Design/build has evolved into a major electrical construction delivery method. The modern project collaboration model has gained a foothold in electrical contracting companies for its ability to help contractors large and small with real-time team solutions to bidding, financing, engineering, pricing and construction.
To survive in a down economy, contractors have bridged the gap between design/build and the traditional plan-and-spec method by spawning hybrids to maintain a team approach with a focus on delivering value to customers. And, adopting an integration mindset may be the only way to secure the project with general contractors who are requesting exclusivity and answering owner-driven demands for more efficient designs and seamless coordination.
Despite regional shifts, some industry experts say design/build is passing design/bid/build in acceptance among informed owners. Studies support the prediction that, in the next few years, half of all projects (based on dollar value) will be accomplished using the design/build delivery method. This is despite the fact that at least Alabama, Iowa and Michigan still limit the use of design/build to private projects.
Four electrical contractors shared their insights on the evolution of design/build in their region and the current trends that a changing economy are shaping.
Heartland embraces alternative concepts, technologies
Wolin Mechanical-Electrical in Des Moines, Iowa, has been procuring design/build projects for nearly 20 years. According to co-owner Tom Mass, despite being located in a state that doesn’t yet embrace alternative delivery methods for public jobs, Wolin has found profit incorporating the hybrid method of design/assist. The approach allows the company to assist customers who already have an engineering firm on record for partial services to establish systems parameters, accurate pricing and complete designs earlier in the construction process.
“In this market, some people are saying they don’t want to go down the plan-and-spec road, but they also don’t want to take that leap of faith into design/build. We’re trying to convert them to design/assist and being fairly successful,” Mass said.
Mass and co-owner David Stroh said design/build has been the firm’s preferred procurement and delivery method since 1993, though profits have been supplemented with periodic plan-and-spec projects. Approximately 80 to 85 percent of company sales have been in the design/build arena, while 10 to 15 percent of sales have been generated in design/assist since the beginning of 2009.
“Architects and engineers keep telling us the market is good to save money and go out for bid, but they’re getting burned because they don’t understand the functionality of what owners want and need, and lending is really tight. It’s collaboration versus battle,” Mass said.
The financing piece has been an obstruction for some Wolin clients recently. Mass said it is not uncommon for customers to ask for the firm’s design/build preconstruction costs separately from their construction costs, in case financing is denied.
“Why would you spend all that money on engineering in the plan-and-spec process if you don’t even know what the price was going to be before you talk to the bank?” Mass said.
Stroh pointed out that a trend toward opportunities in zero-energy building (ZEB) is poised to affect the future of both the mechanical and electrical markets soon. The concept centers on buildings using no more energy than is generated through renewable sources. Unlike the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) green building rating system, the ZEB concept monitors a construction project beyond completion into the performance phase.
“There are about five different ways to achieve it, but basically, the energy consumed by the building is offset by having power generation on-site through wind or solar and energy cells that can create small power plants. Or, owners can buy green offset credits,” said Stroh, who believes the concept’s viability is directly tied to design/build.
“One thing that’s been proven so far is you cannot build an [ZEB] via the plan-and-spec process. Everybody in the construction process has to be on the same page working for the same goal from day one,” Stroh said.
Eric Hoge, based in the Omaha, Neb., office of Commonwealth Electric, believes there still are some technology hurdles.
“I like being able to sit at the table with the architect and the owner because you can talk lifecycle costs and all those benefits.We can also talk about reducing the overall cost of ownership. If we can make an argument for a [return on investment] in 24 months or less, then we can get some good results,” Hoge said.
Hoge indicated there’s always going to be a place for plan and spec, but it’s going to be owner-mindset driven.
“Some owners have the mindset that, to get the best value, they will want three to five bids. Those will always be the plan-and-spec guys. And, there are guys who want to be more involved in the day to day, and those guys will go design/build.”
