ACEC releases design-build study

The American Council of Engineering Companies (ACEC) Research Institute, in partnership with the University of Colorado, has released, “Design-Build State of Practice: Recommendations for Agencies and Industry on Effective Project Delivery,” a landmark study that examines design-build project delivery features and challenges that affect the success of the project. More importantly, the report highlights recommendations around risk transfer issues that promote project harmony for both engineering firms and owners working on design-build projects.

Keith Molenaar, Dean of the College of Engineering & Applied Science at the University of Colorado Boulder, based the study on data from 155 ACEC design firms participating in design-build projects and project performance data obtained from 105 completed US design-build projects. The study found that design-build project volume and construction dollar values have grown significantly over the past five years. Firms reported that they still prefer design-bid-build or other integrated forms of delivery, such as progressive design-build and integrated project delivery, to design-build.

More importantly, the study found that firms working on smaller design-build projects generally reported excellent or near excellent results. On the other hand, firms working on larger design-build projects reported a clear imbalance in risk transfer practices; larger design-build projects had higher levels of claims, disputes, litigation, and liability gaps. Firms reported that large infrastructure projects were especially prone to claims, disputes, litigation, and low profitability. The study recommended that owners should avoid creating mega projects that require the formation of teams that lack relationships, trust, and pre-existing harmony. The study also recommended that owners avoid transferring outsized, inequitable risks, such as upfront investigations, differing site conditions, unforeseen utility relocations, third-party approvals, including environmental reviews and securing environmental permits, and easement and right-of-way negotiations, and should instead execute these tasks upfront in a separate contract so that the design-build team can submit a more reliable bid.

Most study participants reported that working with trusted partners who understood design-build processes led to more successful outcomes. They also highlighted equitable contract negotiation and risk allocation as well as owner team experience in design-build implementation as key drivers for scopes of services. Firms noted that owners who developed design-build-specific internal processes to address changes in the project scope or unforeseen circumstances were more likely to achieve successful outcomes.

Firms can download the report at ACEC Research Institute. The report has good insight for firms who are both experienced in design-build or are exploring design-build for the first time. Firms should also provide this resource to owners who are exploring design-build for the first time so that they can review and implement the recommendations for a successful project.

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