PROJECT DELIVERY
PROJECT DELIVERY
PROJECT DELIVERY
Architecture is a project-based endeavor, and architectural practice centers on project delivery. Project delivery methods change in response to economic trends, environmental concerns, and technological advances. Skill in project management and leadership increases in importance as projects become more complex and more integrated. Research in practice, quality management, use of technology, and understanding of the regulatory environment are ways in which architects manage complexity and improve effectiveness.
Design Project
Delivery
Project Delivery Methods
The organization, strategy, and responsibilities of the key players in the building
process—including the owner, architect, and contractor—comprise the project
delivery method for the project. Multiple models are available, and can be
chosen based on which project variables—cost, schedule, building quality, risks,
and capabilities—are driving the project.
INTRODUCTION
A completed building results from a complex sequence of decisions made by the many
participants in the design and construction process. For a project to run smoothly,
someone must defi ne responsibilities, organize and integrate the work of the participants,
and manage the process by which the project is developed and delivered to the
owner. The architect, who is deeply involved in most projects from inception to completion,
may assume this role as the fi rst construction professional hired by the owner,
although this position is increasingly being assumed by construction managers and
advisors. Nonetheless, the owner relies on the architect’s expertise about delivery decisions,
and the architect should help to determine which delivery method best suits the
owner’s needs. Since the project delivery model can dramatically affect the results of a
Phillip G. Bernstein is vice president for strategic industry relations of Autodesk Inc. and a
former principal with Pelli Clarke Pelli Architects. Bernstein teaches at the Yale School of
Architecture and lectures and writes extensively on project delivery and technology issues. He
is former chair of the AIA Contract Documents Committee.
building project, an understanding of delivery approach options is central to the successful
practice of architecture.
Most delivery methods have evolved primarily in response to different roles assumed
by the entity that constructs a building and the relationship of that entity to the architect.
The roles and responsibilities of this player, variously known as the “contractor,” the
“GC,” the “construction manager,” or the “design-builder,” can vary greatly in different
delivery methods, and the information provided by the design team must be calibrated
accordingly. In most variations of project delivery models, the roles and responsibilities
of the architect are similar, but the participation of the builder varies greatly.
Up through the late 1970s, most projects were built under what was then known
as a “traditional” delivery approach. Now termed as “design-bid-build,” this approach
assigns each player a clear, well-defi ned role. The owner hires and pays the architect to
provide design services; the architect develops and places a set of contract documents
into the construction marketplace for competitive bid; the general contractor assembles
a collection of sub-trades and submitted bids for the project; and, in most cases,
the lowest general contractor bidder is awarded the project. The contract for construction
between the owner and the contractor incorporates the architect’s construction
documents (including the drawings and specifi cations) plus an agreement to build the
design for the bid price, which is the basis for the contractor’s selection.
Variations in project delivery approaches in the design and construction industry
appeared in response to the desire by owners to optimize specifi c outcomes beyond
lowest fi rst cost. For example, the high cost of borrowed money during the credit
crunch of the late 1970s accelerated typical construction schedules, catalyzed the creation
of construction management, and gave rise to the increased use of fast-tracked
schedules. The need for speedier project completion required not a single construction
sequence but multiple individual packages that were bid as their design was completed,
resulting in the asynchronous construction of individual project pieces in the field. In
response, some general contractors marketed their services as “construction managers”
adept at controlling these complex projects.
The liability crisis of the 1980s—characterized by an explosion of lawsuits—pushed
architects further from job site responsibilities and pressed new risks on contractors,
who in most cases were willing to assume such responsibilities in exchange for everlarger
pieces of the overall design-construction fee. As projects became more complex
and failures became more dangerous and expensive, owners needed in-depth construction
advice during design that architects were unwilling or hesitant to provide. Frequent
and acrimonious disputes between architects and contractors, often fought out
in court, led owners to consolidate design and construction responsibilities under a
single entity. Large construction projects like hospital and airport renovations, which
needed to operate during construction, required sophisticated management and construction
planning beyond the capabilities or interests of architects and created new
roles for professional program managers.
