Tradition is Overrated

A Southern California City Decides that Design-Build is the Better Approach for Constructing Fire Stations.

Photo Caption: The Vista (Calif.) Fire Department built the 11,300-square-foot Station No. 6 using the design-build method.

For years the state of California, like most other government entities across the country, has completed construction projects using the traditional design-bid-build procurement process. This approach has been used to construct roads, freeways, hospitals, public buildings, correctional facilities, universities and other state-owned public works projects. In the early 1990s, however, the state began to experiment, accomplishing construction work using a new delivery method called design-build. Proponents of design-build believe that it is the way of the future. Recently, California state and local agencies have been granted broad authority to utilize this new delivery method on public-works projects, including fire stations.

Design-build is quite different from the traditional design-bid-build approach. The latter is a sequential process in which the owner first contracts with the design professionals to prepare detailed plans and specifications, then uses the plans and specifications to solicit competitive bids for the project’s construction. Award of a construction contract is then made to the bidder that offers the lowest price.

However in design-build, one entity is contractually responsible for both design and construction under a single contract. Contracts still are awarded through a competitive process, but the process does not limit the selection criteria to the lowest price. This allows owners to consider other factors in addition to price, such as experience, financial stability and performance on prior projects. The end result of this process is a team that works to collectively satisfy the project goals, with each party bringing their past experiences and expertise to the table.

Vista Decides to Build

Located just eight miles inland from the Pacific Ocean in northern San Diego County, the Vista Fire Department realized that maintaining desirable emergency response times was becoming increasingly difficult. With more than 25 educational institutions, a business park that is home to more than 850 companies, and a growing population of more than 120,000 residents occupying roughly 36 square miles, city leaders concluded that two new fire stations were required in order to support their growing community.

To fund the proposed construction projects, voters approved a half-cent sales tax increase in April 2007. Then, after looking at other successful public works projects, the city determined that design-build was the best delivery method for the project. Indeed, this approach brought significant value to many areas of the design-and-construction process.

In a traditional design-bid-build project, the owner first hires an architect, who then completes the design. Once the design is complete the project is put out to bid. Bid day usually consists of the owner and architect holding their breath, crossing their fingers and hoping that a qualified contractor will be the lowest bidder. This is truly a roll of the dice. Occasionally a highly qualified contractor will be the lowest bidder. However, it is not difficult to find examples of fire station construction where the lowest bidder was an inexperienced contractor who underbid the project just to stay busy. Depending on who the low bidder is, the headaches may just be starting for the owner and the design team.

When hiring personnel, employers make their selections based on the most qualified candidate whose skills best match the job. The chosen candidate is not necessarily the one that is willing to do the job for the lowest price. Generally, qualifications-based selection has been accepted practice for years when hiring design professionals.

It makes sense to follow this same approach when selecting a contractor. The selection should be based on a series of parameters that ensures the contractor is the most-qualified candidate to construct the project. In the case of Vista’s proposed fire stations, the design-build process allowed the contractor’s experience, reputation, financial stability and existing relationships to all be considered and evaluated.

Collaboration is Critical

Regardless of a fire-station project’s delivery method, a good architectural firm will follow a series of steps when designing a new project. The architect will start by gaining a clear understanding of the project goals, schedule and budget, and will be involved throughout construction for quality-control purposes.

In the traditional design-bid-build delivery method, the architect typically works directly with the owner to develop a program and then puts various schematic plan options together for review. These schematic concepts are assessed to verify that all of the desired fire department program functions and needs are being addressed. After the owner and fire department approve the concepts, work on the final construction documents begins.

Photo Caption: Both Vista stations feature bi-fold doors in their drive-through apparatus bays.

However, in the design-build approach the design concepts continue to evolve because there are additional experienced partners sitting at the table throughout the entire process. Architects often spend considerable design effort figuring out ways to avoid contractor claims and change orders. Design-build works on the fundamental concept that change orders can be reduced significantly if the contractor understands the project goals earlier — this is accomplished by making him responsible for the design. Having the contractor involved early on the Vista project allowed the design team to capitalize on the contractor’s experience, as well as that of his major subcontractors. This particularly was valuable when dealing with unique design solutions or when faced with unique schedule, budget or site constraints. This collaborative effort helped ensure that the project was not only on budget but could be constructed with minimum complications.

A big challenge for any project is ensuring that the owner’s wish list can be accommodated within the proposed project budget. Experience shows that projects that fail to meet the budget rarely are considered successful.

In the traditional design-bid-build process, the architect often is asked to play the role of cost estimator. While architectural firms that specialize in certain project types can be reasonably good at this exercise, architects typically have no formal training in cost estimating. Given the volatility of the construction market today, this can be a real challenge. Recent economic conditions have caused the cost of some basic building materials (masonry, steel, lumber and copper, for example) to fluctuate 10% or more in a month. This means that it can be a tough guessing game for design professionals to accurately determine project costs. The design-build approach helped solve this issue for the Vista projects by bringing a contractor to the table that was skilled in professional construction cost estimating.

