The design and construction industries are revolutionizing the way projects are conceptualized and completed, and public and private projects may see cost reductions while quality increases.
Owners, architects, construction managers and contractors ever so slowly are moving away from the competitive bidding process, seeing it as archaic, fragmented and wasteful. This system is being replaced by variations on the concept of integrated project delivery — where all parties come together at the start of the project and work together toward a mutually beneficial end.
The movement is picking up momentum in the private sector; and while the public sector has been traditionally slow to respond — because of laws and bureaucracy — the state of Connecticut is coming around as well. In addition to moves made by the newly formed Department of Construction Services, the jobs legislation passed in October gives the possibility of more flexibility through public-private partnerships.
“The public sector will come around in time,” said James McManus, principal and chairman of the Glastonbury design-build firm S/L/A/M Collaborative. “I don’t think it is going to catch on too quick; it takes a big leap of faith on the owners to do it.”
The problem with the competitive bid system is its inefficiencies. The property owner hires the architect, who designs the project, then the construction manager is brought in, followed by contractors and subcontractors — all valued for their ability to work cheaply. The system is beset by change orders, waste and duplication of effort.
As much as 30 percent of work on a competitively bid project is wasted on these inefficiencies, McManus said.
Integrated project delivery is a concept that followed the emergence of building information modeling, where an entire project can be built on a computer so designers and managers know where every pieces fits before physical work begins. Integrated project delivery builds off this by bringing all the key players — owners, designers, managers, contractors — to collaborate at the start of the project.
“There would be a share in the profits based on the goals of the project,” said Whit Iglehart, principal at Hartford design firm Tai Soo Kim Partners. “The biggest hurdle at this point is getting to the establishment of the appropriate legal relationship.”
S/L/A/M already works on some projects using integrated project delivery; and the company has several design-build contracts as it has an in-house construction management firm. By creating efficiencies and eliminating the waste in competitive bid projects, the concept pays for itself even though up-front costs might be higher.
“We are doing it quite frequently,” McManus said. “It is going to revolutionize the business in some time.”
The Connecticut chapter of the American Institute of Architects is seeing integrated project delivery prevail with more projects in the state, said Diane Harp Jones, AIA Connecticut CEO and executive vice president. Most of the owners using the method now are private universities and large property owners.
“It is something the public sector is starting to move to as well,” Harp Jones said.
The Connecticut Department of Construction Services — under Acting Commissioner Donald DeFronzo — is starting to move away from the competitive bid process by using variations on integrated project delivery. That includes design-build projects and construction-manager-at-risk, where the managers are given a maximum amount to spend on a project and can complete it in any matter they deem fit.
By changing its methods, the state could start to see more designers, construction managers and contractors seek out state projects. Some firms currently stay away from the public sector because they see competitive bidding as a losing proposition.
“There’s still a lot of bureaucracy that goes along with working for the public sector,” McManus said.
During the special October jobs session of the Connecticut General Assembly, Gov. Dannel Malloy was given authority to approve five public-private partnerships through 2015. The projects can be for transportation or public works projects — such as overhauling the state’s information-technology system — and must generate revenue as a public infrastructure.
“It is an attempt to harness the private sector and bring its resources to bear on the project,” said Eric Brown, associate counsel for the Connecticut Business & Industry Association. “It is another tool that helped other states with constrained resources, and it could work here in certain circumstances.”
With the state taking no more than a 25 percent stake in these public-private partnerships, the owners have greater flexibility to move away from competitive bid and use more efficient processes such as integrated project delivery.
“A lot of it is driven by the owner organization,” said Geoff Thomas, director of program management for national consulting firm Burns & McDonnell, with major offices in Wallingford. “Every project is unique, and the uniqueness is defined by the owner.”
Burns & McDonnell has worked on private and public projects using integrated project delivery, and the success comes down to the willingness of the owner to pursue those alternative methods, Thomas said. Public organizations such as the U.S. Army Corps of Engineers and the Tennessee Valley Authority do a good job with integrated project delivery.
As projects grow increasingly complex, strong communication between all the stakeholders is needed for the project to be successful, Thomas said. Better communication technology and collaboration through methods such as integrated project delivery help manage that complexity.
“How you set up for a project really determines the end result,” Thomas said.