The building enterprise has evolved to include an even broader set of constraints
and expectations that involve increasingly complex building forms, prefabricated construction
subassemblies like curtain walls, integrated building control systems, and
rapidly accelerating requirements for sustainable design. Building professionals have
also realized that, despite extensive experimentation with delivery approaches, the outcomes
of most construction projects remain unpredictable at best, and that traditional
roles and responsibilities of the players bear further scrutiny. A new class of delivery
models known today as “integrated project delivery” has emerged, which posits closer
collaboration and open sharing of information between the key constituents of the
building enterprise, underpinned by the power of Internet-based digital design information
and technology that uses “building information modeling.”
All in all, projects are ever faster, riskier, and involve far more participants than
those of even 20 years ago. Choosing an appropriate delivery model is often the key to
success—or the source of failure.
PLAYERS IN THE PROJECT DELIVERY PROCESS
Regardless of how they are structured, all delivery methods involve three elemental
parties: owner, architect, and contractor. Their discrete roles, expertise, and expectations
are described in Figure 9.1.
The Owner
The owner (or client) initiating a building enterprise is usually the eventual owner
or operator of the finished building. The owner can be an individual, organization,
or other entity that has initiated a design project. For purposes of understanding
delivery methods, the owner is the entity that holds one or more contracts with
the architect and contractor and is responsible for making payment to these participants.
The owner is also responsible for paying for the construction of the
building.
An owner’s expertise in design and construction can vary widely, usually in proportion
to the breadth and complexity of projects the individual or company has undertaken.
Owners generally have similarly broad expectations of the other players in the
process.
The Architect
The architect is the licensed design professional who, acting as an agent for the owner
by providing architectural expertise, generates a design concept for the project. While
the specifi c role of the architect varies greatly according to delivery method, it is the
architect who designs, documents, and administers the contract(s) for construction of
the project. The “architect” can be an individual or a fi rm and may contract with consultants
such as engineers who augment and support the design effort. In all delivery
methods, the architect generates documents that describe the design intent. The contractor
uses these documents to build the building.
FIGURE 9.1 Relationships of Project Participants
Design Team Consultants
While architects are broadly experienced in the various subdisciplines necessary to complete
a project, they typically contract with a wide array of specialty engineers and other
consultants, depending on the scope of the project. On all but the most straightforward
projects (like small private residences) the architect will subcontract responsibilities for
structural and mechanical/electrical/plumbing engineering, and may require other services
from additional engineers (such as geotechnical engineering) or special consultants
(such as lighting, acoustics, or code/life safety for complex projects). In addition, the owner
may bring specifi c consultants to a project to augment the overall project team, most commonly
constructability assistance by construction managers, attorneys, or other consultants.
It is important to understand and defi ne the role of every consultant on a project.
The Contractor
The contractor is responsible for the actual construction of the project. Typically
known as the “contractor” or “general contractor,” the contractor’s team may include
a variety of subcontractors, suppliers, and fabricators who together execute the design
intent of the architect’s documents. The contractor typically agrees, at a prearranged
point in the design process, to construct the project for an agreed-upon sum. The
determination of that moment and the resulting responsibilities of the contractor is
one of the key differentiators of various delivery methods.
Subcontractors, Fabricators, and Suppliers
Like the architect, the contractor requires an array of subcontractors to complete a
building project. Since most contractors do not self-perform the vast majority of the
work, they contract with (thus the term “contractor”) necessary companies, tradespersons,
suppliers, and fabricators that are then coordinated by the contractor to achieve
the built project. Typical subcontractors might include structural steel assembly, sheet
metal and systems installers, curtain wall suppliers/installers, sheetrock and interior
fi nishes subcontractors, and electrical subcontractors. Larger projects can have tens or,
in the largest project, hundreds of such participants.
Other Participants
Although different in each project, other key players in the process must have explicit
relationships to project. Regulatory agencies (like building or zoning offi cials), external
constituents (like local property owners), lending entities (like banks), and even local
community groups may affect the project and should be understood in the context of
the overall project structure. And while having no defi ned role in a project structure,
the architect’s obligation to protect the public’s health and safety makes all users of a
project—whether affi liated with the client or just walking through the halls—an
implicit “client” of the job.
