Design-Bid-Build
Clearly, each process has advantages and disadvantages. According to Jerry Milstead of Milstead and Associates, Inc., Design-Bid-Build starts with the lowest price, but the final cost is unclear and could be drastically different from expectations due primarily to change orders. Design-Bid-Build is the process preferred by most Oregon statutes, and is most familiar to the public. If the public needs to be sold on the necessity and method of the project, Design-Bid-Build is easily explainable. The contractor is selected on a competitive basis, which has the potential to lower overall costs. The completion of the design before bidding begins usually leads to fewer design errors and minimal schedule restraints.
A clear downside of this method is its adversarial nature. Constant bidding may drive the cost down, but it is hard to generate partnerships within the industry. The property owner is left with sole responsibility for the projects outcome, while relinquishing control of certain aspects of the project. Because the different phases are competitively bid, the lowest bidder is selected. Although saving money is a top-priority, Design-Bid-Build limits the property owner’s ability to select based on other potentially important factors and may be more expensive in the long run.
Design-Build
With Design-Build, The owner is free to select a company based on whatever criteria are most expedient. Because the number of parties involved is cut down, mid-process design changes are more practical, and the initial cost is usually within the budget. This method is primarily used for specific-use buildings.
The negatives of this method stem from the owner’s lack of input and risk partnerships. Because one firm controls the project, it is more difficult for the owner to control certain aspects of the design process. The owner cannot favor or reward the contractor or builder that most perfectly realizes their vision. If the owner wants to change the design after the initial planning process, there is little problem doing so, but the cost is solely the owner’s burden. The set cost of the project can also create incentives for the contractor to argue for cheaper materials in order to increase their profits.
CM/GC
From a financial standpoint, the most attractive feature of the CM/GC method is the Guaranteed Maximum Price (GMP) established prior to bidding. During the design phase, the owner selects a contractor to help finish the design. The contractor is able to contribute to the completion of the design process, in the full knowledge of their own abilities. Because the contractor contributes, fewer design changes are needed when the project transitions to the building phase. The CM/GC can start competitively bidding the trade work before the design is completed which saves time and therefore, money. Rigid time constraints are a reason to select CM/GC. The initial cost of the CM/GC method is higher, making it impractical for certain projects. However, the issue can be debated whether the end cost is higher.
CM/GC lends itself to high risk, high complexity projects. Each necessary skill required for the project can be bid to an expert. This method requires cooperation, and a manager who can oversee the complex scheduling issues. Because each element is bid and handled by an issue specific expert, the overall cost is driven down.
Solicitation
There are multiple ways to solicit a CM/GC Contract. The following is the most common path. Depending on the complexity of the project, the path can be started at multiple points.
1) Issue RFQ
2) Receive and Review Qualifications
3) Score Qualifications and Create Shortlist
4) Issue RFP
5) Receive and Review Proposals
6) Score Proposals and Create Shortlist
7) Conduct Interviews
8) Score and Select CM/GC Firm
9) Negotiate and Award CM/GC Contract
In order to exempt a project from competitive bidding, the contracting agency must adopt the following findings:
1) The Exemption will not Encourage Favoritism
2) The Exemption will Result in Substantial Savings to the Agency
3) The Effect on the Operational Budget
4) The Effect on Public Safety
5) Is There a Public Benefit?
6) Will Value Engineering be Done?
7) What Effects do Market Conditions Have?
8) The Effect on Public Safety
9) The Technical Complexity
10) What is the Funding Source and What Effect will the Exemption Have?
During [2] the solicitation process, it is important to consider more than just the cost. It is helpful to create a weighted scoring system that takes the following factors into account:
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The Firm’s Profile
- How long has the Firm been continually operational in the NW
- Volume of Work
- Firm Specialties
- Firm Insurance, Banking, and Legal Resources
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Litigation History: Obtain a list of all instances when Firm has been involved, either as defendant or plaintiff, in a court case, regardless of outcome
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Obtain a list and description of Firm’s recent school projects, or projects of comparable size and complexity
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Resumes and Work Histories for the people at the Firm who will be directly involved with the project
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The Firm’s methodology for Project Cost and Scheduling Controls
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The Firm’s proposed Quality Control Plan
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Identify Potential Problems and Receive Feedback from Firm about Possible Solutions
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