• Clear separation between design and construction
  • Designer (may be internal staff or third-party consultant) prepares construction documents
  • Contractor bids on 100% complete plans and specifications
  • Award is typically to the lowest responsible and responsive bidder
• Design and construction are performed in sequence and do not overlap
• Owner has full control over design and bears design risk
• Contractor has little opportunity to offer input into the design process

• Low bid
• Best value (less commonly used)

• Unit price
• Cost reimbursable

• Traditional delivery method that is well-understood and well-accepted by owners and industry
• Provides owner with maximum design control
• Promotes high competition among contractors
• Offers the lowest initial price that responsible, competitive bidders can offer
• Extensive litigation has resulted in well-established legal precedents

• Separation of design and construction contracts can create adversarial relationships between the parties (different agendas and objectives)
• Owner bears risk of design adequacy/errors
• No contractor involvement in design or planning
• Designers may have limited knowledge of the true cost and scheduling and phasing ramifications of design decisions
• No opportunities for time savings by fast-tracking construction
• Greater potential for errors and omissions, change orders, delays, and other adverse outcomes
• Tends to yield base level quality

• Projects requiring a high degree of owner control that can be designed to or near 100% completion
• Projects that lack schedule sensitivity
• Lowest initial cost is the primary driver
• Third-party risks and unknowns are best managed by the owner

• Owner engages a construction manager (CM) early in the design phase (e.g., at 15%–30% design)
• The designer and the CM hold separate contracts with the owner (alternatively, design services may be provided by the owner’s internal staff)
• CM acts as a construction advisor during the design phase and as a general contractor during the construction phase
  • CM performs “preconstruction services,” including cost estimating, scheduling, and constructability reviews
  • CM contracts directly with trades and assumes performance risk for cost and schedule
• Design and construction phases may overlap, allowing for the completion of early work packages

• Qualifications-based selection
• Best value (considering the CM’s qualifications and proposed fees)

• Cost reimbursable
• Guaranteed maximum price

• Enables early CM input into design and constructability issues
• Allows owner to retain significant control and influence over design, phasing, and buyout decisions while allowing for CM to provide innovation and constructability recommendations during design
• Enhances understanding and transparency of risks related to cost and schedule
• Provides opportunities to complete design-enabling or early work packages, potentially compressing the overall project schedule

• Two contracts to manage:
  • Disagreements between designer and contractor flow through the owner
  • Potential for adversarial relationships
• Owner bears risk of design adequacy
• Added costs for CM fees during preconstruction (though potentially offset by savings via early collaboration)
• Deriving value from a CM’s participation during the design/preconstruction phase can be challenging to first-time users
• Project price is negotiated and not competitively bid (with the possible exception of trade and subcontracts)

• Projects having a high potential for unknown or poorly defined risks that would benefit from the collaborative involvement of the owner, designer, and CM to mitigate risks
• Projects entailing complex phasing or staging, with the possibility of impacting operations or the traveling public
• Projects in which the design is complex, difficult to define, and subject to change

• Owner contracts with a single legal entity to complete the design and construction of a project
• Several design-related risks shift to the design–builder
• Design and construction phases may overlap
• In contrast to progressive DB:
  • Owner must fully define project scope of work and performance criteria to support procurement process
  • Design–builder typically commits to a fixed price (lump sum) at the time of selection (i.e., before final design is complete)
  • Typically, a single contract is executed for design and construction phase services

• Best value (with selection based on qualifications/technical merit and fixed price to deliver the DB scope)
• Low bid (used for noncomplex, standardized designs for which innovation is not sought)

• Lump sum (possibly with allowances or unit cost items to address risk)

• Provides single point of responsibility for design and construction
  • Minimizes adversarial disputes between designer and contractor
  • Creates opportunities for efficient risk transfer
  • Reduces change orders and claims related to errors and omissions
  • Requires less management and coordination by owner
• Enables accelerated delivery by fast-tracking design and construction
• Promotes enhanced constructability—design can be optimized to contractor’s strengths, potentially leading to time and/or cost savings
• Provides earlier schedule and cost certainty (fixed-price DB)

