Which project delivery method is right for you?

EPC, EPCM, DB, DBB, IPD, and the list goes on! If you are involved with a capital construction project, you have probably heard at least one of these acronyms, if not more. Choosing the ‘right’ project delivery method is critical – it sets the stage for efficient alignment of goals, risks, ownership, cost, schedule, and more. But what are these different terms and methods, and which is the right one for your project?

Generally, consider the three main parties on a construction project: an owner; an engineer/designer/architect; and a contractor/builder. The project delivery method is a way of aligning all parties and determining responsibility and control. Sometimes a simple misalignment of acronyms can start the project on the wrong foot, so it is vital to establish the commercial intent before launching into an alphabet soup. I prefer to talk about the intent in plain language, then determine the right industry term. More challenging is that, depending on the industry, there are slightly different meanings and understandings. I’ve shared common use below, but be sure to talk about the intended result. I’ve simplified them into responsibility (single, dual, triple).

The Design-Build (DB) method is similar to Engineer-Procure-Construct (EPC). Generally, the intent is to have single-source responsibility – one contract with the owner, ‘one throat to choke’, and ‘turnkey’. EPC can sometimes have some inherent performance guarantees. This provides one point of contact and can result in a faster delivery time, but usually involves limited owner control over design and construction decisions. The contracted cost is usually higher, as the contractor is taking on additional risk – yet it may also motivate the engineer and constructor to coordinate closely to avoid potential design errors that are costly to fix.

The Design-Bid-Build (DBB) method can include variations of Construction Manager at Risk (CMAR/CM@R/CMr). Here, there is usually dual-source responsibility. There are two contracts: one between the owner and the engineer/designer/architect; and one between the owner and general contractor. This provides the owner with greater control over the design process and has the contractors competing/bidding against the design. As there is an extra step, it can mean longer delivery and greater owner responsibility. Generally, you establish a guaranteed maximum price (GMP).

The Construction Manager (CM) method should be clarified – to be explicit, Construction Manager Agency (CMA), sometimes referred

to as CM Not at Risk. Typically, this is where I use the Engineer-Procure-Construction Management (EPCm) acronym. Now there is a third party – triple-source responsibility among the three contacts. The owner is managing a contract with the engineer/designer/architect, the general contractor, and the construction manager. (In a variation, the Construction Manager Multi Prime (CMMP) approach, the owner would serve as the general contractor and have multiple contracts, with the various construction disciplines.) There is greater owner control, but also greater owner responsibility. While the Construction Manager should be working in the owner’s best interest, risks – such as cost and schedule – are passed to the owner.

A hybrid of sorts is Integrated Project Delivery (IPD), which takes a collaborative approach, generally with a single, multi-party contract, so risk and reward are shared. Although there’s more planning up front – including selecting all the parties initially – it offers promise in collaboration and alignment with goals. IPD can be useful on complex projects. With all parties aligned, an advantage is making coordinated changes early in the project life cycle, which can reduce changes later in the cycle when the costs are often higher.

By carefully considering the requirements, risk profile, and desired owner control over the project, schedule, and budget, all parties can align on a project delivery method that lets everyone win. The same project, executed with different delivery methods, can have vastly different results. Misalignment of delivery method is often where you see conflicts, cost and schedule overruns, and ultimately not being happy with the final result. Taking the time up front to consult with all parties and carefully choosing the right project delivery method will enhance your probability of success.

For further study, the American Institute of Architects and the Associated General Contractors of America are excellent industry resources on the delivery methods as well as offering standard contracts.

-David Ziskind