Project delivery methods (with types, factors and tips)
By Indeed Editorial Team
Published 25 April 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Project delivery methods cover all the processes of assigning the contractual responsibilities for designing and constructing a project. Understanding the processes taken to achieve a project's goal is critical to its life cycle and profits. If you're considering a career in project management, understanding the methods involved in project delivery can help you make an informed decision. In this article, we discuss what project delivery is, factors to consider before choosing a project delivery method and tips for successful project delivery.
What are project delivery methods?
Project delivery methods are systems used by different organisations to set up the hierarchy of a project. This includes the organisation of team members in a building project, the moment each party becomes involved in the project and those responsible for the risks. The services involved in a project's operation include financing, designing, construction, planning, implementing and maintaining services for a structure from conception to completion. It also outlines how the company intends to deliver the services to customers. This makes it crucial for companies to select an adequate project delivery method that best suits the needs of the project.
Types of project delivery methods
Below are the most common types of project delivery methods:
Design-bid-build (DBB), also called hard bid, allows project owners to work in tandem with the engineer and architect (E/A) to get the best price for the project. DBB is the traditional, most used model and may deliver a low-cost project. Hence, the criteria for selecting a contractor for this project method is the lowest construction price. The DBB project delivery method is best for new commercial construction and has three distinct phases:
Design phase: Here, the owner hires an architect or engineer to design the project. While designing the project, the E/A provides the necessary drawings and specifications to aid the contractor and their team to complete the construction work.
Bid phase: During this phase, the owner requests contractors to submit proposals and bids. After collecting the bids, the designer reviews them, questions the contractors if necessary and chooses the bid that best suits the owner's needs.
Build phase: After choosing a contractor, the owner establishes a legal contract with the chosen contractor. This is when the project begins with the ordering of the necessary equipment and materials.
Design-build (DB) is the second most common project delivery method, created to minimise the often-lengthy timeframe associated with the DBB method. In this method, project coordinators substitute the contractor and the designer with a single person known as the design builder. The design-builder covers both the phases of the design and construction, either an architect, contractor or engineer.
The DB starts with the project owner drafting an initial design used to request proposals and notes from different design builders. These proposals are like the bids in the DBB method. They represent a design builder's best offer for the project. The notes contain the details of additions and adjustments the design-builder would include if assigned the project. The project owners then select the best-value proposal regarding cost-effectiveness and clients' needs.
Construction manager at risk (CMAR)
Construction manager at risk (CMAR) is a new project delivery method and a variation of the DBB project delivery method. The major difference between them is instead of hiring a designer, the owner hires a construction manager (CM) to oversee the entire project. Owners often use this method when they have little or no experience managing the construction process. They select a CM based on their proficiency, such as the ability to meet the project's schedule, proven track record, detailed project approach and quality.
Once hired, the CM represents the project owner in every phase of the construction process. A CMAR method begins with the CM receiving an initial project design from a project owner. The CM draws up plans with other designers, builds a realistic budget and presents it to the owner as their guaranteed maximum price. The CM also receives the contractors' bids and chooses the most suitable one for the client's needs that's within the budget.
Integrated project delivery (IPD)
Integrated project delivery (IPD) is the most recent addition to the project delivery methods emphasising innovation, collaboration and teamwork. The primary goal of the IPD method is to disseminate responsibility, liability levels, risks and rewards among the project stakeholders. In this method, the E/A and CM selection takes place before the project design begins, and each of them plays a significant role in the entire process from design to construction. With a contractual connection, these offices work together to achieve the project's objectives and goals.
With this method, all parties share the risk assigned to one party, reducing the overall risk to the project. Just like CMAR, IPD reduces project costs, increases efficiency via teamwork and involves the owner in the process.
Job order contracting (JOC)
Another project delivery method is job order contracting (JOC), which involves completing multiple projects with a long-term contract, as opposed to single project contracts used in most project delivery methods. This may be ideal for owners with several ongoing projects within a year. In this method, owners accept bids from contractors at the beginning of a project. They review these bids to choose the one that best suits their project's needs.
After awarding the project, the winning contractor can work for the owner at any time, having received a joint opinion on a detailed scope of the work to complete. One advantage of JOC is that the owner can access the contractors' services at a specific unit cost without rebidding throughout the entire life of the project.
Factors to consider before choosing a project delivery method
To aid your final decision, it's important you understand the foundations of your project before choosing a project delivery method. Below are five top factors to consider:
Budgeting plays a major role in the success of every project. It's necessary to set your budget as soon as possible, then discuss the project's potential design with your construction team members to find out whether your budget is realistic. Understanding the foundations of your project would help you set a satisfactory budget. For instance, DB and IPD may have a higher construction cost than DBB, knowing that is necessary, but how you collaboratively deliver can help you remain within your budget constraints.
You may not be able to set a suitable budget without having a pictorial view of your design. Knowing what you want would enable you to choose the right project delivery method. The buildability of your project would partly depend on the design and construction team you choose.
It's very important to conduct a thorough risk evaluation before a project begins. Some of the questions to ask when starting a project include the potential risks involved in this method, and who would take responsibility for design issues potentially resulting in danger during and after construction. Answering these questions would give you more insight into the next step.
A correct estimation of a construction schedule is paramount for a project's success. Schedule and cost often correlate and fast-tracking construction might lead to an increased cost. Knowing the time needed to meet your expected schedule and cost is important in selecting the best method.
It's important to consider the owners' expertise before you make a choice. This is because some methods might pose more risk to the owners than others. Owners without construction expertise can consider CMAR.
Tips for a successful project delivery
Below are useful tips for effective project delivery:
Develop the scope statement: A scope statement is a formal document stating what you can exclude and include in a project. You can use this to negotiate objectives, clarify assumptions and deliverables.
Conduct stakeholders' analysis: This is the method used to appraise people's needs and influence over a project. With this method, you can understand your stakeholders' interests, power and communication needs and which designs to opt for.
Establish and communicate the project plan: A project plan is a formal document defining the project management processes used in implementing and controlling a project. Using the PM processes to form the foundation of your project can be quite resourceful for your project team.
Review the work breakdown structure (WBS): Work breakdown structure (WBS) is a visual format that helps you to break down projects into small deliverables you can easily add to a project schedule. WBS is more helpful in complex projects as it could identify and organise the major work streams tracked and reported in your project status.
Update the project schedule and review the critical path: Once you have updated your project schedule, you can easily examine the critical path to determine if any tasks that directly affect a key project completion date have slipped. Adherence to the critical path is crucial to keep the project on schedule.
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