Traditional design-bid-build isn't the only option. Alternative delivery methods offer different approaches to project execution, each with unique bidding processes and requirements. Understanding these alternatives helps contractors pursue appropriate opportunities.
Delivery Method Overview
Comparison Matrix
| Method | Design Responsibility | Risk Allocation | Selection Basis | |--------|----------------------|-----------------|-----------------| | Design-Bid-Build | Owner/A-E | Shared | Low bid | | Design-Build | Contractor | More to contractor | Best value | | CM at-Risk | Owner/A-E | Shared | Qualifications + fee | | Progressive D-B | Contractor | Collaborative | Qualifications | | IPD | Team | Shared | Qualifications |
Market Trends
Alternative delivery continues to grow:
- Design-build: ~45% of construction spending
- CM at-risk: Growing in public sector
- Progressive approaches: Increasing adoption
Design-Bid-Build (Traditional)
How It Works
- Owner hires architect/engineer
- Complete design before bidding
- Competitive bid on complete documents
- Award to lowest responsive bidder
- Contractor builds per plans
Bidding Characteristics
| Aspect | Description | |--------|-------------| | Selection criteria | Lowest responsive, responsible bidder | | Design completion | 100% before bid | | Pricing basis | Lump sum (usually) | | Competition focus | Price | | Contractor input | None during design |
When Used
- Public projects with low-bid requirements
- Clear, well-defined scope
- Minimal design complexity
- Standard construction types
Design-Build
How It Works
- Owner develops criteria/program
- Design-build teams compete
- Selected team provides design and construction
- Single contract for both services
- Integrated delivery
Bidding Process
Two-Step Selection:
Step 1: Qualifications/Shortlist
- Statement of qualifications
- Team composition
- Relevant experience
- Approach description
Step 2: Proposal
- Technical approach
- Preliminary design
- Project schedule
- Pricing (various formats)
- Interviews/presentations
Proposal Requirements
| Element | Description | |---------|-------------| | Technical proposal | Design approach, innovations | | Design narrative | How criteria will be met | | Project team | Key personnel, organization | | Schedule | Approach to timeline | | Price | Lump sum, GMP, or cost-plus |
Pricing Formats
| Format | Risk Distribution | |--------|-------------------| | Lump sum | Contractor bears more risk | | GMP | Shared risk with cap | | Cost-plus | Owner bears more risk |
Design-Build Success Factors
- Strong design partner relationship
- Integrated team approach
- Early engagement
- Clear communication
- Innovation capability
CM at-Risk (CMAR)
How It Works
- Owner selects CM based on qualifications
- CM provides preconstruction services
- CM develops GMP during design
- CM constructs as general contractor
- CM guarantees maximum price
Selection Process
Qualifications-Based Selection:
- Experience and capabilities
- Key personnel qualifications
- Approach to preconstruction
- Fee proposal
- Past performance
Evaluation Criteria:
| Criteria | Typical Weight | |----------|----------------| | Experience | 25-35% | | Key personnel | 20-30% | | Approach | 20-25% | | Fee | 15-25% | | References | 5-10% |
Fee Components
| Component | Description | |-----------|-------------| | Preconstruction fee | Fixed fee for preconstruction services | | Construction fee | Percentage or fixed for CM services | | General conditions | Reimbursable or within GMP | | Contingency | Within GMP for unknowns |
GMP Development
The Guaranteed Maximum Price is developed during design:
GMP Development Timeline:
- 30% design: Conceptual estimate
- 60% design: Refined estimate
- 90% design: GMP proposal
- 100% design: Final GMP
Trade Contractor Bidding
CM at-risk typically involves:
- Public bid of trade packages
- Multiple bid packages by trade
- CM coordination of bid process
- Transparent pricing to owner
Progressive Design-Build
How It Works
- Select D-B team based on qualifications
- Collaborative design development
- Progressive pricing as design advances
- Owner/contractor agree on price at milestone
- Proceed to construction
Selection Process
Focus on Qualifications:
- Team capability and chemistry
- Approach to collaboration
- Innovation potential
- Past performance
Fee Proposal (Not Lump Sum):
- Preconstruction fees
- Construction overhead percentage
- General conditions approach
- Contingency methodology
Progressive Pricing
