Comparison of Design-Bid-Build and Progressive Design-Build in the Water Industry

The delivery method an owner selects can have a significant impact on level of owner risk, constructability challenges, project duration, long-term value, project success and ultimately owner and community satisfaction.

Collaborative delivery models, such as PDB, are gaining popularity in the water/wastewater sector where the traditional DBB method has prevailed and endured for decades. This shift is due to projects increasing in complexity and size while carrying greater risk for owners. There is also an increased need for accelerated schedules to meet regulatory requirements for municipal and industrial clients. Yet, collaborative delivery methods aren’t always the right fit for every project.

DBB remains popular for smaller-scale, straight-forward, low-risk projects. PDB is being used for complex, high-risk projects that require cost-conscious designs, construction innovations and an expedited timeline. Making the decision for the best-fit delivery model depends on several considerations and project drivers.

Design-Bid-Build and Progressive Design-Build Comparison

Below we compare two delivery methods: design-bid-build (DBB) and progressive design-build (PDB). We have organized the comparison between DBB and PDB into three sections:

  • How procurement differs with DBB and PDB
  • DBB and PDB side-by-side comparison on six points of difference
  • Summary of factors to consider when choosing DBB or PDB

How Procurement Differs with DBB and PDB

Contractor selection on DBB is based on low-bid price. With PDB delivery, owners typically select based on qualifications and can have the option to use either a one- or two-part procurement.

DBB: Low-Bid-Based Selection

DBB requires separate, sequential contracts with the designer and the contractor. Contractor is selected based on the lowest bid price. DBB procurement has three phases:

  • Phase 1: The owner releases RFP to select and hire a design engineer to create plans and specifications.
  • Phase 2: The owner prepares and releases an RFP for construction with detailed design documents.
  • Phase 3: The owner hires the contractor to build the project.

PDB: Qualifications-Based Selection

PDB requires one contract with a design-builder to manage both design and construction. The most qualified design-builder is selected. The owner has the flexibility to use either a one-part or a two-part procurement process.

  • One-Part Procurement Process: Owner releases a combined RFQ/RFP to select the most qualified firm.
  • Two-Part Procurement: Part 1 – The owner releases an RFQ and selects the two or three most qualified firms to receive the Part 2 RFP. Then, the owner reviews proposals submitted from the RFP and selects the most qualified firm.

DBB and PDB Side-by-Side Comparison on Six Points of Difference

Choosing the delivery method that’s right for your project depends on the project drivers, objectives and other factors important to you. Below is a side-by-side comparison of some of the pros and cons of DBB and PDB delivery.

1. Procurement and Selection Process

DBB Pros

  • Owners and staff are familiar with this common and well-established DBB procurement process.
  • Owner can choose their preferred designer to design the project and then the lowest-cost contractor to build it.
  • A large pool of contractors are willing to participate in DBB.

DBB Cons

  • Low bidder may not possess the qualifications needed to deliver a quality product with long-term value.
  • Requires separate contracts with the designer and the contractor, and owner responsible for their performance.
  • Timeline of DBB’s sequential three-phase procurement is longer than other delivery ­­methods.
  • If incoming bids are over budget, redesign and rebidding can lead to additional costs and project delays.

 

PDB Pros

  • Selection is based on most qualified design-builder.
  • Qualifications-based selection results in quality workmanship, lower maintenance costs and long-term value.
  • Contract is with single entity (design-builder) responsible for both design and construction, and accountable for performance, cost and schedule.
  • Simplified procurement with a shorter timeline than most delivery methods.

PDB Cons

  • Some owners and staff are unfamiliar with PDB procurement.
  • Owners have limited control over the firms under the design-builder.
  • Owner’s preferred designer may team with a less qualified contractor or vice versa.
  • A reduced pool of contractors willing to take on the risk in PDB could mean a saturated market where owners must be steadfast in driving interest among prospective design-builders.
  • Some owners are not prepared for the high-level of collaboration required with PDB, including the responsibility to make key decisions.

2. Risk Allocation

DBB Pros

  • Owner may find that risk level of project aligns with their appetite for risk.
  • Owner desires complete control over all aspects of the project.

DBB Cons

  • Owners carry maximum risk.
  • Owners bear construction risk including responsibility for any gaps between the design and construction. The owner must also resolve any issues between the designer and the contractor.
  • Constructability issues can result in costly change orders and delays.

PDB Pros

  • With PDB, owners typically allocate design and construction risks to the design-builder.
  • Shared risk incentivizes all parties to work as a cohesive team to achieve success.
  • Continuity of construction staff from design transition to the construction phase eliminates learning curve, increasing efficiency and reducing project risk.
  • If agreement on guaranteed maximum price (GMP) is not reached, owner can off-ramp before Phase 2 and bid out construction under DBB delivery.

PDB Cons

  • If owner takes the off-ramp during GMP negotiations, the project will be delayed with the time it takes to bid construction to a different contractor and bring them up to speed.
  • Additionally, if bid out as a DBB, the owner takes back all the risk previously allocated to the design-builder.