PROGRAM
MANAGEMENT
Some large, complex projects
have multiple building elements
and complicated sequencing.
One example is construction of a
new airport terminal, with
associated roadways, garages,
and airfi eld, adjacent to existing
facilities that must be kept in
continuous operation. For such
projects, an owner may elect to
hire a “program manager” to
oversee and coordinate the
project. Program managers
support the owner’s interests and,
for all practical purposes, are the
owner in some cases. Such
services are usually provided by
large construction management
entities; however, some architects
have now begun to provide
program management services.
KEY VARIABLES AFFECTING DELIVERY CHOICE
Once only the cost of construction drove the delivery approach of every project: With
little exception, the contractor submitting the lowest bid was selected. Other methods
have emerged to optimize, other key variables to drive the selection of a delivery
approach. These include construction cost, schedule, quality, risk, and owner capabilities.
A correlation of driving selection factors for various delivery methods can be found
in Figure 9.2.
Construction Cost
As the owner’s greatest fi nancial obligation for a project, construction cost is frequently
the central concern of design and construction. Buildings are very expensive, and
FIGURE 9.2 Characteristics of Project Delivery Methods
owners rarely have infi nite funds with which to pay for them. Fixed budgets create clear
and defi nite obligations for the architect and the contractor. Meeting those budgets is
a high priority for every member of the project team.
Schedule
Most projects include a time frame in which the project must be complete and ready
to occupy. When a building’s primary function is critical to an owner’s mission, meeting
a precise schedule may be the most important consideration in determining how a
project will be built. Examples of such situations include academic projects, which must
be synchronized with the academic calendar, or performing arts centers that schedule
events years in advance. Schedule compliance (and acceleration) is critical when interest
rates are very high and capital for building is scarce, as even small delays raise the
cost of construction fi nancing dramatically. Orchestrating the design process with a
specifi c schedule may include not just meeting a fi nal deadline but also choreographing
design deliverables with intermediate approvals and construction milestones.
Building Quality
The demand for particular standards of performance in systems, fi nishes, enclosures, and
other building elements is directly related to decisions about schedule and construction
cost. The architect typically establishes a clear relationship between a project’s level of
quality, budget, and program, where an increase in one parameter may imply a change
in another. An owner may be willing to accept lower levels of quality to save construction
cost or to allow a project to be completed in a shorter period of time. Conversely, projects
with long anticipated life spans (e.g., civic or institutional buildings) may emphasize
levels of quality for which construction costs and schedules must be calibrated accordingly.
Sustainable design considerations—a building’s relationship to the environment,
particularly its long-term use of energy and indoor environmental performance—are a
signifi cant component of its planned quality. Establishing a common understanding
among project participants about all such levels of quality is critical to successful delivery.
Project Scope
Rarely is the project scope completely understood or precisely fi xed during the course
of a project. A building’s characteristics are never completely resolved until its completion. Until that time, its scope—the combined characteristics of size and
quality—may be indeterminate and the services provided by the architect must
acknowledge this inherent ambiguity. The project’s scope is successively refi ned during
design, and subsequently during preparation of shop drawings and then in actual construction.
Changing conditions, usually comprised of changing owner demands, market
conditions for materials and construction trades, and even unexpected site or existing
conditions on the project site, will affect the project scope as it unfolds. Delivery
models should explicitly acknowledge the relative fi xity of the project scope.
Risk
Risk is perhaps the most intractable variable in the building process. Players in the
project make their best efforts to manage, reduce, or transfer their exposure to liability
as the project unfolds. Key risk considerations include the following:
• For the owner: Can the project accomplish its goals within the constraints of time
and budget? Does the owner have the capability to understand the project and support
the decisions necessary to complete it?
• For the architect and the architect’s consultants: Can the project be accomplished within
the standard of care at an acceptable level of quality, within the owner’s parameters,
the architect’s own capabilities and skill, and the strictures of the fee?
