A Tale of Two Projects: Two nearly identical projects with two different delivery methods demonstrate the benefits of using a collaborative delivery method
The Crossland Heavy Contractors team had the rare opportunity to compare the effects of two different delivery methods on an identical treatment structure. We recently completed renovations at a single plant twice—the first treatment train was renovated using the traditional design-bid-build (hard bid) method and then several years later the second treatment train was renovated using progressive design-build, which provided some valuable insights.
Project #1: Traditional Design-Bid-Build (Hard Bid) Method
In October 2016, Rogers Water Utilities (RWU) in Rogers, Arkansas, hired Olsson to design a rehabilitation project for its first Bardenpho treatment train. The scope included dewatering and sediment removal of the aeration basin, concrete reinforcement and repair, equipment replacement, electrical work, waterproofing, epoxy coatings, and guardrail and handrail replacement. The owner procured this project using the traditional design-bid-build method and awarded it to the lowest bidder, Crossland Heavy Contractors (CHC), in 2017. The total cost for this project, including engineering fees, was $2.04 million.
Project 1 Challenge:
This project posed a unique challenge due to the uncertain condition of the aeration basin, which could only be fully determined once construction began. The design team had no way of knowing the necessary repair work that would be needed and did not account for such in the original budget. There were many overruns on the concrete repair due to these unforeseen conditions. The total contract was 660 days.
Project #2: Progressive Design-Build Method
Two years later, the same owner was eager to take advantage of Arkansas’s new procurement laws that enabled the use of innovative delivery methods like progressive design-build (PDB) and construction management at-risk (CMAR) for public water and sewer projects. This time around, the owner chose the PDB delivery method.
After a two-step qualifications-based selection process, in January 2020 the owner selected the same PDB team.
Same team, same project, different approach. Here are some takeaways:
It’s important to note that the scopes of the projects were slightly different. The second project required additional equipment and electrical upgrades for the oxidation ditch aerator and re-air mixer for both treatment trains. The upgrades raised the project cost over the minimum $2 million budget required by Arkansas statute to use collaborative procurement methods.
See the table below for the two project and delivery method comparisons.
|Cost Comparison Highlight||Traditional Design-Bid-Build||Progressive Design-Build|
|Concrete containment curbs||$23,945.00||$26,446.00|
|Key equipment replacement||$228,053.00||$221,253.00|
|Concrete crack repair||$67.50/LF||$45.00/LF|
|Concrete scour repair||$44.88/LF||$18.00/SF|
|Structural concrete repair||$114.40/SF||$101.60/SF|
|Change orders processed||17||0|
Due to significant scope increases, along with the impact of COVID-driven inflation factored in, it’s no surprise that cost went up between the span of the two projects—from $2.04 million to $4.64 million.
However, one stand-out benefit of the collaborative delivery method was the shortened timeline. Using the PDB delivery method, the construction team could perform up-front work during preconstruction, cutting down on unforeseen challenges that could potentially stall the schedule.
Progressive Design-Build Project Benefits:
- Leveraging the preconstruction phase allowed CHC to clean out the basin before the project was 100% designed to ensure any repairs were accounted for and to eliminate overruns of concrete rehabilitation items during construction.
- Early collaboration enabled the team to discuss alternative materials and processes, which resulted in cost savings, bringing the best value to the overall project.
- Bidding the project at 60% designed rather than 100% allowed for an early guaranteed maximum price (GMP) execution, saving time on the schedule.
- Construction began at 90% design, which gave CHC the opportunity to procure long-lead-time process equipment and begin the structure rehabilitation earlier than a DBB project would allow.
The construction phase phase lasted longer on Project 2 due to the increased equipment lead times and COVID delays. However, since construction began during the design phase, the overall timeline was shortened.
Not only does PDB allow for expedited timelines and risk reduction, but it also reduces administrative tasks for the owner, including the following:
|Contract Highlights||Traditional Design-Bid-Build||Progressive Design-Build|
|Contracts||1 for designer|
1 for contractor
|1 for design-builder|
|Change orders||17 change directives||0 GMP change orders|
|Contingency||Used for contractor only||Remaining $$ is returned to owner|
Project 1: Traditional Design-Bid-Build Method
Through underruns, CHC saved the client almost $30,000, but the owner had to take on the administrative burden of processing 17 change orders and getting them approved by the council throughout the project duration.
Project 2: Progressive Design-Build Method
This open-book and transparent process gave the owner peace of mind throughout the project. In the end, there was nearly $200,000 in contingency remaining, which went back into the owner’s hands to be used for “wish list items” and miscellaneous improvements that were not in the original scope.
Every owner should evaluate the needs of its specific project to determine which delivery method fits its needs best. However, there are major benefits shown to using a collaborative method like PDB, such as the following:
- Ease of contracting
- Peace of mind through open-book cost transparency
- Schedule expediency
- Elimination of change orders
- Collaborative working relationship among all parties
- Transfer of risk from the owner to the design-builder