Construction project delivery methods define how projects are designed, bid, and built. Each method establishes different relationships between owners, designers, and contractors, creating unique opportunities and challenges for all parties.
This comprehensive guide compares major project delivery methods to help contractors understand where they fit and how to succeed in each approach.
Overview of Delivery Methods
The construction industry uses several primary delivery methods, each with distinct characteristics.
Summary Comparison
| Method | Single Point Responsibility | Price Competition | Early Contractor Involvement | Owner Design Control | |--------|---------------------------|-------------------|----------------------------|---------------------| | Design-Bid-Build | No | Maximum | None | Maximum | | Design-Build | Yes | Moderate | Maximum | Limited | | CM at Risk | No | Moderate | High | High | | CM Agency | No | Maximum | High | Maximum | | IPD | Shared | Minimal | Maximum | Shared |
Design-Bid-Build (DBB)
The traditional approach separating design and construction.
How It Works
Phase 1: Design
- Owner hires architect/engineer
- Complete design documents prepared
- Owner reviews and approves design
Phase 2: Bid
- Owner solicits competitive bids
- Contractors bid on complete documents
- Typically lowest responsive bidder wins
Phase 3: Build
- Selected contractor executes work
- Designer provides construction administration
- Owner manages separate contracts
Contractual Relationships
- Owner-Designer contract (design services)
- Owner-Contractor contract (construction)
- No direct Designer-Contractor contract
Advantages
For Owners
- Maximum price competition
- Complete design before commitment
- Independent design perspective
- Clear accountability separation
- Well-understood process
For Contractors
- Complete documents for bidding
- Limited design liability
- Clear scope definition
- Price-based competition
- Established practices
Disadvantages
For Owners
- Sequential timeline (longer)
- Limited contractor input on design
- Owner coordinates parties
- Design-construction conflicts possible
For Contractors
- No influence on design
- Design errors impact construction
- Strictly price-driven selection
- Adversarial potential
Best Applications
- Well-defined, standard projects
- Maximum price competition required
- Public projects with bidding requirements
- Projects where design control is paramount
Design-Build (DB)
Single-source responsibility for design and construction.
How It Works
Selection Phase
- Owner defines project requirements
- Design-build teams submit proposals
- Selection based on qualifications and/or price
Design Phase
- Design-builder develops design
- Owner provides input and approval
- Construction planning concurrent
Build Phase
- Design-builder constructs project
- Single point of responsibility
- Integrated team execution
Contractual Relationships
- Single Owner-Design-Builder contract
- Design-builder contracts with designers and subcontractors
- Owner deals with one entity
Advantages
For Owners
- Single point accountability
- Faster project delivery
- Contractor expertise in design
- Reduced coordination burden
- Better cost certainty potential
For Contractors
- Control over design decisions
- Early project involvement
- Qualifications-based selection possible
- Stronger owner relationships
- Design-construction integration
Disadvantages
For Owners
- Less design independence
- Harder to compare proposals
- More complex procurement
- Reliance on single entity
For Contractors
- Design liability exposure
- Higher pursuit costs
- Need design capabilities
- Greater overall risk
Best Applications
- Fast-track schedules
- Performance-based requirements
- Complex projects benefiting from integration
- Owners wanting single responsibility
- Projects where innovation adds value
Construction Manager at Risk (CMAR)
Early contractor involvement with guaranteed maximum price.
How It Works
Preconstruction Phase
- Owner hires CM early in design
- CM provides estimating, scheduling, constructability input
- Designer continues independent design
- CM develops Guaranteed Maximum Price (GMP)
Construction Phase
- CM constructs project
- Holds trade contracts
- Manages construction process
- Owner retains design contract
Contractual Relationships
- Owner-Designer contract (design)
- Owner-CM contract (preconstruction and construction)
- CM-Subcontractor contracts (trade work)
Advantages
For Owners
- Early contractor expertise
- GMP price certainty
- Independent design maintained
- Better coordination than DBB
- Collaborative approach
For Contractors
- Early involvement and influence
- Preconstruction fee revenue
- Relationships before bidding
- Less price-only competition
- Construction management role
Disadvantages
For Owners
- Less price competition than DBB
- Must select CM early without competition on construction
- Managing two prime contracts
For Contractors
- Open book pricing requirements
- GMP risk if design incomplete at commitment
- Preconstruction investment without guarantee
- Trade contractor management burden
Best Applications
- Complex projects needing early input
- Schedules requiring design-construction overlap
- Projects with budget constraints needing GMP
- Owners wanting collaboration with design control
- Healthcare, education, complex facilities
Construction Manager as Agent (CM Agency)
Owner's representative managing construction without holding contracts.