• For the contractor and the contractor’s subcontractors: Is it possible to complete the project
within a contractually stipulated time frame and/or cost, given market conditions,
availability of subcontractors, and the contractor’s experience and capabilities?
Client Capabilities
The internal capabilities of a client organization can signifi cantly affect the roles the
client, architect, and general contractor play. The degree to which design, documentation,
construction administration, and management are outsourced, as well as the relative
importance that each team member plays, frequently depends on the strengths,
weaknesses, and preconceived notions of the owner. Owners may have substantial construction
experience and in-house capabilities to understand and participate in a
project, or may be embarking on their very fi rst project as a client. Their preconceived
notions may also affect the roles and responsibilities of the project participants. Each
has a different relationship to delivery approach.
Project Team Capabilities
While any architect who participates in a project must meet the standard of care, levels
of experience and capabilities of the team may vary by project type. Teams with greater
degrees of experience and confi dence in a particular type of project may be more comfortable
with more complex, aggressive, or experimental delivery models. Generally
speaking, teams with less experience should adhere to well-understood, standard models
and associated typical contracts.
METHODS OF PROJECT DELIVERY
The relationships and responsibilities of the players and how they will share information,
combined with an explicit understanding of construction cost, schedule, level of
quality, and resulting allocation of risk, together defi ne the project delivery method.
The characteristics that identify a delivery method can be defi ned by answering questions
for the following issues:
• Driving factor: What is the most important outcome driving the project for the
owner—cost, risk, quality, or schedule?
• Architect’s role: What are the responsibilities of the architect, and how do these apply
to each successive design and construction phase of the project?
• Contractor’s role: Who is responsible for building the project, and when in the process
is that player selected?
• Establishment of construction cost: When is the actual cost of construction defi nitively
established contractually between the owner and the contractor?
• Number and type of design and construction contracts: How many individual contracts
for design and construction are necessary to accomplish the project?
Answers to these key questions, combined with an explicit strategy about cost, quality,
schedule, and risk, provide the information necessary to select and implement a
project delivery approach.
Delivery models are typically based on one of three typologies: design-bid-build,
construction management, or design-build. A fourth typology, integrated project delivery,
is now evolving and discussed elsewhere in the Handbook.
Design-Bid-Build
Once known as the traditional approach, this delivery method involves a linear design
sequence that results in a set of construction contract documents against which contractors
submit fi xed price bids. In design-bid-build approaches, the lowest-bidding
contractor whose proposal responds to the requirements of the contract documents is
usually selected to build the project. Many projects in the United States are constructed
under this approach, and many of the business models that drive the construction
industry, including contracts, fees, and risk management strategies, are derived from
the design-bid-build method.
A variation of design-bid-build is the “negotiated select team” approach, in which
the contractor is selected early in the design process and certain contract terms (such
as overhead and profi t multipliers) for the contractor are determined prior to completion
of the construction documents. Subcontractors are then selected and the fi nal
contractor team is assembled once the construction documents are complete. The fi nal
contract amount for construction is determined based on the fi nal documents and
calculated using the pre-negotiated terms. Selected portions of the building that may
be particularly diffi cult to fabricate or construct may be accelerated under “negotiated
select team.”
Another variation of design-bid-build method is known as “cost plus fi xed fee.” In
this approach the contractor is selected at the completion of contract documents, but
the scope of construction is unpredictable (due in part to unknown factors such as
existing conditions). Under a cost plus fi xed fee contract, the contractor is paid actual
labor and material costs plus overhead for construction for coordination of trades on
the site plus a fee that represents a fi xed amount of profi t that does not vary according
to the total project cost, disconnecting the contractor’s profi t from any increase in
project costs. Added incentives may be added to the fee if the project fi nishes early or
under the original budget.
Construction Management
Owners have increasingly demanded detailed construction and technical advice earlier
and earlier in the design process. The building community has accommodated this
need by creating the fi eld of construction management. The construction manager
(CM) can play one of three roles:
• CM Adviser: The CM as adviser acts only as a constructability and cost management
consultant to the owner during the design and construction process, but will not
build the building. CM-adviser projects can be delivered under any of the methods
previously described.
