Dive Brief:

• Santa Clara County, CA, CEO Jeff Smith has attributed the schedule delays and cost overruns on the Valley Medical Center project largely to the design-bid-build agreement with Turner Construction, who is now back on the project after being terminated, according to the Silicon Valley Business Journal.
• This type of project delivery method is a cornerstone of traditional construction, but Smith told the Business Journal that it was not suitable for such a "complex building project." Smith also told the Business Journal that Turner's low bid, which was based on incomplete designs, was chosen during a recession and was "considerably lower than it should have realistically been."
• Smith said he believes a design-build delivery method would have been more successful for the medical center project, as the method involves the chosen contractor assuming responsibility for the design and execution.

Dive Insight:

Sacramento State Construction Management professor Justin Reginato told the Business Journal that design-bid-build works best with complete plans but can also work with a partial set of plans as long as those involved have the required "understanding." 

A design-bid-build contract involves the owner hiring an architect to produce a full set of plans and specifications. Then the owner solicits bids for the work from general contractors who, in all likelihood, use subcontractor and supplier estimates to assemble their bids to the owner. The owner then chooses a bid, often the lowest, and the selected contractor performs the work according to the plans and specifications he used to bid the project. Any changes are incorporated into the contract as additions or deletions, depending on the change.

"By doing design-bid-build, we hired the architect to do part of the design, then you bid it, then they finish the design and part of the build, so there's this inherent conflict between the architect and the contractor," Smith said. "For us, it failed us."

This critique of the project delivery method is the same argument that some industry experts have used to explain the cost overruns and delays on the Boston Green Line rail extension that ended up with the MBTA removing general contractor White-Skanska-Kiewit and other lead contractors from the project.

As Reginato told the Business Journal, a design-bid-build arrangement is not ideal when the plans are incomplete, but it can be done successfully. Although design-bid-build is the traditional delivery method, proponents of design-build have been picking up steam lately.