Progressive Design-Build – A Brief Overview
- Single design and construction package where the Contractor performs both the design and construction in an integrated manner; but compared to a fixed-price design-build (DB): (1) progressive design-build (PDB) Contractor may be engaged earlier and will negotiate the construction price later in the design process; and (2) the Owner, together with any interfacing contractors, is more involved in the design development
- Pre-construction: Design development; collaborative working groups; risk management; progressive build-up of construction schedule and cost, typically on a Guaranteed Maximum Price (GMP) or Firm Fixed Price (FFP) basis, when an acceptable level of design (typically 65–95%) is achieved
- Final design and construction: Final design and construction
Progressive Design-Build – Advantages and What it Does Well
- Greater involvement in the development of the design
- Owner has greater involvement than under a fixed price design-build and there is greater opportunity for incorporation of preference comments, not just compliance comments, but the Contractor still retains overall responsibility for design and construction
- In affordability-constrained projects, the Owner and the Contractor work together to identify value engineering opportunities
- Ability for the Contractor to work with the Owner to optimize and agree to the schedule concurrent with design development and before agreeing to the price – also enables flexibility to account for any delays in any Owner-retained responsibilities, for example, site access
- Similar to a fixed price design-build, offers opportunities for design innovation
- Similar to the Construction Manager/General Contractor (CM/GC) delivery method, offers opportunities to accelerate schedule through early works packages
- Compared to a fixed price design-build, the risk allocation and construction pricing is negotiated and agreed when the risks are better understood and design is further developed – reducing contingency pricing
- Compared to a fixed price design-build, the construction pricing is negotiated and agreed closer to the time of construction – again reducing contingency pricing
Progressive Design-Build – Challenges and Lessons Learned
- Construction pricing is negotiated after Contractor selection
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Risk that an Owner has to exercise an off-ramp if agreement cannot be
reached on construction terms and pricing and risk of delay
- This risk is heightened in a PDB compared to a CM/GC due to the Owner not controlling the design, although there are mitigations that can be incorporated into the contract terms
- Similar to CM/GC, the PDB delivery method is resource intensive for the Owner
- Until recently, this delivery method has been traditionally utilized in the US for water/utility/vertical build projects – signs of increasing use in the transportation sector but it is a relatively immature market, with projects under implementation but not yet successfully completed
- As with a design-bid-build or CM/GC, the Contractor's focus is on the constructability of the designs and the construction means and methods, rather than lifecycle cost, long term maintainability and asset renewal – it is up to the Owner to work with its Contractor during design development to ensure that the designs and the construction means and methods meet their lifecycle cost and long-term O&M objectives
Progressive Design-Build – Summary: When to use this Delivery Method
Progressive Design-Build – When is it typically used
- Contracts where there is opportunity or need (for example, due to affordability constraints) for value engineering and innovation in design, in addition to construction means and methods.
- Contracts where there is a high degree of unknown risk or uncertainty at the time of procurement.
- Contracts where there is design complexity and the Owner wants to transfer that risk to the Contractor but the Owner also wants / needs to retain involvement in design development (for example, to manage interfaces).
Progressive Design-Build – When is it not suitable
- Contracts where Owner needs specific design, such as an extension or redevelopment of a legacy project.
- Where private financing is required.
- For a straightforward project with clear scope and minimal risk of changes (i.e., sufficient certainty to benefit from competitive fixed-price proposals).
Explore Progressive Design-Build in more depth
Members will soon gain access to detailed Progressive Design-Build statutes, procurement examples, and case studies from current transportation projects.
Legal Disclaimer: The information included in this Online Resource Center is summary information provided as an introduction to the delivery methods referenced. It does not constitute legal advice and is not intended to provide a comprehensive review of the delivery methods nor the related law and practice, nor is it intended to cover all aspects of each delivery method referred to. Please take legal advice before applying anything contained in these materials to specific issues or transactions. If you are a member and would like more information, please reach out to CALINFRA to enquire about scheduling a training session.