• CM-Agent (CM-A): The CM as agent provides early consulting and may act on
behalf of the owner in assembling and coordinating the construction trades prior to
and during construction. CM-agents typically provide their services for a fixed fee and assume no risk for the actual construction costs themselves but pass on both
savings and overruns directly to the owner.
• CM-Contractor (CM-C): The constructability and cost
adviser role of the contractor during the project’s design
phase transitions at a predetermined moment to the
traditional role of design-bid-build contractor for the
project. CM methods of delivery frequently include the
use of a “guaranteed maximum price,” or “GMP,” which
is a commitment by the CM-C to build the project for
a specifi ed price based on early design documents (typically
those available at the end of design development).
This places the CM-C at risk for the construction cost
of the project. An inherent diffi culty in CM-C arrangements
stems from the CM’s dual role as contractor and
estimator, as cost decisions made early in design directly
affect the CM’s cost (and profi tability) later in construction.
Owners considering this approach should be aware
of this fact.
In general, the construction management industry
presents itself to owners as an essential project contributor
when complexity, schedule, or commitment to budget
objectives are critical. Because it is rare that one or more of
these issues are not important to a project’s success, construction managers are involved
in many large building projects. However, architects with suffi cient experience (and
willingness to expand their work) are increasingly offering construction management
services.
GUARANTEED MAXIMUM PRICE (GMP)
APPROACHES TO CONSTRUCTION
MANAGEMENT
In the past, the establishment of a guaranteed maximum
price (GMP) suggested a commitment by the owner and
CM-contractor to a construction cost based on partially
complete design documents. The price established was
understood to account for the “risk” inherent in using
these documents. Many CM-based projects now invoke a
GMP as an evolving cost target for the project but sustain
it through the completion of construction to maintain
fl exibility with the owner about the fi nal cost of a project.
It might be argued that a GMP, carefully developed and
refi ned based on construction documents, is actually a
“hard bid.” Care should be taken to understand and
defi ne this term when it is used to describe construction
cost commitments after the design development phase.
DESIGN SEQUENCE
The typical phasing of a design-to-build process includes
standard phases of design resulting in a single package
of construction documents. The emergence of fast-tracked
construction in the 1970s changed this approach. Most
projects today, however, are under signifi cant schedule
pressure, and the typical linearity of design phases—SD,
DD, CD—is fast giving way to hybridized approaches
where bid packages for individual building components
are generated based on their schedule requirements or
other market constraints. Irrespective of delivery model,
projects rarely operate in a strictly linear fashion. There
is some speculation that, as integrated project delivery
methods and digital design technology become better
understood and adapted, typical design phasing may
give way to new definitions of design deliverables and
project sequencing and phasing.
Design-Build
This delivery method provides the owner a single-point responsibility for both design
and construction. The design-build method sprang from clients’ growing dissatisfaction
with the inherent tensions and confl icts of delivery approaches that place architects
and contractors in adversarial roles. Under design-build, a single contract is
established between the owner and the design-build entity having both design and
construction capabilities. Typically, that entity is a contractor with the architect as a
subconsultant for design services. This contract typically
includes a fi xed price for both design services and construction
cost. Design-build approaches require an explicit
determination of the roles and responsibilities of the
design-build team.
An interesting issue in design-build projects is the
mechanism by which the owner establishes and enforces
the performance and quality parameters of the project, a
role typically assumed by the architect as an agent for the
owner separate from the contractor. A variation on the
consolidated approach of design-build is “bridged designbuild,”
which is derived from project teams that include
both a design architect (who establishes the design concept)
and a production architect (who determines technical
criteria and generates the construction contract documents).
These two architects work in concert to develop and
execute the design, as follows. The fi rst is a design
architect who prepares a preliminary design for a
building and establishes, typically through a performance
FIGURE 9.3 Sequences and Key Decisions by Project Delivery Method
specifi cation, detailed criteria to which the ultimate design must conform. The
completed design concept and criteria package (typically based on design
development drawings and specifi cations) are then issued to design-build teams
that offer both technical architectural and construction capabilities who bid on
the work.