Design-build also enabled the implementation of a true value engineering process. In a traditional project, value engineering generally means, “How can I quickly reduce the cost of my project?” and often is applied at the end of design on a project that is clearly over budget. This is more cost cutting than true value engineering, which occurs when alternative ideas can be implemented that either decrease cost or improve performance without adding cost. Having the entire design-build team involved early on the Vista projects provided a more creative approach to budget problem solving.

Team Approach Pays Off

In standard construction contracts, the contractor usually is entitled to a change order if there are design problems (errors, omissions), or impacts caused by the owner (scope changes, disruptions) or changed conditions (unforeseen subsurface conditions). In design-build, because the contractor is responsible for producing the design documents, he cannot use errors and ambiguities in them to later claim entitlement to additional compensation or considerations. However, changes made by the owner after the project’s scope and price have been agreed upon, or other unforeseen circumstances, may still result in the contractor being entitled to a change in his contract price, even under a design-build contract.

Photo Caption: Soon after over-excavation began, developers encountered boulders ranging in size from 3 to 14 feet.

The first few weeks of construction activity on the first of the two new Vista fire stations was very typical for both the contractor and the architect. After site clearing, the mass earthwork subcontractor began over-excavation to prepare for the building foundations. Soon after over-excavation began, a significant amount of large boulders ranging in size from 3 to 14 feet in diameter were encountered. Review of the documentation provided to the design-build team confirmed that during the owner’s geotechnical review of the site, no boulders or significant amount of rock were encountered. The problem became worse for the project team when the geotechnical engineer responsible for monitoring the ongoing earthwork advised that the existing native soil at the base of the proposed 7-foot-deep over-excavation was unsuitable for placement of the building; to make it suitable, the soil would need to be processed much deeper over two-thirds of the site area. The discovery of large boulders and unsuitable native soil were unforeseen subsurface conditions for which the owner contractually was responsible.

In a traditional design-bid-build project, these subsurface conditions would be every owner and architect’s worst nightmare and undoubtedly the contractor would be working hard to capitalize on the project’s misfortune. While the owner and architect scramble to figure out what the options are and what to tell the contractor to do next, the clock keeps ticking. Such a scenario has a potentially huge impact on the project schedule because the general contractor is effectively shut down while waiting for the design team’s direction. Meanwhile, the subcontractors are sitting and waiting, or worse, leaving to work on other projects — while also starting to prepare their cost-recovery claims pursuant to the delay.

However, in this case because the Vista project was using the design-build approach, the selected contractor was a trusted member of the project team who had a vested interested in completing the project on time and at a high level of owner satisfaction. This relationship allowed the owner, architect and contractor to quickly develop a plan to handle the unforeseen conditions and mitigate the schedule and cost impacts.

Approximately 3,500 cubic yards of unforeseen rock ultimately were processed and exported offsite, while at the building footprint excavation went 25 feet deeper than anticipated. The cost to the project to remedy these unforeseen conditions could have been well in excess of $500,000 with a delay of 45 or more days, but because the contractor was part of the solution the actual impact was mitigated to $250,000.

Meeting the Project Schedule

Maintaining a project construction schedule can be a challenge in a design-bid-build project. Often project completion is delayed for various reasons, which can impact move-in dates by weeks or even months. In design-build, the contractor‘s involvement early in the design process allows for a deeper understanding of the project goals. This allows the construction team to move quickly when construction begins. The design-build process offers the contractor more latitude in selecting quality subcontractors with experience in the specific project type, thus eliminating a learning curve and ensuring a higher quality end product for the owner.

As discussed in the unforeseen rock situation during the Vista project, the contractor was able to quickly mobilize forces to deal with the encountered conditions and minimize any potential delays to the project. As a true partner in the success of these projects, the contractor had an incentive to re-sequence the construction activities to make up the lost time on other portions of the project — at no additional cost.

The successful design and construction of the two new Vista fire stations was predicated on the implementation of the design-build delivery method, which brought value to all stages of the project. It created a cohesive project team that was able to complete construction on time and approximately $1 million under the established budgets. This savings allowed the city to completely renovate and expand another existing station, which originally was projected to only undergo a limited seismic upgrade.

Although design-build is quite different than the traditional design-bid-build approach in many ways, it has proved to be an extremely successful delivery method for many owners, with the city of Vista being a prime example. The fact that the owner and fire department are extremely satisfied — with not only the value they received in the finished product but also with the entire process — supports the increasing popularity of design-build as a preferred delivery method on public-works projects.