Resume of Project Delivery Methods

Project delivery systems refer to the overall processes by which a project is designed,
constructed, and/or maintained [1]. A project delivery method is a system designed to achieve the
satisfactory completion of a construction project from conception to accupancy. There are many
delivery methods that are used today, but virtually all of them are variations of the four most
common methods that are used. Closely related to project delivery methods are procurement
strategies, contractual arrangements, and compesation methods [2]. Document from The
Construction Management Association of America proposes an introductory guide for owners who
face the choice of delivery methods for their projects, construction and program managers whose
role is to advise owners and to manage the design and construction process utilizing the most
appropriate method. There are four project delivery methods mentioned in this document including
Design-Bid-Build, Construction Management at Risk, Design-Build, and Integrated Project
Delivery (IPD).
Project delivery methods that referenced by Idaho Transportation Departement describe
about essential elements, contractor involvement, applicability, advantages, risk/limitations and
procurement methods that are used in Design-Bid-Build, Construction Manager/General
Contractor, and Design-Build [3]. On the other hand, Trauner Consulting Services, Inc. illustrates
how the public sector has begun experimenting with alternative methods to improve the speed and
efficiency of the project delivery process. These alternative systems move closer to the integrated
services approach to project delivery favored in the private sector [1]. Project Delivery Method
Handbook performed by Alaska Departement of Education and Early Development describes the
ability to use alternative project delivery comparing with Alaska Statues and Administrative Code.
Overview of project delivery options are performed by using matrix comparing selection type and
contract type to choose suitable methods.
In order to be able to respond the increasing of intensity permanently in the aviation
sector, Ministry of Transport and Communication Republic of Turkey introduces the document to
describe the terminals constructed as a result of the implementation of the Build-Operate-Transfer
Model. This document talks about the implementation of the Build Operate Transfer Model in
Turkey, the factors which may affect the success of the BOT models until tendering process [4].
Transit Cooperative Research Program Report 131 is sponsored by the Federal Transit
Administration evaluates the project delivery methods using in United States. Various project
delivery methods are available to the developers of public projects. This guidebook is to assist
transit agencies in evaluating and selecting most appropriate project delivery methods for their
project as well as documenting this decision in a Project Delivery Decision Report. While journal
conducted by Bob Prieto tries to compare Design Bid Build and Design Build Finance Operate
maintain project delivery [5].
Reference from Tiina Koppinen and Pertti Lahdenpera concentrate on gathering data on
the performance of different road project delivery methods and comparing the performance levels
of these methods recent and in the future [6]. Meanwhile, Pekka Pakkala uses innovative project
delivery methods for infrastructure including Design-Build, Design-Build Operate Maintain,
Design-Build Finance Operate, and Full Delivery or Program Management. Forum Economic
Minister Meeting in Solomon Islands discussed about the effectiveness of Build Own Operate
Transfer (BOOT) and described the characteristics of each type of BOT projects such as Build
Own Operate Transfer, Build Own Operate, Design Build Operate and Lease Own Operate.
 Project
Delivery Type Contract Rules Type Project Characteristic Advantages Disadvantages
Methods
Design-Bid-  Two separate  Projects where the  Three phases—  Long History of  Innovation Not Optimized
Build contracts—owner- owner needs to design, bid, build Acceptance  Usually Cost Overruns
designer, owner- completely define  Well-established  Open  Disputes Between Parties
contractor the scope and broadly Competition  Client Retains Most Risks
 Lump sum (fixed  Project scope can documented  Distinct Roles  Usually Low Bid –
price) be best defined roles Are Clear Incentive for Change
 Unit price using prescriptive  Contract  Owner Orders
specifications documents that Flexibility  Owner Responsible for
 Significant risks or are typically  Easy to Tender Errors & Omissions
third-party issues completed in a [10]  Linear Process [10]
(ROW, utility, single package  Design is defined  Minimal input from
environmental) before prior to bidding constructors, building
that can be best construction  Allows owner to operators
resolved or begins be hands off  Expect longer durations
managed by the  Construction  Ideally, low risk  Adversarial relationships
agency [3] planning based to owner [8] formed [8]
[7]  If the goal is to on completed
 Owner contracts Design, Construction and O&M seek traditional, documents
separately [8] segmented  Complete
 A contractor is typically selected based on the bid delivery methods specifications
price and enters into an agreement with the owner  that are small, that produce
to construct the road in accordance with the plans simple and/or clear quality
[6] highly constrained standards
 Owner hires consultant  where the owner  Configuration
 Consultant hires sub consultants wants to carefully and details of
 Following tender the Owner hires the Contractor settle upon a finished product
 Contractor hires the suppliers and sub-trades [9] design before agreed to by all
committing to parties before
funding construction
construction begins
 where
environmental,
geotechnical, or
regulatory issues