The “bridge” between concept and technical design is the juncture at which
design-build teams bid on a project, and a team is selected based on the consolidated
costs of technical documents and construction. The design architect remains in an
advisory role to the owner, reviewing and critiquing the evolving design and construction
based on the design and criteria package. The technical architect who is part of
the design-build team provides detailed technical documentation for construction.
This approach takes maximum advantage of a traditional architect-owner relationship
with the participation of the design architect and simplifi es the contractual responsibilities
of the design-build approach. It might not be suited, however, to projects that
require extensive interaction between the architect and owner during the entire design
and construction process, since a portion of the design team is contractually tied to the
building contractor.
OTHER DELIVERY MODELS
In Great Britain, consolidated design, construction, development, and building operation
teams compete to deliver and operate completed buildings for extended periods
as long as 50 years. The architect is one member of such teams. Owners pay a yearly
fee in exchange for the use of these buildings. Many health care projects in the
United Kingdom are using this model, notably when the government’s Health Services
does not wish to spend capital on building construction and operation. The
build-operate-transfer model in Canada is a similar model. In the United States, developers
are creating “lease-leaseback” arrangements, where projects are delivered for
a client by a third party and then leased back to the client for a set period, with
ownership reverting to the original client after an extended period, often 99 years.
There are other variations on private-fi nance schemes, where private funds for construction
of private projects have evolved as alternative fi nancing strategies for projects;
such schemes are sometimes, but not always, accompanied by consolidated
design-deliver-operate project teams.
Design Assist
The increasing technical complexity of many projects, particularly those with highperformance
enclosure or mechanical systems, demands the early involvement of key
subcontractors and fabricators during the design phase. A new model called “design
assist” has evolved accordingly, in which shop drawings generated by these subcontractors
are incorporated directly in the architect’s construction documents, and the architect
is not required to document those systems as traditional “design intent” deliverables.
This model purportedly creates more accurate and effi cient working drawings, as well
as improved cost control and construction operations.
Project Alliance Models
The internal capabilities of a client organization can signifi cantly affect the roles the
client, architect, and general contractor play. The degree to which design, documentation,
construction administration, and management are outsourced, as well as the relative
importance that each team member plays, frequently depends on the strengths,
weaknesses, and preconceived notions of the owner. Owners may have substantial construction
experience and in-house capabilities to understand and participate in a
project, or may be embarking on their very fi rst project as a client. Their preconceived
notions may also affect the roles and responsibilities of the project participants. Each
has a different relationship to delivery approach.
Project Team Capabilities
In Australia, the industry is experimenting with a radical delivery model called Project
Alliance in which the entire project team—designers, contractors, and subcontractors—
are bound together in a single contract that holds each jointly responsible for the
project and rewards all for its success. Of interest in the Alliance model is the requirement
that each project member fully support the efforts of the other, since their fi nancial
success is tied to mutual cooperation. The owner in these projects establishes
measurements of this success—budget, cost, or quality, for example—and rewards the
entire team based on how well these aims are achieved. Principles of Project Alliance
have strongly infl uenced the development of Integrated Project Delivery (IPD) here
in the United States.
CONCLUSION
Like many professionals anticipating the challenges of practice today, architects face
increasingly complex decisions that drive the very basis of how projects will be designed
and built. Advising owners intelligently about delivery options requires an understanding
of the players in the building process and their roles, the key variables that affect
the choice of delivery method, and, fi nally, the range of choices available in the current
design and construction marketplace.
The other articles in this chapter illuminate in detail the methods of project delivery
in common use as of 2012, and methods that are emerging as more frequent
choices by owners, architects, and contractors. These include construction management, integrated project delivery, design-build—both architect- and contractor-
led—and architect as developer.
A new generation of delivery models based on principles of integration is coming
into view. To maintain a central role in the building enterprise, architects must
strive to understand, master, participate in fully, and, when necessary, invent such
methods. The chapter concludes with an article detailing these emerging trends
and methods.