High-Performance Contracting

Compete with your skills, not with your wallet:

The design/build project delivery method continues to catch on, but many end-users don’t realize there are variations on the basic model; for example, high-performance contracting is considered one of the subsets of design/build and an offshoot of performance contracting.

Using a design/build project delivery framework and stressing the high-performance element enables the team to place additional emphasis on front-end activities that can result in smoother and more economical performance later. By aggressively planning and coordinating at the outset, design/build users have found they can employ building systems more effectively and perform above their traditional limitations.

One form of high-performance contracting makes otherwise unaffordable energy savings projects feasible by leveraging the long-term cost savings. Some high-performance, energy-saving projects are huge, both in size and cost. While the process is more complex, the basic theory is straightforward. Essentially, the process involves a loan for the initial project; the loan is paid for over time by the savings achieved in energy costs.

Basic and high-performance contracting share certain structural similarities. Once owners and design/build users began thinking in performance terms and then building to achieve pre-established building performance parameters, it was a logical next step to begin leveraging those planned performance improvements. Designing and building systems and facilities has become a more sophisticated process as design/build teams began to better understand the limitations imposed by traditional design/bid/build techniques with their emphasis on cost only.

The advantages of making decisions based upon performance and outcome as opposed to price only became increasingly clear and better understood. Though these techniques are both logical and feasible, there have been some holdups in getting this simple message across.

Owners are quickly waking up to the fact that the most important price is that at the completion of contract performance. That is perhaps why more owners and contractors are beginning to embrace the design/build delivery method. And as they learn more about the range of opportunities available for innovative new techniques, they are increasingly interested in things such as performance contracting.

Performance contracting creates an environment that rewards efficiency, planning, cooperation, teamwork, innovation, creativity and high-quality work. Capability is heavily emphasized. Contractors who can demonstrate (usually through evaluation of past performance on previous projects) above-average design and installation abilities have the advantage. Although price is always important, it is generally considered after other performance factors have been established. This is a key point as this method places skilled and seasoned design/build users at an advantage over those who are qualified solely on their respective pricing structure.

The Design Build Institute of America (DBIA) is adding high-performance contracting seminars to its roster of educational programs. These seminars are designed to teach owners (and design/build users who want to understand how owners think) how to use techniques such as award fees and incentive structures in their contracts in order to attract high-performing design/build contractors and to then reward them generously for superior performance. Interestingly, DBIA has accumulated a great deal of convincing data that demonstrates design/build teamwork enhances product quality, reduces schedule, increases profits and reduces final price.

The high-performance element has received much attention and praise through initiatives such as The Collaborative for High Performance Schools (CHPS), whose main purpose is to support the move toward energy-efficient schools achieved through a whole-building, integrated systems approach. It promotes design/build and high-performance contracting.

Though described by many names, the principle is that, even though price will always remain a driving factor for construction and contracting work, there are other important parameters that need to be weighed and considered. High-performance contracting allows for expertise, skill and past performance to move to the forefront as essential elements in contractor selection.                 EC

STONG-MICHAS, a freelance writer, lives in central Pennsylvania. She can be reached via e-mail at JenLeahS@msn.com.



About the Author

Jennifer Leah Stong-Michas

Freelance Writer
Jennifer Leah Stong-Michas is a freelance writer who lives in central Pennsylvania.

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