• Locking in lump-sum prices early may result in higher contingency or risk pricing
• Limited collaboration occurs between owner and design–builder during development of design and cost proposal
• Owner incurs additional costs for project criteria development and possibly stipends for unsuccessful proposers
• Ability to fast-track construction may be limited by permitting agencies requiring more complete designs
• Potential to reduce opportunities for smaller, local construction firms
• Coordination can be challenging for owners unaccustomed to the fast-paced nature of a DB project
• Owner and stakeholder interests may be underrepresented

• Projects that would benefit from an expedited or compressed schedule
• Early cost certainty is desirable
• Projects that do not entail complex phasing or operational considerations
• Projects where the design and construction are tied to proprietary equipment or systems (such as with baggage screening and handling systems)
• Project scope can be adequately defined without 100% complete plans, specifications, and estimates
• Minimal third-party risks exist or can be effectively managed by the design–builder

• Design–builder is engaged very early in the life of the project (e.g., during programming phase)
• Final project cost and schedule commitment is not fixed at the time of the design–builder’s selection
• Design–builder and owner work collaboratively to validate basis of design and advance, or progress, toward a final design and associated contract price
• Design–builder delivers the project in two phases (for which two separate contracts may be executed):
  • Phase 1 (preliminary or preconstruction services), including pricing level design development, preconstruction services, and negotiation of a firm contract price for Phase 2
  • Phase 2, including final design, construction, and commissioning

• Qualifications-based selection
• Best value (with selection based on qualifications and design–builder’s fees)

• Guaranteed maximum price
• Cost reimbursable

• Enables the owner to bring the design–builder into the project very early in the programming or design phase, without having a fully validated basis of design
• Avoids the time and expense of the owner developing a set of baseline design documents to the level needed to obtain a fixed construction price from a design–builder during the procurement stage
• Allows the owner to collaborate with the design–builder as part of the design development process
• Reduces risk pricing and promotes more realistic pricing assumptions through a collaborative design development and open-book pricing process

• No cost certainty at the time of the design–builder’s selection
• Project price is negotiated and not competitively bid (construction price is negotiated following Phase 1 design development and preconstruction activities)
• Cost-estimating expertise needed during final cost negotiations to ensure a fair price is received

• Projects having a high potential for unknown or poorly defined risks that would benefit from the collaborative involvement of the owner and design–builder
• Projects entailing complex phasing and/or operational or stakeholder impacts that would benefit from ongoing owner/stakeholder input
• Major project risks can be mitigated by having the contractor and designer in a direct contractual relationship (in contrast to CMAR)

• Combines design and construction responsibilities with operations, maintenance, and financial responsibilities under a single contract
• Entails greater private-sector participation in the delivery, operation and financing of a project
• Variants of P3 delivery include:
  • Design–build–operate–maintain (DBOM)
  • Design–build–finance–operate–maintain (DBFOM)
  • Design–build–finance (DBF)

• Negotiation

• Postconstruction project revenues (e.g., user fees, parking revenue, rental fees, concession revenues, advertising or other business revenue and lease revenue)
• Availability payments
• Management fees

• Integrating the process of design, construction, operations and maintenance can enhance the maintainability of design solutions and provide a better approximation of life-cycle costs
• Can motivate the contractor to increase the quality of design and workmanship to help minimize future maintenance issues
• Can provide specialized expertise to operate and manage ancillary assets that are not part of an owner’s core mission

For P3 projects with a finance component:

• Allows for implementation of large projects that may otherwise be cost prohibitive

• Owner may give up control over design details and some aspects of operations and maintenance
• Procurement process can be time-consuming, costly, and complex
• Poor risk allocation can reduce cost efficiency and/or dissuade proposers

• Large or mega projects for which the owner may lack the financial capacity to execute the project
• Projects that will generate revenue
• Projects that are outside the owner’s core mission, for which it does not have the staff expertise to operate and maintain (e.g., consolidated rental car facilities, automated people movers)