Education & Workforce Development and Government

VOICES FROM THE INDUSTRY: The design-build option bodes well for taxpayers

September 5, 2005

In the last legislative session the Indiana General Assembly passed Senate Bill 244 to become Public Law 74, commonly known as the Design Build Law.

The new legislation established the use of design-build delivery on most public works projects in the state. Initial reaction within the construction community has been mostly positive because design-build delivery has the potential to become a valuable resource for administrators of public works projects.

The law went into effect July 1 and, predictably, we have yet to experience an avalanche of design-build projects in the public sector.

The design-build delivery method offers a number of advantages over traditional delivery in terms of project control, efficiency and overall value. Despite these advantages however, the actual incorporation of design-build delivery on public projects may take several years to reach its full potential.

Design-build delivery is a single source method of design and construction delivery. Traditionally, design and construction for public capital projects has been delivered independently under separate contractual agreements.

Providing options

The design-build method of delivery allows public entities the option of purchasing design and construction under a single unified source. This delivery method has been widely utilized on a national level, having been adopted by 43 other states as well as the federal government.

Design-build has been used by private industry in Indiana for many years by some of our state's most successful companies. Despite the wide-ranging recognition of the value of design-build delivery there is still a considerable amount of reluctance within the local industry.

The first and perhaps the most significant barrier to acceptance for design-build delivery is an institutional issue. Prior to the passage of Public Law 74, public works administrators essentially had two options: bid-build delivery or construction manager as agent (CMa) delivery.

Many of the individual administrators who decide the delivery methods for a capital project have not had previous experience with design-build delivery. For some, there is an understandable level of uncertainty with this method of delivery.

This feeling of uncertainty usually causes individuals to favor the methods of delivery with which they are most comfortable. As a consequence, government officials may gravitate toward the known methods of bid-build and CMa delivery despite the fact that they are permitted to consider the design-build option.

Industry associations such like the Design Build Institute of America, Indiana Construction Roundtable and Indiana Subcontractors Association, among others are pro-actively working to reach out to public works officials to offer seminars and other types of educational resources.

This type of knowledge-building will gradually remove the hesitation and uncertainty that currently accompany designbuild projects in the public sector.

The second and more complex factor surrounding the design-build issue is based on the structure of the architecture, engineering and construction industry. Publicproject delivery rules have really not changed significantly over the past 50 years.

The industry has developed around this specific methodology of project delivery. Many successful firms have been built by perfecting a specific delivery on public projects. This group represents a particularly large and influential portion of the industry. Naturally, any attempt to change that structure will be met with stiff resistance.

Needs support

The architecture, engineering and construction industry must support the option of design-build delivery on public projects. The legislation adopted by the state allows administrators of public works projects more freedom in choosing the best and most appropriate delivery method.

Design-build delivery is by no means the "silver bullet." It is not the best or most appropriate solution for all types of projects just as bid-build and CMa delivery is not the best solution for all projects. Each method of project delivery has distinct and specific advantages and disadvantages for each project.

The Indiana Legislature and the governor made the right decision in enacting Public Law 74. They have acted in the best interests of taxpayers by allowing administrators to choose the most efficient delivery solution for each project.

As industry leaders, we must take responsibility to help lead the industry in the right direction. We must continue to challenge ourselves by pushing the industry forward so that we can better serve the public.
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