team structures and project performance in the design-build marketplace

Team Structures and Project Performance in the Design-Build / Integrated

Project Delivery Marketplace

Mark E. Alpert, P.E., DBIA CH2M HILL

Agenda• Introduction• Team Structure– Engineer-lead– Integrated design-build without self-performance– Integrated design-build with self-performance– Constructor-led– Other markets

• Owners’ Team Structure Preferences• Implications for Companies Going Forward

Introduction: teams must have a design-build mindset

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Engineer+ Constructor+ Design-Build Mindset= DESIGN-BUILD

Engineer+ Constructor

≠ DESIGN-BUILD

Engineer Constructor

OWNERS’ DELIVERY PREFERENCES

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Typical Design-Build Team Structures• Engineer-lead

• Integrated design-build without self-performance

• Integrated design-build with self-performance

• Contractor-lead

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Engineer-Lead

• Will require clear division of responsibility between engineer and contractor

• Technical complexity– New/unproven/cutting edge technology

• Stringent project requirements– Increased effluent quality, consent decree mandate

• Unique commercial requirements• Owner preference of approach in team

structure

David L. Tippin Water Treatment Facility, Tampa. FL2002 DBIA Water Systems Quality Award

Contractor-led

• Will require clear division of responsibility between contractor and engineer

• Normal structure for transportation market• Project risk is lower than a complex processing facility• Greater site constraints/challenges• Past experience with project owner• Larger project bonding requirements?• Legislation mandating self-performanceSouthern Delivery System Water Treatment Plant and

Finished Water Pump StationColorado Springs, Colorado

• Single firm with full project responsibility• May or may not be schedule-driven• Owner wants input into subcontractor/vendor

selection• Greater involvement from local market • Legislation may not allow self-performance• Simple team structure with single point of

accountability• Must meet security for performance requirements

Integrated design-build without self-performance

Bonita Springs East Water Reclamation Facility, Bonita Springs, FL. 2008 DBIA Excellence Award for Projects over $15 Million

• Technical and procurement expertise required• Local or state legislation or policy mandates self-

performance• Self-performance potentially cheaper than

subcontracted work• Must be able to manage all project risks

successfully • Project cost is critical• Must meet security for performance requirements

Integrated design-build with self-performance

Spokane County Regional Water Reclamation Facility, Spokane, WA2012 DBIA National Water/Wastewater Award

Implications for Practioners

• Decide what structure fits best for your firm

• Identify personnel who can be effective with selected structure and project requirements

• Define what’s a “good deal” for your firm and how much are you willing to invest to win

• Define what risk is acceptable to your firm

• Inform insurance companies and banks of different business approach

• What additional business infrastructure is needed to be successful

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Planning Market Deliver

Get Smart on What Clients Expect

• Performance guarantees• Cost of work• Financial risk and margin

expectations

• Transparency in pricing• Design for design-build• Project management –

add the right talent

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Planning Market Deliver

Deliver Work and Refine from Lessons Learned

• Choose experienced Design-Build Manager to lead firm’s team

• Commit core experienced resources to projects

• Establish pricing criteria that is market based and meets firm’s business goals

• Standardized systems and tools to control, cost, scope, and schedule

• Accountability will be key in performance

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Planning Market Deliver

Significant Opportunities for Design-Build Delivery

Tailor your business to the market and mandated delivery structures that match

clients and opportunities. The future is bright for those firms that adapt

to the changing marketplace.