Our colleague, Jérôme-Alexandre Soumastre, has managed capital projects and project teams for more than 20 years. He’s been thinking a lot lately about how to share what he’s learned about project management in a less formal way, including how to find process efficiencies, apply lessons learned, and identify the best approach to deliver on project owners’ goals.

As a result, he’s developed a series of articles – one of which we’re sharing here.

You can read more from Jérôme-Alexandre on LinkedIn or on Substack. And as a bonus, you’ll get to see pictures of his new puppy Gordon, who is also along for the ride!

Possibly the most classic of capital project delivery methods in North America (more on that later) and the method most people who work in the industry know best is Design-Bid-Build (DBB). It’s pretty straightforward and looks something like this:

  • Design: A project owner, through their trusted project manager (ideally me and my team!) hires a prime consultant. This could be an architect or an engineer (mechanical, electrical, and/or structural) or, more likely, all four working together. The prime consultant works with the owner (and their PM) to develop designs and drawings for tender.
  • Bid: The designs and drawings are tendered through a Request for Proposal (RFP), a Request for Quotation (RFQ), an existing Standing Offer Agreement (SOA) or some other method. The goal is to obtain a price, known as fixed or lump sum, to get the project built by a general contractor (GC).
  • Build: The GC builds the project using the designs and drawings.

So pretty easy stuff. You design it, get a price and get it built. It’s also, at least since I’ve been in the industry, the classic way to build something.

It can also be prone to a lot of issues.

This is where expectations and a ‘tried and true’ mentality meet modern reality. DBB is often seen by owners and some consultants as:

  • a great way to get price certainty when awarding to the GC.
  • the best way to make sure the owner gets exactly what they want in their building.
  • a proven way to get good designs ready and therefore save money on construction.

I could continue to go on, but the above gives you a good idea of the assumptions that are sometimes made about DBB.

I say assumptions, because, in reality, this often does not happen. And in today’s construction industry, DBB can often feel like more of a roadblock to project success than the best method to deliver a project.

Why is that? Well, let’s address some of the challenges I’ve just noted above.

1. Price certainty

Price certainty is always a key consideration that comes up with DBB. The expectation is that once the tenders come in, the price is locked. Except that it isn’t and waiting until tender for the pricing can have some very negative impacts on your projects (more on that later).

Here are some reasons this is not the case:

    • Change Orders (CO). At a contractual level, DBB separates the GC from the prime consultant. Any errors or omissions made by the prime consultant will automatically result in additional costs. In addition, because of the contractual relationship between owner, consultant and GC, there are added layers of complexity that can slow down the resolution of onsite issues. The old adage “time is money” is never truer then on an active jobsite, so any roadblocks can result in added costs. Finally, changes the owner makes to the project automatically generate COs from both the prime consultant and the GC.
    • Delays. This goes back to the lack of a contractual relationship between the GC and the prime consultant. There’s no major incentive (beyond a determined PM pressuring both parties) to resolve issues onsite, especially if one of the parties is responsible for an issue. This can result in further delays and therefore more cost to get things done.
    • Tariffs. Not a usual concern but these are unusual times. Tariffs carry straight through to the project owner, and because the design is fully completed and priced, there’s very little flexibility to change things when tariffs are introduced after the fact. And the simple act of changing a design at the construction stage in DBB of course costs money.

2. Project owner requirements and control

This is one of the issues that most owners will bring up when looking at delivery methods other than DBB. The expectation is that the owner will get the prime consultant to design exactly what they envision and require.

Let’s see why that’s not always the case:

    • Fixed contract. Once the design is tendered and the contract is awarded to the GC, the owner loses the ability to make changes without incurring a heavy cost.
    • Construction expertise at the design stage. In a DBB project, the owner does not typically get the GC’s input during design. This limits the ability of the owner and their design team to understand what can be built in terms of constructability, what is best value in the current market, and to leverage lessons learned by the GC. As a side note, pre-construction services are a great way to bring this type of knowledge into a DBB.

3. Proven project delivery methods

DBB is often seen as the safe choice to deliver a project, with designs completed early to obtain the best costs during the bid process.

You know the drill by now:

    • Constructability. The lack of construction input means that sometimes the designs issued in the bid documents may not be easily built, increasing the cost of construction.
    • Multiple procurement phases. DBB essentially requires two procurement phases: one at design and the second at construction. Each phase has a significant impact on the schedule.
    • ‘Faulty’ designs. From the GC’s perspective (and contract), any Errors and Omissions in designs are fully the responsibility of the owner and their prime consultant. As such, if there are issues with the design, the bid prices may not be reflective of the final cost. Back to change orders!
    • Market and risk tolerance. The market has changed and so has the relationships between owners, GCs and projects. While DBB still holds the GC accountable for cost, schedule and scope, the GC’s ability to meet those effectively has been somewhat diminished during the last five years. As such, a GCs’ appetite to take on DBB projects versus other project delivery models has decreased, reducing competitive pricing and increasing costs on DBB projects.

So, what do you do now?

First off, DBB can – and does – work for many projects. It’s just not always a silver bullet. Having said that, my advice is to consider investing some time upfront to determine which project delivery methodology is right for your project.

This might entail running internal and external meetings with all interested parties and/or rightholders, identifying your organization’s risk tolerance, doing a review of the current market, and getting professional advice from an infrastructure advisor (I know a few, so feel free to reach out!) on what your project looks like using different delivery methodologies.

A last thought on using DBB. If your organization works on a yearly budget, such as a municipality, and you want to use DBB, plan your projects so: the design phase is completed prior to the end of the current year; the bid phase occurs in the first three months of the next year; and the contract award lines up with your new fiscal budget the following year.

Essentially, get everything done so that you can get to market in February or March and start construction as soon as the season starts. You’ll get more competitive pricing and a buffer if you do need to do value engineering. You’ll also get the most out of the non-winter construction season, helping you diminish construction risks and costs.