How It Works
Throughout Project
- CM provides management services as owner's agent
- CM advises on design, bidding, construction
- Trade contractors contract directly with owner
- CM coordinates and manages without risk position
Contractual Relationships
- Owner-Designer contract
- Owner-CM contract (advisory/management services)
- Owner-Trade Contractor contracts (multiple)
- CM has no contracts with trades
Advantages
For Owners
- Maximum competition (direct trade bidding)
- Expert project management
- Control over all contracts
- Transparency in costs
- Independent advice
For Contractors
- Trade contractors contract direct with owner
- No prime contractor markup
- Direct owner relationships
- Transparent processes
Disadvantages
For Owners
- Many contracts to manage
- CM not at risk for performance
- Coordination responsibility remains with owner
- No single point of accountability
For Trade Contractors
- Direct owner contract obligations
- Multiple-prime coordination challenges
- No GC support structure
Best Applications
- Sophisticated owners with contract capacity
- Maximum transparency requirements
- Public projects wanting competition with management
- Phased construction with multiple bid packages
Integrated Project Delivery (IPD)
Multi-party agreement with shared risk and reward.
How It Works
Formation
- Owner, designer, and contractor enter multi-party agreement
- Shared risk pool and profit contingency
- Collaborative governance structure
Execution
- All parties involved from project start
- Decisions made collaboratively
- Shared financial incentives
- Target cost drives behavior
Contractual Relationships
- Multi-party agreement (Owner, Designer, Contractor)
- Additional parties may join agreement
- Shared risk and reward provisions
- Collaborative decision-making structure
Advantages
For Owners
- Full team alignment on outcomes
- Innovation incentivized
- Reduced adversarial relationships
- Better problem-solving
- Shared commitment to success
For Contractors
- True partnership model
- Shared upside potential
- Collaborative environment
- Early involvement
- Reduced confrontational risk
Disadvantages
For Owners
- Complex contracting
- Limited competitive pricing
- Requires cultural commitment
- Dependent on relationship quality
For Contractors
- Shared downside risk
- Transparency requirements
- Cultural adjustment needed
- Limited contractor pool
Best Applications
- Complex projects requiring integration
- Owners committed to collaboration
- Repeat relationships between parties
- Projects benefiting from innovation
- Healthcare and complex facilities
Choosing the Right Method
Selection depends on multiple factors.
Owner Considerations
Project Characteristics
- Complexity and scope definition
- Schedule requirements
- Budget constraints and certainty needs
- Innovation requirements
Owner Capabilities
- Project management capacity
- Contract administration resources
- Risk tolerance
- Experience with methods
External Factors
- Procurement regulations
- Market conditions
- Available contractors and designers
- Political or stakeholder considerations
Contractor Positioning
Assess Your Capabilities
- Design capabilities or partnerships
- Preconstruction expertise
- Risk management capacity
- Relationship building skills
Strategic Positioning
- Develop capabilities for growing methods
- Build relationships that enable selection
- Pursue opportunities aligned with strengths
- Expand into new delivery methods thoughtfully
Market Trends
Understanding trends helps strategic planning.
Growing Methods
Design-Build
- Fastest growing method
- Now approximately 45% of market
- Strong public sector adoption
- Continuing growth projected
CM at Risk
- Significant and stable share
- Popular for complex projects
- Especially strong in healthcare, education
- Valued for preconstruction input
Stable Methods
Design-Bid-Build
- Approximately 40% of market
- Required by many public entities
- Strong in straightforward projects
- Maximum competition valued
Emerging Methods
Integrated Project Delivery
- Small but growing share
- Strong in healthcare construction
- Requires cultural commitment
- Innovation-focused owners adopting
Frequently Asked Questions
Which delivery method is best?
No method is universally best. The optimal choice depends on project characteristics, owner goals, and market conditions. Each method has appropriate applications.
Can contractors work in multiple delivery methods?
Yes. Many successful contractors work across methods, adapting their approach to each. Developing capabilities in multiple methods expands opportunities.
How do I get into design-build without experience?
Partner with design firms for initial projects, pursue smaller design-build opportunities to build track record, or consider acquiring or developing design capabilities.
What's driving the growth of design-build?
Schedule compression needs, desire for single-point responsibility, successful project outcomes, and public sector adoption of enabling legislation all drive design-build growth.
How does delivery method affect subcontractors?
Subcontractors typically work for the general contractor or CM regardless of delivery method. However, IPD may include key subcontractors in the multi-party agreement. CM Agency creates direct owner contracts.
Conclusion
Understanding project delivery methods positions contractors for success across the construction market. Each method offers distinct opportunities for contractors who develop appropriate capabilities and relationships.
Evaluate your firm's strengths, assess market trends, and strategically develop capabilities in delivery methods aligned with your goals. Flexibility across methods expands your opportunity set and strengthens competitive positioning.
Ready to find opportunities across all delivery methods? Try ConstructionBids.ai free to discover projects matched to your capabilities and start growing your pipeline today.
