Finding the right team is only the first step
The popularity of design-build as a project delivery system continues to grow in the United States as more and more owners embrace it. There are a variety of ways that your firm can become involved in this growing market. Your firm can contract directly with the owner as the design/builder on predominately power, communications or control projects. More commonly, your firm will be a subcontractor to a general contractor who acts as the design/builder on a project. Building a profitable design-build business means identifying and teaming with the right general contractors. This article will discuss identifying the right general contractors and marketing your design-build services to them.
Teaming reduces your risk
Design-build project delivery is very risky for the electrical contractor. You are not only committing to build the project, but you are also committing to design the project in accordance with the owner’s criteria for either a lump sum or guaranteed maximum (GMAX) price. You are often making this commitment based on ambiguous and conflicting project criteria from the owner, an incomplete and uncoordinated design, and limited proposal time and resources.
One of the best ways to control your risk and ensure project success is to join a design-build team led by a general contractor who understands the importance of teamwork to project success.
It is not unusual for general contractors to form a design-build team by selecting team members based on low bid. Selecting the design-build team based solely on price can be very dangerous for everyone involved, including the owner. First, other specialty contractors’ proposed systems effect your firm’s proposal and there is often no pre-bid coordination. Second, competing against other electrical contracting firms means that you are going to have to cut your proposed design and installation to the bare minimum in order to be successful. Even if you do win the subcontract for the project, you may end up a loser in the end. Under this scenario everyone is looking out for themselves and there will be little teamwork or focus on overall project success.
Select your team
Marketing isn’t just about selling; it is about identifying the right customer with a genuine need for your product or service. The first step in marketing your design-build services is to identify general contractors who are actively pursuing design-build work in your market area and understand the importance of building win-win relationships with specialty contractors.
These teams are often formed to pursue work in a particular market segment such as health care, pharmaceuticals, semiconductors or commercial development. The general contractor’s objective is to sell owners in their target market on the advantages of design build and selecting the design-build team based on qualifications.
Once you have identified one or more general contractors you want to work with, you need to sell your firm as an effective partner on future design-build projects. You need to showcase your capabilities and demonstrate why it is to the general contractor’s advantage to work directly with your firm as opposed to other electrical contractors.
You should promote your management team, in-house design capabilities, and your firm’s history of completing projects on time and within budget. In addition, you should stress your firm’s financial and organizational stability, ability and willingness to be a team player, experience on design-build projects, safety and claims record, among other things. Be sure to point out your previous work in the market segment because it may give the design-build team a competitive advantage.
Understand the issues
It is very important to understand the issues associated with building a mutually beneficial working relationship. The issues involved in assembling effective design-build teams are different than those associated with competitively bid “plan and spec” work. Issues such as roles and responsibilities, compatibility firm culture, legal structure and licensing considerations, marketing and proposal responsibilities, management of risk, design review and evaluation and financial commitment need to be considered. A good reference for understanding the issues associated with teaming on design-build projects is the Design/Build Teaming Checklist published jointly by the Associated General Contactors of America (AGC) and the American Institute of Architects (AIA). EC
GLAVINICH is an associate professor in the Department of Civil, Environmental and Architectural Engineering at The University of Kansas and is a frequent instructor for NECA’s Management Education Institute. He can be reached at 785.864.3435 or firstname.lastname@example.org.