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10.07.2020

Progressive Design Build Delivery - A Collaborative Approach

Valerie P. Onderka and Donna M. Hunt - Vice President - AIA, Esq. Assistant Vice President

Progressive Design Build (PDB) delivery model is taking center stage for large construction projects by encouraging collaboration and transparency between the parties at the outset.  The approach brings together the owner, contractor and design firm at the earliest stages of project development facilitating open communication amongst all professionals through to completion.  The goals are to secure fair market pricing, keep the project on budget and complete construction as specified on schedule.  

PDB is an alternative method to the traditional Design Build (DB) delivery model.  In essence, PDB is a single owner contract, whereby the Design-Builder assumes the risk and sole accountability for the project while working in collaboration with project professionals. Contracting with a single entity knowledgeable as to the many design elements and building contingencies inherent in any large construction job eliminates the potential for conflict and litigious animosity between parties if the project goes awry.  The PDB sets forth established relationships, roles and responsibilities that extend throughout the phases of construction to successful completion.

Design Build Institute of America (DBIA) defines “Progressive” Design Build as a collaborative step-by-step process whereby the three key entities cooperate as a team on large scale construction projects delivered in two phases: Phase I involves pricing level design development, pre-construction services and negotiated contract price.  Phase II encompasses final design, construction and commissioning. 

In both DB and PDB, an owner utilizes a proposal process for selecting the Design-Builder.  The first step is issuance of a Request for Qualifications followed by a Request for Proposal (RFP) sought from the finalist Design-Build teams.  In DB, each Design-Build tender quotes a fixed price for design and construction incorporated in its RFP response, based on construction documents that are typically less than 30% complete.  The Design-Builder is selected on the quality and overall value of the proposal and the fixed contract price.  This traditional Design-Build process has resulted in disputes, financial loss and schedule delays. 

Here is where the characteristics between the delivery methods differ.

In PDB, the word “Progressive” refers to the way the design is developed by the Owner and the winning Design-Builder through a stepped progression.  Unlike DB, in PDB the Design-Builder is selected almost entirely on qualifications and not price.  The initial contract reflects Design-Builder services that would be required to develop the project design to around 50-70% of completion.  At that point, a guaranteed maximum price (GMP) for the completion of the design and construction is negotiated between the Owner and Design-Builder.  The GMP should include contingencies for design development and yet unknown increased cost of construction.  Upon mutual agreement, the Design-Builder progresses to the next step of project completion.  If negotiations fail, however, the Owner has the option to terminate the relationship and cease construction; thereby reverting to the conventional Design-Bid-Build method to complete the project. 

Owners entering a PDB relationship must be brave and confident in their selection.  In some scenarios, Owners often struggle with not knowing exactly what the GMP will be until the project is 70% complete.  PDB allows the design and construction team to work in partnership from the earliest stages of the project to identify and mitigate risks so to reach a more accurate cost of project construction.  Yet, design build contingencies may arise during on-site construction that could impact the final completion cost.  Ultimately, the Owner has control over the initial budget and final completion cost.  Key to PDB projects is collaboration and communication so the Owner is aware of how the project is progressing with the Design-Builder and its preferred sub-contractors throughout all phases of construction.  

Today, the approach is being enthusiastically embraced by the American Counsel of Engineering Companies (ACEC), further validating the need for a correction in the traditional marketplace as contractors and design firms execute projects to benefit Owners through a progressive delivery model.  Successful PDB development rests upon budget clarity and efficiency of collaborative efforts to accomplish agreed-upon design and performance goals for the construction project.