Design-Build Delivery In The Water Sector — A Trend Whose Time Has Come
By John A. Giachino, DBIA, co-chair, Design-Build Institute of America Water/Wastewater Markets Committee
The traditional project delivery model of design-bid-build is starting to give way to an alternative that often saves time and money while advancing innovation. Could design-build soon be the dominant delivery method for water/wastewater projects?
Water sector interest in non-traditional construction procurement methods has grown substantially over the past decade. Aging systems, regulatory issues, and capacity demands are requiring public and private water utility owners to employ delivery methods that provide quicker delivery times and higher quality solutions and results, as well as earlier knowledge of construction costs. Owners are more often turning to alternative delivery approaches, including design-build.
Design-build is not new. History’s earliest projects were designed and built by master builders. Industrialization brought about the specialization of engineering/design and separation of design from construction. But the trend in water and wastewater utility capital project execution is moving once again toward the “master builder” concept where one party is completely responsible for design and construction under a single contract. The key aspect of design-build is that the owner has a single point of responsibility for design and construction, which speeds project delivery, saves time and money, and reduces litigation and claims.
Trending Up
As utility owners use design-build to deliver water and wastewater projects, the Design-Build Institute of America (DBIA) is seeing an increasing demand for specific training and materials. In response, DBIA has released best practices for design-build in the water/wastewater sector (available at www.dbia.org) and is working with industry partners like the American Water Works Association (AWWA), the Water Environment Federation (WEF), and the Water Design-Build Council (WDBC) to continue the everpopular Design-Build for Water/Wastewater Conference.
Design-build has shown significant growth in the U.S. market. RSMeans, a part of The Gordian Group, recently published a report showing design-build market share has been holding steady at 40 percent since 2011. This represents an increase of 10 percent in the use of design-build since RSMeans first captured the data in 2005.
The use of design-build in the water sector is lagging behind other infrastructure sectors such as transportation. The Florida Department of Transportation District 7 worked with the Federal Highway Administration Florida Division and developed a design-build framework for using federal highway safety funds. Ultimately, the design-build framework allowed the district to reduce the time it takes to deliver simple or low-cost safety improvements from 3 to 5 years down to just 3 to 9 months.
In the water sector, progressive design-build is a delivery method that is gaining in popularity and is a trending topic today. In this delivery method, the design-builder is selected based on qualifications. The proposer’s experience, expertise, resources, and understanding of the project are evaluated. Price is not considered in the initial selection of the design-builder. Once the design-builder is selected, the project proceeds in two phases. Phase one involves developing the design in collaboration with the owner and advancing it to a point where the guaranteed maximum price can be agreed upon. During the second phase, the design is completed, buy out bids are solicited and received, and construction takes place. Progressive delivery is being used more and more by water and wastewater agencies because it provides owners with more control over the design and assures that owners get what they want.
We are seeing a shift in how the construction industry is organized. There are now large, integrated design-build firms that are aggressively pursuing projects in the U.S. and abroad. General contractors are retooling their capabilities to provide design-build services. Engineering firms are enhancing their capabilities on the construction side.
The firms delivering design-build services today focus on innovative technology and out-of-the-box thinking to generate solutions that can differentiate them. In design-build, solutions are not limited to traditional ideas. The best solution for the project at hand is always first and foremost. As ideas are generated, teams work as one to scrutinize them so owners are ensured the best design, means and methods, materials, costs, schedule, and more. With a Guaranteed Maximum Price (GMP) approach, this is all accomplished with open-book, full transparency. Owners will see more options, make better-informed decisions, and obtain better value.
Successful Applications
An example of innovative technology application using design-build delivery is DC Water’s Blue Plains Advanced Wastewater Treatment Plant biosolids reuse program. Originally, the utility pursued a design that used anaerobic digestion — a process that would have required 10 large, egg-shaped digesters, which would be an expensive, energy-intensive solution. After thorough evaluation, DC Water settled on a design-build approach to reduce the likelihood of unexpected costs. Using a thermal hydrolysis process (THP) would also reduce the size of the digesters needed by 50 percent, lowering construction costs and making the project more affordable. Obtaining a fixed price for the $215 million project gave DC Water the certainty to move forward with the detailed design and construction. The design-build team also developed an alternate approach to design and construction of the digester building, which shaved several months from the delivery schedule. Reduced biosolids hauling and onsite power production are expected to reduce the facility’s greenhouse gas emissions by 40 percent. In addition to reducing waste, generating energy, and improving air quality, the project will save ratepayers an estimated $20 million annually — $10 million in power savings and $10 million in reduced sludge disposal costs.
Innovative thinking is also a design-build derivative. The effluent filter upgrade and expansion project recently completed by the Charlotte-Mecklenburg Utilities Department (CMUD) at its McAlpine Creek Wastewater Management Facility, winner of the DBIA 2015 Design-Build Project/ Team Award, is a good example of out-of-thebox thinking. CMUD desired to have greater control by being an involved and integral part of the design-build team through collaboration, communication, and development of technical solutions. Throughout the development of the GMP, the owner wanted to add scope to the project, thereby adding cost. Increased collaboration through the design-build process allowed the contractor to present each item in an à la carte list so CMUD could decide what was critical and what could be cut. Using the strategy of open collaboration, the project was completed under the GMP, allowing CMUD to include additional scope items. In short, all parties were partners on this project, and challenges and issues were dealt with as partners.
Future Prospects
Certain questions arise as the popularity and use of design-build delivery continues to grow in the water space. Should design-build dominate the construction market? Will distinct design and construction companies become the exception, not the rule? As evidenced by the growing number of design firms that are creating construction holdings, there is already a consolidation of design and construction firms to provide integrated design-build services. Will state and local legislation fully support the use of design-build? Time will tell, but it appears that design-build is a sustainable trend into 2016 and beyond.
About The Author
John A. Giachino, DBIA, is co-chair of the Design-Build Institute of America Water/Wastewater Markets Committee. He has served twice as president of the DBIA Florida Region and currently serves as Director of Business Development for PC Construction Company, a leading design-build construction firm.