leave no freedom
for innovations
 Project
Delivery Type Contract Rules Type Project Characteristic Advantages Disadvantages
Methods
 that are unique,
and of which only
the client has
experience, and/or
 where it is
appropriate to take
advantage of
existing designs
[6]
Design-  Guaranteed If the goal is to seek  Design,  Integrates the  Longer Tendering Process
Build- Maximum Price an integrated construction, Process of  Costly Tendering
Operate- (GMP) process in the operations and Design,  Similar Disadvantages As
Maintain  A single contract to selection of a maintenance of Construction, and Earlier Mentioned in D-B
(DBOM) provide design, proposed project the building are Maintenance [10]
construction, all combined  One Contract for  Further reduction of owner
operation and under one All Services and control over design and
maintenance contract forming Product operation of the building
functions a DBOM  Maintenance &  Requires additional
 DBOM contract contracting team Any Operations planning from the owner
provides incentive  The four typical Aspects Can Be in the conceptual stage
for the contractor to [6] phases of a Considered  Requires a project team
design and  Owner/Client selects an organization that will project During Design with clear understanding
construct the complete the design, construction, maintenance (planning,  Projects of the DBOM delivery
facility in order to and an agreed upon period of operational design, build, Completed Faster method
minimize parameters under one agreement [10] operation and  Better Life Cycle  Limited “checks and
operational and maintenance) are Costs [10] balances” [8]
 Owner is then responsible for operations and
maintenance costs maintenance of the project, unless the operations
completed by  Delivery process
one entity improvements
are continued under a separate procurement
method that remove
 Contractor performs the role of operator for the contractual
facility in addition to the design and construction barriers and less
of the building [8] operational risk
to the owner
 Project
Delivery Type Contract Rules Type Project Characteristic Advantages Disadvantages
Methods
Design- Guaranteed  If the goal is to  Return on Complete  Costs More In the Long
Build- Maximum Price seek an integrated Investment; cash Projects that Run
Finance- (GMP) process in the flow; Could Not  Longer Tendering Process
Operate selection of a availability or Normally Be  Costly Tendering
(DBFO) proposed project other Accomplished  Similar Disadvantages As
 If the goal is to performance with Internal Earlier Mentioned in D-B
seek external payment Funding  Difficulty With Long
financing due to indicators Integrates the Term Relationships
limited  Transparent Process of  Future Political Changes
government procurement Design, May Not Accept/Agree
allocations  Competitive Construction, and with Prior
selection; Maintenance Agreements/Commitments
competition of Maintenance & [10]
ideas Any Operations
 Lifecycle & Aspects Can Be
financing cost Considered
[6] During Design
competition
 Contractor is responsible for the financing of the Projects
 Functional
project and assumes the risks of financing until the Completed Faster
performance
end of the contract period
specification Better Life Cycle
 DBFOM contractor is responsible for design completing a Costs
quality requirement Better Net
 DBFOM contractor is responsible to Owner [5]  Limited design Present Value
 Contractor assumes the risks of financing until the influence (NPV)
end of the contract period beyond what Similar Benefits
 Owner is then responsible for operations and specified in Earlier
maintenance of the asset [10] functional Mentioned in D-
specification B
Private Financing
With No
Revenue Risk
[10]
 Project
Delivery Type Contract Rules Type Project Characteristic Advantages Disadvantages
Methods
Build Own  If the goal is to  The service The private  Difficulty With Long
Operate seek external provider is sector invests Term Relationships
(BOT) & financing due to responsible for directly in the  BOT is not an easy
Build Own limited design and development of method and requires high
Operate government construction, infrastructure, so capability of promoters
Transfer allocations finance, reducing public  Not suitable for smaller
(BOOT)  BOT projects operations, debt, balancing project
incorporate the maintenance and the budget  The success of BOT
design, commercial risks deficit, and project depends upon
construction, associated with reduced role of successful raising of
O&M of the the project public sector necessary finance
facility by the  The service Project can be  Transaction costs are high,
project team, provider owns delivered at they amount to 5 -10% of
called the the project lower cost total project cost
“concession” throughout the BOT projects  BOT projects are
concession create business o successful only when
period BOT projects substantial revenues are
 The asset is create business generated during the
[6] transferred back opportunities for operation phase
 Contractor is responsible for the design, to the the local private
construction, maintenance, operations, and government at opportunities
financing of the project the end of the BOT projects
 Owner is then responsible for operations and term, often at no help in
maintenance of the asset. cost [12] facilitating
 Employ staff to operate & maintain an asset, also  BOT normally transfer of
finances & manages investment [11] includes the technology by int
financing of the BOT projects
project by the help in
concessionaire, facilitating
which transfer of
necessitates the technology
involvement of a
financial
institution
 Project
Delivery Type Contract Rules Type Project Characteristic Advantages Disadvantages
Methods
Design-  One contract—  Projects that  Final design-  Reduced  Limiting Competition ·
Build (DB) owner to design- benefit from builder selection Administration High Tendering Costs