Sacramento demands IPD and exclusivity
For Collins Electrical Co. Inc., 2008 brought a drought to design/build and design/assist according to Sacramento Branch Manager Kevin Gini. In early 2009, the firm shifted to a tough hard-bid market mixed with design/build in government projects.
“I haven’t seen a lot of design/build and design/assist in the private industry come back like it used to be. Our overall sales are down 30 percent from last year, so we’ve shifted our overhead and staff to accommodate,” Gini said.
Concurrently, Gini reported that owner-driven demands for integrated project delivery (IPD) and lean project delivery methods are becoming the norm. Both methods, Gini said, prompt companies to work together toward the goal of integrating design and construction teams, systems, business structures and practices into a value-honored collaborative process that reduces waste and maximizes efficiency through all project phases.
“Lean and IPD share some of the same principles. It’s just-in-time delivery and just-in-time installation and making sure your [requests for information] and any questions on the job are resolved and processed immediately. So, the two are married very well together,” Gini said.
“It’s the project’s design team, subcontractors, project managers, supervisors and foremen in the field collaborating in an office environment on design and implementing the practice of putting building information modeling (BIM) in place early on in the job that produces successfully completed projects. Those individuals who worked collectively in the office bring their learned project knowledge to the field, so it’s a smooth transition from documentation to construction,” Gini said.
Though Collins Electrical is continuing to prosper in a difficult economy through the incorporation of IPD and lean principles, another current trend is perplexing.
“The other thing I’m seeing is the teaming relationship of a subcontractor and general contractor for exclusivity on state and governmental jobs that are hard-bid and design/build,” Gini said. “It’s not so good, because we have a lower success rate bidding exclusively to one general contractor. To ensure we are on a team, I’m having to go with the first person that asks us to be on their team. The owners are trying to get the project at the lowest price so that it meets all of their financial calculations and the requirements of bonding and lenders.”
Mid-Atlantic identifies new data center technique
Truland Systems Corp. has an extensive history with design/assist and design/build, which are still very popular delivery methods in the Mid-Atlantic region.
“There’s no disputing the fact that projects using design/build or design/assist get done faster than design/bid/build, so the time element alone is a very powerful driver,” said Alan Linder, Truland Systems vice president of operations.
According to Linder, one important factor driving the use of integrated delivery methods in recent years is the U.S. Department of Defense’s 2005 Base Realignment and Closure (BRAC) process. Due to the sheer volume of construction and design and placement required to comply with the BRAC timeframe, the Army Corps of Engineers elected to adopt forms of integrated project delivery concepts, Linder said.
“The fact that the Corps has embraced integration has helped raise the profile of design/build as a delivery method quite a lot, at least in this part of the country. We’re finding that owners, both public and private, are much more inclined to that delivery method than even a few years ago,” Linder said.
Unlike Sacramento, Linder has been disappointed by the lack of lean principles practiced around the Eastern Seaboard.
“We’ve seen almost no impetus at all toward incorporating lean delivery techniques. It’s been very, very slow to catch on here,” Linder said, “and I think there’s a tremendous efficiency to be gained by incorporating it into both design and construction. I, for one, would be very enthusiastic about that taking hold here.”
Truland Systems performs a high volume of data center systems installation, which has afforded Linder the opportunity to experience one of the newest and most exciting design/build concepts he’s seen in many years: modularity in design, an engineering technique that builds larger systems by combining smaller subsystems.
“I think it’s going to have a revolutionary impact on the delivery of data centers. It really turns the traditional bricks and mortar approach of custom-designing and custom-building the shell and permanent building infrastructure completely on its head,” Linder said. “I won’t be surprised if in a few years that what we think of as traditional data center design and construction will become relatively uncommon.”
Linder, who believes it may be stretching the concept a bit, describes modularity in design almost as a “plug and play” process that is quick to build and is easily repeatable.
“I think it’s going to catch on like wildfire,” Linder said.
MCCLUNG, owner of Woodland Communications, is a construction writer from Iowa. She can be reached at firstname.lastname@example.org.