, with the owner giving feedback throughout the process. Simultaneously working like this enables the team to identify and mitigate potential issues early in the process. It also allows the owner to make informed decisions about the project scope, schedule, and budget.
The ultimate goal of Progressive Design Build is to foster a collaborative, streamlined, and cost-efficient project delivery approach, which results in a superior quality end product.
Progressive Design Build Process
Below is the step-by-step breakdown of the PDB Process:
Request for Qualifications (RFQ)
The owner selects the design-builder through a Request for Qualifications (RFQ). The primary driver of this process is not price competition on the overall Design-Build contract price, but instead, on the value the contractor can provide. Once the design-builder is finalized, the design-builder delivers the project in two distinct phases.
Request for Proposal (RFP)
Though a one-step process is ideal for QBS, a two-step process works more suitably for complex projects or best-value selection. Proposers spend more time and resources responding with detailed technical proposals and owners can thoroughly evaluate these proposals. The first step of the process focuses on shortlisting three most-qualified teams, primarily based on qualifications and past performance, key trade partners, and resumes of key personnel. The second step entails the submission of technical proposals, with the proposals helping the owner in awarding the contract to the right team.
Phase 1 – Preconstruction Services
First is the Preconstruction Services stage, whereby the design-builder works with the owner and its consultants to create the project’s basis of design, and then develops it. Decisions are based on cost, schedule, operability, life cycle, and other factors, with the design-builder providing ongoing, transparent cost estimates to follow the owner’s budgetary requirements. When the design has been appropriately defined pertaining to the owner’s needs, the contractor will offer a formal commercial proposal for Phase 2 services.
Phase 2 – Final Design and Construction Services
Phase 2 begins once the owner and contractor negotiate commercial terms (including price and timeline). This is often referred to as the Final Design and Construction Services stage. This phase usually includes testing, commissioning, and any other related services that may have been negotiated in the agreement.
Off-Ramp
According to the Design Build Institute of America, if, for any reason, the parties cannot reach an agreement on Phase 2 commercial terms, then the owner may exercise right to “off-ramp”, where it can take the design and move forward with the project through a design-bid-build procurement, with another design-builder, or any other method it deems appropriate.
Progressive Design Build Pros and Cons
Progressive Design Build Pros and ConsPDB is increasingly gaining popularity and traction because of its collaborative benefits. However, it comes with certain disadvantages, too. Here are all the major pros and cons associated with PDB.
Pros –
1. Single Point of Accountability
There are multiple project risks associated with design, building permits, procurement of materials and equipment, schedule, cost, construction warranty, and professional liability. Since PDB creates a unified contract, the Design-Build contractor becomes the single point of accountability. Contracting with a single entity rather than multiple direct owner contracts prevents disputes, leaving no chance for “blame game” in a project.
2. Increases Owner’s Control
A PDB delivery gives the owner the opportunity to make value-based decisions early in the project process. The owner can participate in the selection of subcontractors, consider preferred firms, and review their quotes with full transparency. As contractor, designer, subcontractors, and other trade partners are present at the same table, “open book accounting” takes place. In short, Progressive Design Build gives the owner greater control over the design and budget. Interestingly, PDB offers one major differentiator – it appropriately transfers risk away from the owner.
3. Shortens Schedule
For a PDB model, design consultants do not have to waste time and money submitting a solution that is 30% or more complete as part of the RFP response. Project owners save time by not having to prepare and evaluate submittals. This significantly shortens the procurement cycle. Also, the owner doesn’t need to provide honorarium payments since the work won’t happen until the PCS stage. Under this model, the owner pays only the selected company for their design and PCS.
4. Reduces Budget
In Progressive Design Build, the main contractor and designer participate in the design process early and recommend most cost-effective systems, materials, and construction methods. Only when the design reaches 50-70% completion do the parties negotiate a GMP. Hence, PDB minimizes the risks of change orders, given that the owner does not change the scope once GMP is fixed.
5. Flexibility and Collaboration in Design and Construction
PDB fosters a collaborative environment where everyone’s expertise and ideas can be integrated into the project. For example, if the construction team discovers that a certain design element is not feasible, they can provide feedback to the design team to adjust the design. This flexibility allows for a more responsive approach to project delivery, resulting in a more successful project that meets the owner’s needs.
