Benefits of a Design-Build Veteran

Posted on January 26, 2012

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Healthcare administrators often require significant experience in the project type of their upcoming project before considering a design and construction team. For instance, if a health system is doing a cancer center, it may insist on a team having five completed cancer centers in its portfolio. Such a requirement helps confirm a team will be less of a risk for a hospital and not ‘learning on my dime’.

Surprisingly, prior experience is not so scrutinized when it comes to project delivery method. But the delivery method matters at least as much as the team doing the work—and maybe more.

Right now, some hospitals are signing up Integrated Project Delivery (IPD) teams and no one has a body of work in it. No one is an authority because it has not been around long enough. Today, a hospital would be lucky to find a team with three IPD projects under its belt; there are no veterans:  no architects, no contractors, no program managers that have done it often, let alone well. That’s like hiring a team with no cancer center experience to do a cancer center—a bit risky given the available options.

What are some of the options? Any project delivery model that is familar to the team executing it would be a better option. Or a model that provides the benefits of IPD but which also has a track record:  integrated design-build.

Despite over 50 years in the market, integrated design-build is still “new” to 80% of the healthcare architects and builders; they have no experience. And of the 20% that do, probably 3% actually practice the far-superior integrated design-build method, where all project expertise is supplied by one company. For the client, this means all risk remains with one company—the buck stops there. The selection set for a project should really be among teams with:  1) experience that offer the most accurate estimates; 2) least amount of change orders; 3) and who are legally bound to the schedule, price and quality as determined by the owner.  The discussion would begin and end with an integrated design-build team. And there are not many.

So why does experience count? Veteran design-build leadership is important for many reasons. First, it takes a lot of discipline, time and practice to set up the structures within a company that enable an integrated design-build culture to survive. Imagine an entrepreneurial venture, a start-up. For those without an imagination, watch The Social Network to get an idea. There is a lot of behind-the-scenes work to establish a company around a specific business idea and make it go.

Teams just getting into design-build are at an infancy stage. They are trying to solve organizational problems that integrated design-builders do not have. Design-build newbies are trying to figure out how to effectively communicate with the other parts of the team in different locations (while integrated teams are in one location), how much they can trust the estimates from their partners (integrated teams are one company), how to pad the schedule so they can definitively make their deadlines (integrated teams can use info at face value, not at a discount). And then when they complete work with one set of team members, they begin all over again with another team on another project—no familiarity, no continuity.

IPD, DBB and CM at Risk do not have that innovation hurdle because there is no internal difference between competitors, no structural change. Companies are virtual commodities, which is why price shopping is still so prevalent. But integrated design-builders are genetically different companies from the inside-out.

Experience is essential. Veteran design-builders understand the energy it takes to not only maintain focus in a market, but to improve. A contractor who bids for a living improves how? By doing another project perhaps, hiring another talented project manager, buying another computer or software every few years? 

An integrated design-builder is constantly improving. Such a company improves by finding out more effective ways to communicate timely information, by talking to the construction team already in the company to find out how the architects and engineers can design or detail better to save time, by talking to past clients, and by developing a new way to share a design model so everyone can do their jobs more effectively. Those efforts may help reduce overhead costs, shrink general conditions, improve subcontractor bids by a percent or two…and it all adds up and manifests itself in the guaranteed maximum price (GMP).

Integrated design-build veterans have the luxury of time to fine-tune. The hard part is already in place, so focus is on constant improvement:  adjusting the sails, playing the currents. Meanwhile, design-build rookies are bailing water like crazy, just trying to keep afloat and not run aground. I want smooth sailing.

 

 

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Posted in: Design-Build