Design/Build has been embraced for infrastructure projects and has gained significant market share in select market segments, but for commercial and institutional work it has remained on the sidelines.
Although each year Design/Build has made gains in acceptance, it just never reached the tipping point. I believe that day may finally be here, but not for the conventional reasons touted by the industry.
The usual rationale for Design/Build include faster turn around time and single source responsibility, these are both accurate and solid arguments that make sense. Every Design/Build project I have built was predicated on the need for speed. We've produced remarkable projects within timeframes that were simply not possible through conventional delivery systems. I believe however, that there are two primary factors that will finally allow Design/Build to play a significant role as a conventional delivery system. These factors are related to the current economy and the ever increasing complexity of our industry.
The commercial and institutional building industry is in a tail spin. Projects are selling for 25-35% below where they were 2 years ago. So far the cost reductions have been achieved by cutting the overhead and profit down the supply chain to zero. I also see jobs bid for what I know has to be less than cost, possibly by as much as 10%. That's a problem for the obvious reasons, but it may also be a harbinger for deflation. Since I have not seen material cost soften, the only way to bridge losses on projects like this is through wage reductions or cheating. Poor options that encourage attrition of experienced professionals and drastically increase risk for owners, GC's and sub-contractors.
These remain difficult times for contractors; if the lending pipelines don't open soon this industry will experience radical change, much more than tweaks in delivery systems. Many of the bids that have been awarded at a loss will likely need to be resolved through bankruptcies, claims, and calls on the bond. For projects already in the pipeline, Design/Build may be one of the best options to cut cost (through efficiency).
