Construction project delivery methods dictate how stakeholders work together during every stage of a project—from ideation to completion.
Whether you’re an owner envisioning a project, an architect designing it or a contractor bringing it to fruition—it’s important to understand the key differences between these common delivery models:
- Design-Bid-Build (DBB)
- Design-Negotiate-Build (DNB)
- Design-Build (DB)
- Construction Manager at Risk (CMAR)
Here’s how each delivery method affects relationships between stakeholders and the benefits and challenges of each.
Design-Bid-Build delivery method
Design-Bid-Build (DBB) has long been the preferred delivery method in construction. Because of this, it’s often referred to as traditional project delivery.
In a traditional DBB project, the owner signs two contracts. The first contract is with an architect who draws up blueprints and schematics. The second contract, is with a general contractor (GC) who works from the finalized plans to complete the build.
As its name implies, DBB is a three-step process.
First, the design team creates project plans in collaboration with the project owner. Next, bidding is opened up to the public and contractors submit their quotes based on the design. Then, the owner awards the bid to a contractor and construction begins.
On a DBB project, contractors enter the project after the plans are finalized. Consequently, they don’t inform the design or collaborate with the architect.
However, the architect often works with the owner to choose the best contracting firm. This is especially important in private projects. Unlike public projects—where the lowest bid almost always wins—value, experience and safety are considered alongside price.
Benefits of DBB delivery
- Thanks to competitive bidding, upfront costs are usually lower than other methods
- Reduces conflicts of interest between architects and GCs
Challenges of DBB delivery
- Lack of collaboration between the designer and contractor can result in change orders and unexpected costs during construction
- Contractors may use sub-par materials to win the bid. This can result in a low-quality end product and consequently higher maintenance cost
- You have to complete the design and bid process before beginning construction. This can cause slower delivery times
Design-Negotiate-Build delivery method
Design-Negotiate-Build (DNB) is similar to DBB. It’s a three-step process where the owner signs separate contracts with the architect and contractor.
But there are several differences that make DNB an ideal delivery method for private projects. (You cannot use this method for public projects.)
Instead of offering the project up to bids, the owner requests proposals from preselected contractors before design starts. This ensures that only trusted contractors are in the running to win the bid.
Once a GC is selected, the contractor and owner negotiate the contract terms. This enables tailoring the contract specifically to the project. It further prevents misunderstandings that lead to unwanted change orders in the future.
The contractor collaborates with the architect throughout the entire design phase. This allows for transparency during preconstruction. Additionally, it helps identify and correct minor design flaws before they become costly problems during construction.
Benefits of DNB delivery
- Early collaboration boosts efficiency in all phases of the design and construction process
- Since contractors give input on material and labor cost early, owners won’t waste time designing a project they can’t afford to build
- Similarly, contractors can better gauge their profit margins because they actively participate in the design process upfront
Challenges of DNB delivery
- No direct competition between contractors means upfront costs may be somewhat higher for owners
- This method isn’t available for public projects because of government restrictions
- Owners may feel they’re in a weaker negotiating position on final price
Design-Build delivery method
In Design-Build (DB) projects, a single firm is responsible for design and construction. The owner signs only one contract, and design and construction teams collaborate from the earliest planning stages.
This collaborative method often speeds up delivery times and simplifies communication and finances for owners. Unlike DNB, most states in the US allow this delivery method on government projects. Though, some states like Iowa and Texas have rules to limit or restrict its use.
Benefits of Design-Build delivery
- DB is simpler for owners as it requires only one contract
- Design teams collaborate with construction teams from the beginning. This boosts efficiency and provides more cost transparency upfront
- No bidding process means construction can start much sooner, while streamlined processes also accelerate delivery times
Challenges of Design-Build delivery
- No competitive bidding means upfront costs may be higher for owners
- All the risk lies with the design-build team if unforeseen problems arise (which is a benefit for owners)
- If contracts aren’t well-defined, scope creep can become a problem for the design-build team
- Additionally, if contracts aren’t specific enough, owners may assume they’re getting more than the GC intends to provide
Construction Manager at Risk delivery method
In a Construction Manager at Risk model (CMAR), the owner brings on a Construction Manager (CM) to act on their behalf. They oversee the project from the design phase to closeout. In this delivery method, the CM also functions as the GC during the construction phase.
The owner will have a separate contract with the architect. However, on CMAR projects, the CM will work closely with both parties to inform design during preconstruction.
During preconstruction, the CM will calculate a guaranteed maximum price (GMP) for the project. If the project goes over the guaranteed price, the CM will be responsible for any costs that exceed that amount. Ultimately, this puts the CM “at risk.”
Benefits of CMAR delivery
- The owner can be “hands off” with less risk
- Experienced CMs can build credibility and leverage their good reputation to win more work
- A guaranteed maximum price offers owners cost certainty. At the same time, CMs can be confident in achieving their target profit margins
- CM is involved in preconstruction and design upfront, leading to less change orders or unforeseen issues downstream
- CMAR-type projects lead to more predictable outcomes for the owner and CM
Challenges of CMAR delivery
- Delivery is usually slower than with Design-Build
- An inexperienced or untrustworthy CM could cut corners to save money and derail ideal project outcomes
- Contractors who shoulder the burden of being a CM are at increased risk
Choosing the right delivery method for your construction project
None of these construction delivery methods is perfect for every project and every stakeholder. Each has its advantages and disadvantages.
As the owner, you’ll likely want to choose the delivery method that provides you with the lowest risk and highest reward. At the same time, you need to consider the complexity of the project and issues that can arise because of that.
As a CM or GC, you may want to bid on projects with the least amount of expected issues and changes downstream. Furthermore, you’ll need to consider your profit margin.
Finally, as an architect, you’ll want to consider projects where you can have the most impact on the design. Simultaneously, you’ll want to get the least pushback and change requests during construction.
RedTeam makes delivering projects easier
No matter which of these delivery methods is being used on your projects, having an integrated construction management solution makes planning, executing and delivering projects easier.
RedTeam offers solutions that streamline all phases of construction and provide a single source of truth for all stakeholders.
With RedTeam Flex, you can benefit from a streamlined preconstruction and project setup process. The solution combines project details, preferences and initial steps into a single user-friendly workflow.
It also offers advanced bid management tools for preconstruction. So you can create bid packages, send invitations to bid and compare vendors side-by-side.
RedTeam Flex puts construction financials in front of your team for better decision-making. It provides you with the real-time information you need to keep the owner updated on project progress.
Learn more about using our construction management software solutions on your next project.
