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Mastering the Progressive Design-Build Delivery Method

by: David Nardon, DBIA, Superior Construction
David Nardon
David Nardon
Progressive design-build (PDB), known in some states as phased design-build, is gaining traction within the construction transportation industry for its collaborative approach and ability to streamline projects. Despite some early adopters, it remains underutilized in the transportation sector of the heavy civil industry, largely due to the ambiguity of this delivery method and legislation limiting its use in some states.

The industry is changing, and states like Tennessee and Illinois recently introduced new laws expanding the ability of their Departments of Transportation to use alternative delivery methods. As legislation evolves, contractors should familiarize themselves with PDB best practices to remain competitive, minimize risk, and reap the rewards of this game-changing delivery method.

Understanding Progressive Design-Build
In its simplest form, progressive design-build is a delivery method that aligns the owner, contractor, and engineering firm upon project award and consists of two distinct phases. The first phase involves developing the preliminary design and completing preconstruction services, while the second requires the team to finalize the design and construction services.

In this approach, an owner typically engages the design-build team based on their qualifications and best-value technical proposal before developing a project scope and sometimes even before they have fully developed their conceptual plans. The owner then shortlists their preferred partners and conducts interviews to make their selection. After the job is awarded, the owner, contractor and designer work together to define the project scope and agree on a final target price and completion date.

First used in the water/wastewater sector, the progressive design-build procurement and contracting approach has been around for two decades, though some markets have been slower to implement it. PDB is still unauthorized in states like North Dakota, Iowa, Pennsylvania and Oklahoma. Even in states where it is legal – like New York, Mississippi and Georgia – laws that limit its use have hindered contractors from fully exploring its benefits.

Minimize Risk, Maximize Reward
Progressive design-build has grown in popularity because it offers benefits to owners and design-builders that the traditional hard-bid model and standard design-build contracts do not.
Design-to-Budget vs. Budget-to-Design
An advantage to this methodology is that it eliminates low-bid procurement and minimizes the risk associated with traditional design-build. Not only do contractors not have to rely on their designer to prepare a competitive bid they must adhere to in construction, but they also don’t assume the risk of developing a design that is ultimately not selected.

The progressive design-build procurement method offers the design team more flexibility to meet budgetary needs because the guaranteed maximum price (GMP) usually is set once the final design reaches 60 to 80 percent completion. Once you reach that point, if the GMP cannot be negotiated and accepted, the owner and design-builder each have the option to take the “off-ramp” and walk away from the project with no legal obligation to complete it.

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Although traditional design-build projects tend to be more profitable than hard-bid jobs, higher risk is involved. Many contractors avoid them because it is not uncommon for heavy civil projects to face uncertainties and complexities that may emerge during the construction phase, leaving the contractor on the hook for unforeseen expenditures.

Instead of absorbing the cost of owner-directed changes or unforeseen circumstances, the PDB approach gives contractors greater flexibility and adaptability to address these challenges and risks early in the process, and mitigate them together. Additionally, the owner owns the contingency. As the design evolves alongside construction progress, the team can make real-time adjustments together, ensuring that the final project aligns perfectly with the owner's vision and budgetary requirements.

Accelerate Your Schedule Through Concurrent Phases
The collaborative nature of PDB enables concurrent design and construction activities. For instance, early works and utility relocation can be completed while the final design is still in development. This integration reduces the overall project timeline, as different phases can proceed simultaneously. As a result, heavy civil contractors can avoid potential delays and deliver completed projects on time or even ahead of schedule.

The Florida Department of Transportation’s (FDOT) phased design-build contract for the restoration of the Sanibel Causeway is a perfect example of this streamlined process. On September 28, 2022, Hurricane Ian washed away portions of Sanibel Causeway, a 3-mile series of bridges, leaving some locals stranded on Sanibel and Captiva Islands. After surveying the damage, FDOT officials selected Superior Construction and the de Moya Group as its preferred contractors to complete the emergency repairs detailed in the state’s first-ever phased design-build contract.

While faster than bid-build, traditional design-build procurement is still more time-consuming than PDB, as it requires contractors to submit a letter of qualifications and complete the technical phase once they’re shortlisted. That process can take up to a year. In this case, PDB allowed FDOT to award the contract less than one week after the hurricane hit, with construction starting the same day the contract was signed. The Superior-de Moya Group JV team completed temporary repairs, allowing the causeway to reopen to residents on Wednesday, October 19, nearly two weeks ahead of schedule.

Collaborative Solutions
The progressive design-build approach encourages innovative solutions to design challenges due to the high level of owner and design-build team engagement. They each have a say in how challenges are addressed and are expected to offer cost-saving solutions. Think of it as the equivalent of traditional design-build’s alternative technical concept process in a live environment. Alternative Technical Concepts (ATCs) are developed and approved in real time. There are no submittals and back-and-forth responses.

PDB’s emphasis on creativity and continuous improvement leads to higher-quality outcomes and exceptional infrastructure that meets or exceeds industry standards. In addition, since all parties are working together and claim equal ownership over design and constructability challenges, the risk of claims is also reduced.

Fostering an Open Book Environment
Owners appreciate the transparency behind the PDB model. The "open book" cost strategy involves owners to ensure the design meets their budget needs. Advocates of this methodology also cite the owner’s ability to participate in subcontractor and vendor selection as a benefit since it gives them more control over who is delivering the final product.
Collaborating with Owners to Avoid Prescriptive Proposals
While progressive design-build’s collaborative approach ensures the early development of comprehensive solutions, working with an owner on design concept development can spell trouble if you do not clearly define your roles.

A PDB project’s request for proposals cannot be overly restrictive, as that contradicts the very nature of this procurement method. If an owner writes a prescriptive proposal, they are dictating what they want and not allowing contractors flexibility to design and innovate solutions. It may be that the owner is simply not used to this delivery method. If that is the case, the design-builder may choose to educate them on the platform or walk away.

When to Choose Progressive Design-Build
Since April 2020, Superior Construction has procured 10 projects utilizing the progressive design-build method, including a $1 billion joint venture with the Lane Construction Corporation to revamp Tampa’s Westshore Interchange. However, it is not a one-size-fits-all solution.

Understanding the nuances of when to embrace progressive design-build versus traditional delivery methods is crucial to a project’s outcome. Suppose a project doesn't have significant scheduling, permitting, utility, or right-of-way risks. In that case, it is likely better suited for bid-build or traditional design-build, as those methods can offer more cost advantages due to competition among bidders.

Progressive Design-Build Done Right
Progressive design-build can be a powerful tool in a contractor's arsenal that empowers stakeholder collaboration to produce exceptional infrastructure that stands the test of time.

Through early adoption, contractors can harness the potential of progressive design-build, leading to cost efficiencies, early identification of risks, improved schedule performance, and a noticeable reduction in change orders.

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David Nardon, DBIA, is Director of Alternative Delivery at Superior Construction, an American family-owned infrastructure contractor. Nardon is also treasurer of the Florida chapter of the Design-Build Build Institute of America. Contact him at DNardon@superiorconstruction.com.

Photos courtesy of Superior Construction

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