| Phase | Deliverable | |-------|-------------| | Validation | Budget confirmation | | 30% design | Refined estimate | | 60% design | Target budget | | 90% design | Final price proposal |
Best Suited For
- Complex projects
- Uncertain scope
- Innovation-driven projects
- Owner values collaboration
- Budget flexibility exists
Integrated Project Delivery (IPD)
How It Works
- Multi-party agreement
- Shared risk and reward
- Collaborative design and construction
- Integrated team decision-making
- Pain/gain sharing
Team Structure
| Party | Role | |-------|------| | Owner | Client, decision-maker | | Architect | Design leadership | | Contractor | Construction expertise | | Key trades | Specialty input |
Compensation Model
Shared Risk/Reward:
- Cost of work reimbursed
- Profit at risk based on outcomes
- Incentive pools for performance
- Pain/gain sharing mechanism
Selection Considerations
Team Chemistry Critical:
- Collaborative history
- Aligned values
- Communication capability
- Conflict resolution approach
Contractor Responsibilities by Method
Comparison of Roles
| Activity | D-B-B | D-B | CMAR | IPD | |----------|-------|-----|------|-----| | Design | None | Lead | Assist | Collaborate | | Estimating | Bid only | Continuous | Progressive | Team-based | | Value engineering | Post-bid | Integrated | During design | Continuous | | Subcontractor selection | Contractor | Contractor | Often bid | Team input | | Risk | Construction | Design + Construction | Construction | Shared |
Proposal Strategies by Method
Design-Bid-Build
Focus On:
- Accurate, competitive pricing
- Complete scope coverage
- Clear exclusions/clarifications
- Qualification compliance
Design-Build
Focus On:
- Technical innovation
- Team qualifications
- Design quality
- Value propositions
- Competitive pricing
CM at-Risk
Focus On:
- Preconstruction value
- Team chemistry
- Cost control approach
- Transparency
- Fee competitiveness
Progressive/IPD
Focus On:
- Collaboration capability
- Innovation approach
- Team integration
- Past partnership success
- Aligned values
Qualification Requirements
Common Requirements All Methods
| Requirement | Purpose | |-------------|---------| | Relevant experience | Demonstrate capability | | Financial strength | Ensure viability | | Safety record | Protect project | | Bonding capacity | Guarantee performance | | Key personnel | Ensure qualified team |
Additional for Design-Build
| Requirement | Purpose | |-------------|---------| | Design partner qualifications | Ensure design capability | | Integrated team experience | Demonstrate collaboration | | Professional licensing | Legal compliance | | Design liability insurance | Risk protection |
Selection Criteria Comparison
Typical Weightings
| Factor | D-B-B | D-B | CMAR | |--------|-------|-----|------| | Price | 100% | 30-50% | 15-25% | | Technical/qualifications | Pass/fail | 30-40% | 40-50% | | Experience | Pass/fail | 15-25% | 25-35% | | Key personnel | Limited | 10-15% | 15-20% |
Choosing Which to Pursue
Self-Assessment Questions
| Question | Implication | |----------|-------------| | Do we have design capability? | D-B requires design partnership | | Can we provide preconstruction? | CMAR needs these skills | | Are we collaborative? | IPD/Progressive need team players | | Is our strength just building? | D-B-B may be best fit |
Market Positioning
For Each Method:
- Build track record
- Develop appropriate partnerships
- Invest in capabilities
- Position with owners
Related Articles
- Design-Build Bidding Process Guide
- How to Write Winning Construction Bid Proposals
- Pre-Qualification Requirements for Government Contracts
Frequently Asked Questions
Which delivery method is growing fastest? Design-build continues to grow and now represents nearly half of non-residential construction spending. Progressive design-build is also gaining traction.
Can small contractors pursue design-build? Yes, but typically through partnership with design firms. Small contractors can be effective design-build partners on appropriately sized projects.
How does insurance differ for design-build? Design-build requires professional liability insurance to cover design responsibilities, in addition to standard contractor coverages.
Is CM at-risk more profitable than hard bid? Potentially, as fees are negotiated rather than competitively bid. However, the GMP creates price accountability and profit depends on execution.
How do I transition from D-B-B to alternative methods? Start with smaller projects, build design partnerships, develop preconstruction capabilities, and market your expanded services to appropriate owners.
