Cannabis Construction: Design-Build vs. Traditional Design-Bid-Build Project Delivery

POSTED Dec. 18, 2020

Saving clients time and money by transforming the relationship between designers and builders into an alliance which fosters collaboration and teamwork.

What is the Design-Build project delivery method?

The Design-Build project delivery method encompasses both the design and construction teams working together as one entity, under one agreement, in partnership with the owner of a project. Under this single contract, the team provides the owner with design, preconstruction, and construction services throughout the progression of the project. This team approach towards design begins at the conceptual documents phase, continues through final construction documents, and culminates with the owner receiving a complete and operational facility.  Design-Build project delivery includes an evaluation of both feasibility and cost as the design progresses. This evaluation not only identifies the costs differences between document phases, but also provides solutions for controlling the cost in these areas. Evolution Built recommends and typically incorporates the input of subcontractors from the marketplace, who many times provide valuable insight into the best and most economical methods for their specific scope of work.

What is the Design-Bid-Build Project Delivery Method?

Traditional Design-Bid-Build project delivery methods create a contract between the owner and the architect for design services. The architect would normally produce an “in house” or engineer’s estimate at each stage of drawing completion for the owner to review. Once the drawings have reached the construction document or “CD” level of design, general contractors would be invited to bid the project. The architect may or may not – at their own discretion – solicit input in the form of cost estimates from general contractors or subcontractors to validate all or any portion of the project design. After bidding the project, the owner would then enter a separate contractual agreement with the general contractor with the lowest responsive bidder.  The project architect would then conduct a “CA” or construction administration scope of work for the duration of construction.  

Yes, both methods yield extremely successful projects and are used across the country and around the world, from office buildings, schools, stadiums, transportation and water infrastructure projects. However, it is the bidding strategy that often highlights the difference in approaches. General contractors will always bid according to the project documents – this is required. But it is the competitive bidding in the traditional process that creates an environment for general contractors to exploit weaknesses in the drawings, driving increased (and often avoidable) change orders after the fact. These weaknesses are typically areas where further information is needed or where there are ambiguous details. These missing details create the need for post bid or post contract clarifications often resulting in change directives to the contracted scope of work and an increase in cost for client. The bidding contractors often assess these areas in relation to the profit margins assigned on the initial bid. As ambiguities and detail conflicts are discovered during the takeoff and bidding process, the general contractor’s margins may be adjusted downward to place them in a better position against the other bidders only to later exploit the identified weaknesses with higher profit margins.

In the design-build approach these same areas, viewed as opportunities for additional fees in the traditional method, now are included within the scope of responsibility held by the general contractor and architect under a single design build contract. The design-build approach allows for early collaboration where all team members work together through the beginning stages of the project to identify potential change directives early, thus providing solutions and selecting the best method for achieving the client’s vision. Each member of the team brings their own design and construction expertise to the table.  But in the real sense of the matter, this means that with professionals in place throughout the process, the owner bears no additional burden of costs unless they initiate a design change after the design is complete. Most importantly, the risk is mitigated by the project team and not borne by the client.

Added benefits of the design-build process include:

  1. Faster project delivery through collaborative project management. This means work is completed faster with fewer problems.
  2. Cost savings in both project and life cycle, through an integrated project team geared toward efficiency and innovation.
  3. High quality project from a team that meets performance needs, not minimum design standards. This often yields innovations to deliver a better project than initially envisioned.
  4. Singular responsibility – the architect and the general contractor are accountable equally for cost, schedule, and performance.
  5. One entity drives all the workflow – not two or more. In the traditional method of design-bid and build, the approach is more complicated than with the design-build. The owner is managing a contract with the architect and the general contractor. This can create problems throughout the process, as there is not a single source of responsibility. If a problem arises, the architect and contractor may become involved in a finger-pointing blame game each holding the other accountable, slowing the forward progress of the project and the impasse widens. This results in delays for the owner, which can lead to financial ramifications if not managed properly. Whereas with the design-build approach everyone is on the same side and has the same amount of responsibility if a problem arises.   
  6. Decreased administrative burden for owners. Owners are available to focus on their own business rather than managing individual contracts for multiple entities. This also streamlines communication between the architects, engineers, and contractor as one entity with sole responsibility to the owner.
  7. Reduced risk — the design-build project team reduces or eliminates project risk.
  8. Eliminates adversarial relationships that could arise in a competitively bid project.
  9. Reduced litigation claims by closing warranty gaps, project owners can virtually eliminate litigation claims.