6. High-Quality Services
Since there is no requirement for design submission as part of the RFP response, more contractors compete to win the contract, thereby increasing the quality and quantity of the competition. PDB is characterized by a qualifications-based procurement process. The owner issues a Request for Qualifications (RFQ) and selects the Design-Build contractor based on their qualifications and past projects. As the company is selected based on qualifications and not bid price, it ensures delivery of the highest possible value.
Cons –
1. No Bidding Process
PDB requires the owner to prioritize the qualifications of the design-builder over the price competition for the overall contract. However, some owners may find it politically impractical or inappropriate to award a construction contract without full-price competition and may feel uneasy negotiating the commercial terms of the arrangement.
2. Hesitancy in Off-Ramping
In case the parties cannot reach commercial agreement on the design-builder’s proposal, owners may be uncomfortable in exercising the “off-ramp”. If the owner has invested significant time and resources in the project and has developed a strong working relationship with the design-builder, they may be hesitant to exit the project. Off-ramping may also lead to financial and legal penalties.
3. Unfamiliar Project Delivery Method
The PDB model is relatively new than other tried and tested project delivery models. For this reason, there may be a lack of interest in changing approaches. Owners may still prefer the traditional, best-value DB process rather than taking risks with the unfamiliar PDB method.
Progressive Design Build vs Design Build
| Design Build | Progressive Design Build |
|---|---|
| Price-Based Selection | Qualifications-Based Selection |
| Introduces Design-Builder after developing basis of design | Introduces Design-Builder at early stage, works with owner to create design basis |
| Owner makes decisions based on documents and consultant input | Owner makes value-based decisions supported by builder’s cost and schedule models |
| Limited collaboration | Fosters Collaborative Environment early in the project |
| Owners are not involved in procurement and selection of subcontractors | Owners can choose to be actively involved in subcontractor procurement and selection |
| Lump-Sum Price Proposal | Open-Book Accounting |
| Easier Off-Ramping | Riskier Off-Ramping |
| Owner retains Spearin liability | Transfers risk from owner to Design-Builder |
| Susceptible to Change Orders | Guaranteed Maximum Price (GMP) ensures Cost Reliability |
The table mentions the key differences between the traditional delivery method of Fixed-Price DB and PDB.
Conclusion
In comparison to traditional fixed-price DB delivery, Progressive Design Build offers owners valuable advantages in handling construction risk and often results in greater cost and time savings. Considering the solutions it provides in current market conditions, it’s no surprise that PDB is gaining popularity.
Like any project delivery method, there are preferred circ*mstances where PDB is appropriate. However, this single-point method has a unique ability to drive enhanced collaboration between all parties involved. If you and your team are looking for a way to lower risk, work collaboratively, and fasten the procurement and early design process, Progressive Design Build might be the solution for you.
Contact us today and let Constructive Solutions, Inc. share the responsibility of managing your next building project.
FAQs
How is PDB different from Design-Bid-Build (DBB)?
In DBB, the owner selects an architect to complete the design, and then a contractor is selected through a competitive bidding process. While in PDB, the design-builder is selected before the design is complete.
Who is responsible for the design in PDB?
Although the design-builder is responsible for the design, the owner reviews and approves it.
What types of projects are suitable for PDB?
PDB is suitable for complex or large-scale projects and projects with tight schedules. It is also suitable for projects where collaboration is critical and the owner wants a high level of control.
Relevant Resources:
- The Benefits of Construction Manager/General Contractor Services (CMGC) versus Design-Build Project Delivery
- Here are 10 Important Lessons Learned from Challenging Design-Build Projects
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Author:Rami Tawasha
https://www.solutionsgc.com/
A highly motivated and experienced civil engineer with more than 20 years in the construction industry, Rami Tawasha serves as a senior project manager at Constructive Solutions, Inc., a commercial general contractor based in San Mateo, San Jose and San Francisco. Proficient in a broad range of services from design-build and seismic retrofit to tenant improvement and renovation for corporate offices, medical facilities, industrial, hospitality centers, and retail spaces across the San Francisco Bay Area.
