The Design/Bid/Build Process 

The Design/Bid/Build Process 

By Kris Ellis

As potential ambulatory surgery center (ASC) owners approach the design and construction of their facilities, many choices exist in terms of what type of organization they will choose to partner with in this critical process. Part of making this decision involves understanding the different methods that architects and builders may employ to design and construct the surgery center.

The design/bid/build model differs from the design/build model in a couple key ways. “The primary difference is in the contract you have as a client; you have one or two contracts,” says Wade Taylor, AIA, president of Wade Taylor and Associates, LLC. He explains that the first step in a design/bid/build process is to select a qualified architect. “Then after you go on with the design process and develop your construction documents, you would select qualified general contractors to bid on the project.

“When you hire an architect, the architect holds the client’s hand through the whole process and is a professional representative for the client,” Taylor continues. “The architect is the client’s eyes and ears, and he works for the client during the construction process, so the architect oversees the contractor. If you have a design/builder, you hire one company and you have no professional representation in that, because the architect works for the design/ builder, so you basically forfeit professional representation and control.”

Taylor contends that another advantage of the design/bid/build process relates to cost. “The cost for design/build is empirically more expensive because you’re paying a premium for a design/builder to do the project, because they’re adding risk in to their cost, and a markup on the entire process,” he says. “So when you do the design/bid/build, which is the traditional method, you have professional representation throughout the entire process, you’re working with a professional, an architect, throughout the design of the project, and then that architect represents the owner during the construction process to make sure that needs and wants are met.”

“Without having the checks and balances of someone establishing quality and someone else establishing cost, you wind up with the fox guarding the henhouse,” says Paul W. Stegenga, AIA, an architect with Stegenga and Partners. “I’ve used this analogy many times — it’s like Arthur Andersen; if you have someone giving you consulting services and auditing services, it’s an inherent conflict of interest. When you have a design/builder who says, ‘This is the level of quality and cost,’ you can only take their word for it; there are no checks and balances. With design/build, when they establish quality and cost, you’re having to trust them, and you’re paying what the market will bear, whereas with design/bid/build, you have said, ‘This is the quality of product I want,’ and then five contractors present what they think is a fair price. Then of course, the owner can select from those five market-driven prices.”

Taylor explains that in a design/bid/build model, the owner can interact directly with the architect to make necessary changes. “The owner can approach the architect at any time in the process and discuss the process, even during construction, without the fear of extensive change order costs, because the architect is now acting on behalf of the owner,” he says. “If a change is requested, or if something needs to be added to the project, the architect investigates it, does the research, and comes up with some alternative solutions and then discusses that with the owner and the contractor.

“Once the design is approved in the design/ build arena, that’s it; any changes that are made after that are at a high cost,” Taylor continues. “The reason is that the design/ builder controls both construction and design.” For example, he notes that a design/ builder might state that a light pole costs X amount of money, while an architect may be able to offer the owner several different options at several different prices. “The architect can then communicate with the contractor and specify which one the owner wants. You have professional, experienced representation in the architect. You can turn to them and say, ‘What’s going on with my building?’ and they will deal with the contractor. The architect can take those concerns to the contractor — by contract, their job is to do the arbitration; to sort out the problems.”

“I think the process for owner involvement can be the same [for both models], but historically it has been different,” Stegenga offers. “Historically in a design/build process, that has, in my opinion, kind of commoditized the building process, where the physician is basically purchasing a building for a price, and if the price is acceptable, they’re going to buy it. But nobody had a conversation about what level of mechanical systems you have or what grade of hardware you have. Then, five years down the road, the owner thinks he has maintenance issues — a door is broken, or the lock doesn’t work, for example. In reality, he wore out the lock, because it was residential grade — nobody established the quality; they only established the price.

“In a traditional design/bid/build process, the architect takes the owner through all of the options and strategies in terms of quality, size, scale, even time — time has a value of money; how fast do you need the surgery center built?” Stegenga continues. “I think with the traditional process, the owner has historically been more involved in choices such as the quality of the countertops and mechanical systems, for example.”

Taylor shares an example from the past year in which a client selected a contractor before his organization became involved in the project. “We went through the process of designing and doing the construction documents and gave it to the contractor,” he recalls. “The contractor came in with a 15 percent fee. Their bid was about $2.5 million for this project.” Taylor felt this fee was excessive, and subsequently found three highly qualified contractors to bid on the project. “In fact, two of them were more qualified,” he continues. “Two of them came in at 7 percent and 8 percent instead of 15, just like that.” He explains that cutting the fee in half saved the client a significant amount of money at the inception of the project, while securing the services of a capable contractor. “That’s a real example of the design/bid/build delivery system working.”

With regard to the speed at which a project progresses, Stegenga contends that the two models are similar. “It still takes the same amount of time to dry concrete. It takes the same amount of time to get building permits, and the same amount of time to order hollow metal door frames.” He also notes that an effective architect should be accountable and responsive throughout the design and construction phases of the project. “If the owner hires a good architect, that person is responsible for helping you to design and budget your building, and then get fair and accurate bids from five general contractors. So there’s a single source of responsibility and there’s still a contractual relationship between the owner and the architect, and the owner and the contractor. Those things can’t change.”