Added benefits of the design-build process include:

  1. Faster project delivery through collaborative project management. This means work is completed faster with fewer problems.
  2. Cost savings in both project and life cycle, through an integrated project team geared toward efficiency and innovation.
  3. High quality project from a team that meets performance needs, not minimum design standards. This often yields innovations to deliver a better project than initially envisioned.
  4. Singular responsibility – the architect and the general contractor are accountable equally for cost, schedule, and performance.
  5. One entity drives all the workflow – not two or more. In the traditional method of design-bid and build, the approach is more complicated than with the design-build. The owner is managing a contract with the architect and the general contractor. This can create problems throughout the process, as there is not a single source of responsibility. If a problem arises, the architect and contractor may become involved in a finger pointing blame game each holding the other accountable, slowing the forward progress of the project and the impasse widens. This results in delays for the owner, which can lead to financial ramifications if not managed properly. Whereas with the design-build approach everyone is on the same side and has the same amount of responsibility if a problem arises.   
  6. Decreased administrative burden for owners. Owners are available to focus on their own business rather than managing individual contracts for multiple entities. This also streamlines communication between the architects, engineers, and contractor as one entity with sole responsibility to the owner.
  7. Reduced risk — the design-build project team reduces or eliminates project risk.
  8. Eliminates adversarial relationships that could arise in a competitively bid project.
  9. Reduced litigation claims by closing warranty gaps, project owners can virtually eliminate litigation claims.

Design-build and traditional methods of building both have their own strengths and weaknesses. When designing and building in a fast-growing and ever-changing market, such as Cannabis or Hemp, the design-build method is your best option for project delivery. Business owners have the continuity of working with one entity, one integrated team, one contract and, most importantly, one unified flow of work from initial concept through completion. This simple but fundamental difference saves money and time by transforming the relationship between designers and builders into an alliance that fosters collaboration and teamwork.

In the cannabis construction vertical we are faced with increasing costs and ever-changing regulations. Given the benefits of a preassembled team of quality contractors, the use of design-build construction delivery has greatly accelerated in the United States, and we believe is one of the most significant trends in design and construction today.

Evolution Built brings value to our clients not only through our extensive experience in cannabis construction, but by assembling a project team tailored to best suit each client’s project vision and end goals. Teams comprised of people who have previously worked together are privy to each other’s strengths and weaknesses, resulting in a more coordinated and synchronized effort to ensure your project is delivered on time and exceeds your expectations.

United from the outset of every project, Evolution Built’s integrated team readily incorporates Building Information Modeling (BIM) – a new system that can readily identify conflicts in plans. Furthermore, if sustainable building designs are integral part of your vision, our team has experience incorporating LEED Certification goals into a project and estimate, helping ensure your final project meets the standards of the U.S. Green Building Council.

When it comes to design-build projects, there are typically three types of contract delivery methods:

  1. Design-Build Lump Sum
  2. Design-Build Cost of Work with GMP (Guaranteed Maximum Price)
  3. Design-Build Cost of Work without GMP

The below table highlights the strengths and weaknesses of each for easy comparison.

Design-Build Contact Types

This Design-Build Cost of Work without GMP delivery method is one of many methods of contracting that our team has successfully deployed in the cannabis space. In our experience, this delivery method gives the Project team the most flexibility to adapt to expedited design and construction schedules. If time is not a primary concern, then there are other preferred contracting options.

Depending on the schedule, we can customize the procurement process for each scope thru Requests for Proposals (RFP’s), Request for Qualifications (RFQ’s), Hard Bid or any combination of the previous. The key to this delivery method is that it allows us to onboard our key subcontracting trades well before the design is near completions. This allows us to produce submittals, purchase orders, delegated designs, long lead procurement items, detailed trade estimates, and schedules months before we would have the capabilities to do so under other delivery methods.

These items are on the critical path and will get you operational much sooner than otherwise possible. We understand that each day we deliver the project early for the client’s operational use, is a day in which revenue can be generated. It is our opinion that Integrated Project Delivery (IPD) method utilizes a Lean approach which is key to meeting the financial goals of cannabis companies. This method brings extra value to our clients by creating an opportunity to yield profits earlier than traditionally feasible. IPD allows us to shrink the overall design and construction phases by overlapping the activities and providing information to the field “just in time” for the scheduled construction phases.

This method requires positive communication techniques throughout all project team members, early integration with key subcontractors, expedited review methods and a project delivery plan that becomes the mutual goal of all members of the Project Team.

In summary, design-build project delivery methods yield a better end-product through collaborative design. Evolution Built’s Fast-Track technique encompasses combining complete in-house design, unique construction delivery methods and a comprehensive start-up procedure, which provides our clients full support from project conception to completion and operation. This unique process delivers fully operational, technologically advanced facilities, in the quickest manner possible without sacrificing quality and performance. Learn more about Evolution Built and our Fast-Track process at www.evolutionbuilt.com.

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