Exploring collaborative contracting: Progressive design build


Large infrastructure projects present challenges to all project stakeholders. Lengthy time frames, macroeconomic conditions, community relations, and other issues can disrupt even careful planning and present the risk for cost overruns and delays. In recent years, more efforts have been made to mitigate these challenges by using innovative project delivery methods that go beyond the traditional “lowest price wins” contracts. This article will discuss one delivery method that elevates traditional design-build delivery to a collaborative, iterative process: Progressive Design Build (PDB). 

What is PDB?

In traditional design-build delivery, the owner decides what they want built, and goes to a single company to for both the design of the construction and the execution. Design-build delivery can be elevated through PDB, which is a stepped, or progressive process. In this approach, the owner selects a team based on qualifications or best value, followed by a collaborative process toward a final design and contract price. Key features of PDB include early retention of the design-builder, selection based on qualifications rather than final project cost/price, and delivery of the project in two distinct phases. Phase One includes a budget-level design, while Phase Two includes the completion of the project’s design and construction.

Currently PDB is most used by private entities who have more flexibility in how they assess a potential contractor. Public owners are more restricted by procurement laws and regulations that require them to accept only the lowest bid; however, some public owners have the option to use a PDB procurement approach like that of private sector owners, and there is a trend towards greater use of qualification-based selection as opposed to pure cost-based selection.

Choosing a Contractor with Qualifications-Based or Best-Value Selection

When using PDB, an owner’s primary procurement objective is selecting the right team through a streamlined and straightforward process that adheres to applicable regulations. The “right” team is one that can work collaboratively with the owner and has the best chance of meeting the project’s goals and required outcomes. This requires a partner who is trustworthy, fair, qualified, and transparent. Depending on their procurement regulations, owners can achieve this objective by using pure qualifications-based selection (QBS) or best-value selection processes.

QBS focuses solely on non-price selection factors, such as team qualifications, past performance, project approach, and creativity, without evaluating price information. Owners may ask for price information on items like Phase One compensation or the design-builders fee, but it will be in a separate submission and not evaluated as part of the selection process. Instead, owners will open this submission only after determining the winning design-builder and using the information to negotiate the contract.

Best value selection considers both non-price and price factors. However, only a limited number of price factors, such as Phase One compensation and design-builders fee, are evaluated. As these factors are insignificant compared to the ultimate design-build contract price, the weighting for price factors is quite low (e.g., 5 to 20 percent or treated as a trade-off and not weighted at all as with the federal model) compared to the non-price factors.

How PDB Supports Successful Outcomes

The early collaboration structured into PDB provides many opportunities for owners to assess the creativity and qualifications of the design-build team. Especially in emerging areas of concern for project owners – issues of sustainability, resilience, and ever-present cost concerns—owners can supply specific examples of past projects that prioritized sustainability and durability. They can build a checklist of non-price factors into the proposal requirements for teams to address. Or, they could host a design competition to push design-build teams to produce more innovative solutions. The key here is flexibility – by moving beyond the lowest-cost-always-wins mindset, PDB allows owners to embrace a fuller, more meaningful definition of value. This results in better projects and better processes along the way to delivering a finished product. 

PDB Going Forward

The recent growth of alternative project delivery in infrastructure projects reveals a key truth: the old ways of procuring infrastructure have lots of room for improvement. The inherent complexity of modern construction—the layers of regulatory regimes, the vast number of stakeholders, labor force issues, community relations, inflation, supply chain, etc.—demands a broader understanding of best value. When we, as a society, make massive investments in our infrastructure, we must do our best to make sure that investment is something that serves our society now and into the future. PDB is one tool to make great project outcomes more likely.

This article contains information from the Design Build Institute of America’s white paper Progressive Design-build:  Design-Build Procured with a Progressive Design & Price. You can read the white paper here.

Comments are closed.