3. Schedule

DBB Pros

  • If there is no time driver (e.g., regulatory requirement) and the project is straightforward, DBB could be cost effective.

DBB Cons

  • Lengthy project duration due to linear sequence of work (longest of all delivery methods).
  • Sequential procurement can lead to delays as design must be completed before construction begins.

 

PDB Pros

  • PDB compresses the project timeline by overlapping design and construction phases, early work packages and phased activities.

PDB Cons

  • While the PDB model is used to expedite project delivery, should a project be off-ramped, the schedule will most likely be delayed.

4.Price/Schedule Certainty and Price Transparency

DBB Pros

  • Initial construction bid price is known in Phase 2.
  • Contractor is selected based on lowest bid price.

DBB Cons

  • Price is typically closed-book and not open to owner review of line items. It is also locked in during the RFP phase.
  • Final price can escalate from initial bid price during construction. Constructability issues, due to lack of contractor involvement with design, are common, resulting in change orders and potential delays.
  • DBB’s sequential design and construction prevents early procurement of long-lead items to mitigate supply chain issues and cost volatility, putting the schedule and budget at risk.

PDB Pros

  • GMP development is open-book and transparent. Owner has a high level of involvement in discussions about estimates.
  • Estimate is developed gradually throughout design increasing accuracy. GMP is negotiated during Phase 1 when designs are 60% to 90% complete.
  • Proposed GMP can be adjusted through value engineering to meet owner’s budget and technical needs.
  • Concurrent design and construction enables early procurement of long-lead items to mitigate cost volatility and supply chain issues.

PDB Cons

  • Price is not known until end of Phase 1 when GMP is negotiated between owner and design-builder.

5. Collaboration (Owner, Contractor, Designer)

DBB Pros

  • Owner collaborates with designer in Phase 1.
  • Conflicts between designer and contractor are avoided in Phase 1 because contractor is not involved until Phase 2 when design is complete.
  • Owner acts as liaison between designer and contractor in Phase 3 working out constructability issues or disputes.

DBB Cons

  • Constructability issues can occur due to lack of design input from contractor, which can result in costly change orders and potential schedule delays.
  • Owner is not involved in subcontractor and supply procurement, where owner input may enhance selection process.

PDB Pros

  • High level of collaboration between owner, designer and contractor resulting in design that is construction-focused, reducing risks and increasing constructability.
  • Early collaboration fosters mutual trust and alignment on project goals.
  • Owners have input with subcontractor and supply procurement.

PDB Cons

  • Due to collaborative process, owner has less control over design.

6. Design Flexibility, Innovations and Alternatives

DBB Pros

  • There is design flexibility in Phase 1 prior to contractor involvement and pricing.

DBB Cons

  • Design creativity does not always translate into a constructable design.
  • Design alternatives with cost-benefit analysis are not available for consideration and comparison as cost is already determined.
  • Design changes made during construction can impact cost and schedule.

PDB Pros

  • Contractor’s lessons learned with technology installations, innovation and implementation of management techniques can reduce design risks and support on-time delivery.
  • Constructability issues and design changes are resolved during the design/preconstruction phase when they are more cost effective than during construction.
  • Alternatives are presented to owner with a cost-benefit analysis for consideration before price is determined.
  • Value engineering can result in fulfillment of owner wish-list items and cost-effective enhancements beyond the owner’s initial concept, achieving functional, budget and aesthetic goals in addition to schedule reduction.
  • Design and cost estimates progress concurrently, which gives owner the flexibility to make design adjustments. Design cost estimates are presented at 30%, 60% and 90%.

PDB Cons

  • Owners have less control over design compared to DBB.

Summary of Factors to Consider when Choosing DBB or PDB

Factors that favor DBB delivery

  • Project is small and/or not complex.
  • Project is similar in scope to other projects owner successfully delivered via DBB.
  • Project can be bid out to a contractor using existing prescriptive specifications.
  • There is adequate time to complete the project.
  • Owner wants complete control over all aspects of the project.
  • DBB is legally mandated or collaborative delivery models are not permitted.
  • Selecting the lowest initial price is the primary objective of the selection process.

Factors that favor PDB delivery

  • Project requires expedited delivery.
  • Project is complex or scope is new to the owner.
  • Owner wants to allocate risks to the design-builder.
  • Owner desires value engineering and alternatives with cost-benefit analysis.
  • Owner seeks a high level of collaboration with designer and contractor from planning through commissioning.
  • Owner wants open-book pricing and transparent GMP development.
  • Owner has experienced change orders that escalate final price and cause delays and seeks greater cost/schedule certainty.

Taking time to learn about the pros and cons of various delivery methods can help owners decide which would be of the greatest benefit to their projects. For large, complex projects, facility owners are looking beyond DBB into methods like PDB, design-build (DB), construction-manager-at-risk (CMAR) and public-private-partnerships (P3) that can create more value. If you would like to learn more about the benefits of PDB, please see, “10 Benefits of Progressive Design-Build for Water and Wastewater Utility Owners.”