build entity innovation in may be based on  Single-Source  New Method &
 Guaranteed design and/or any of the Responsibility Unfamiliar With Process
Maximum Price construction following:  Quality Equal or  Client Needs to Make
(GMP)  Well defined Direct Better Than D-B- Quicker Decisions
 Contractually project scope Negotiation, B  Clients Bringing Design
responsible for both  Projects that would Qualifications  Innovation Requirements > 30%
design and benefit from Based Selection,  Cost Savings (Reduces the Innovation)
construction based expedited project Best Value:  Projects [10]
on the pre-design delivery Fees or Total Completed
and design standards  Projects having Project Cost, or Faster
provided by the minimal public Low Bid  Improved Risk
client [6] controversy or  Project-by- Management
third party issues project basis for  Early Knowledge
 If the goal is to establishing and of Total Cost
documenting
seek traditional,  Accountability ·
segmented delivery roles
Constructability
[7] methods  Continuous Optimized
 Owner contracts Design and Construction under execution of
 Early Partnering
one contract design and
Potential & Trust
 Operations and Maintenance contracted/ construction
Building
 Overlapping
performed separately [8]  Integrating
 The designer’s main interest is to protect his own phases—design
Design &
and the owner’s interests [6] and build Construction
 Some
 Most Risks
construction-
Transferred to
related decisions
the Design-
after the start of
Builder
the project
 Design Reflects
 Overall project
Contractor
planning and
Strengths &
scheduling by
Ability
the design-build
 More
entity prior to
Rewards/Profit
mobilization
for Contractors
 Project
Delivery Type Contract Rules Type Project Characteristic Advantages Disadvantages
Methods
 Usually
Guaranteed
Maximum Price
(GMP) [10]
Construction • Two separate  Large projects  Final provider Good for Clients  Duplication of
Management contracts—owner to with multiple selection based With Insufficient Administration &
(CM) At- architect, owner to phases and on Staff Additional Paperwork
Risk CM at-Risk contracts Qualifications Owner  Some Duplication of
Guaranteed  Fast-tracking – Based Selection Flexibility [10] Administration
Maximum Price Staged or Best Value: Responsible for  More Paperwork for
(GMP) construction Fees Time & Cost Client
Cost Plus a Fixed  Limited internal  Hiring of the overruns  Fast Tracking Difficult to
Fee agency CM at-Risk Holds & Control With Designer &
management during the Manages the CM
resources and design phase Trade  Sometimes Difficult to
expertise  Clear quality Contractors Manage All Phased
 Limited time or standards Constructability Packages With Costs,
funding produced by the Design Review Changes & Schedule [10]
constraints [1] contract’s Same Legal  Not suited for small
 If the goal is to prescriptive Position as a projects
seek traditional, specifications General  Owner / owner
segmented  Establishment of Contractor representative must
[6]
 Construction manager is responsible for
delivery methods a guaranteed Provides A actively participate in
 CM is suitable maximum price Guaranteed contingency management
construction means and methods and delivery of
also when early  Preconstruction Maximum Price
the completed work, including quality and
completion is services offered (GMP)
performance of the asset.
required [6] by the architect, Works Closely as
CM or a Teaming Effort
contractor Encouraging
Partnering &
Trust
Owner
Flexibility
 Project
Delivery Type Contract Rules Type Project Characteristic Advantages Disadvantages
Methods
Construction If the goal is to seek Contractor is paid  Provides a  No Contractual
Management traditional, for all actual costs Managing and Relationship With Trade
(CM) At-Fee segmented delivery plus an agreed Administering Contractors
methods upon fee. (Also for All Phases of  No Contractual
Can be capped to a Project Responsibility for
GMP)  Treats Planning, Outcomes of a Project ·
Design, Client Retains the Risks
Construction as [10]
an Integrated
Tasks
 Some Costs and
 Owner/Client is responsible for the Design, Schedule Control
Bidding, and Construction of a project [10]
 CM organization takes on the responsibility for
administration & management, constructability
issues, day-to-day activities, and assumes an
advisory role to the Owner/ Client
 Owner is responsible for operations and
maintenance of the project as well as the financing
aspects.
References

1. Trauner Consulting Service, I., Construction Project Delivery Systems and Procurement Practices: Considerations, Alternatives, Advantages,
Disadvantages. 2007.
2. America, T.C.M.A.o., An Owner's Guide To Project Delivery Methods. 2012.
3. Departement, I.T., Project Delivery Methods. 2004.
4. Ministry of Transport and Communication, R.o.T., The Build-Operate-Transfer Model For Aerodrome Terminal Buildings. 2009.
5. Prieto, B., Perspectives on Public Private Partnerships. 2009, January.
6. Koppinen, T. and P. Lahdenperä, The current and future performance of road project delivery methods. 2004: Technical Research Centre
of Finland.
7. Alliance for Construction Excellence & RH & Associates, I., Understanding Project Delivery Methods. 2008.
8. Dahl, P., et al. Evaluating design-build-operate-maintain delivery as a tool for sustainability. in Construction Research Congress. 2005.
9. Nurkowski, B.B., Project Delivery Methods. 2011.
10. Pakkala, P., Innovative project delivery methods for infrastructure. Finnish Road Enterprise, Helsinki, 2002. 19.
11. Board, T., Build Own Operate Transfer - Real World Comparisons Between Wathba 2 Wastewater Treatment Plant, United Arab Emirates
and Seaview and MOA Point Wastewater Treatment Plants in Wellington. 2011.
12. Secretariat, P.I.F., Public Private Partnerships and Build, Operate and Transfer (BOT) and Suchlike Schemes. 2006.