Bridging the Information Gap of Alternative Delivery Methods on Public Projects

In almost all corners of the country, municipalities, counties, and states alike have historically employed a design-bid-build approach to public projects. While the delivery method lends itself easily to selecting the lowest bidder for both the design and construction phases of projects, it also excludes other, alternative methods that may be better suited for projects that require contractor involvement during the design phase, a phased approach to completion, or partnership between the public entity and private investment. But implementation of new delivery methods has posed a problem in some areas due to a lack of familiarity. This blog post proposes a simple solution.

As early as the mid-late 1990s, changes in federal procurement laws allowed for the adoption of design-build, one option for alternative delivery, for public projects. Since that time, states, municipalities, and other public entities have followed suit. Today, you can find the use of design-build, progressive design-build, A + B, CM/GC, CMAR, and P3 just to name a few of the delivery methods that have been adopted in various states. These alternatives help provide options to public entities to find the right fit for their project.

While many contractors in the private sector that routinely employ these different methods are familiar with their mechanics, the stakeholders who have recently adopted these new approaches may not be. This unfamiliarity with the dynamics of different delivery approaches can risk taking a new and potentially more efficient new way of tackling a project and shoehorning it into an older mode of thinking. This results in the loss of any potential benefit that the public (and the public fisc) could receive from a better way of doing things, but it generally creates delays in completion and higher costs than if the old standard—design bid build approach—were used.

Some of growing pains also come from learning something new. On CMAR projects in which we have recently been involved, we see owners and designers approaching their newfound involvement in the same way they always had. The collaboration between design and construction was tempered because of a misunderstanding about how these different paths would run. The result was that the design, value engineering, and constructability exercises were chopped up, at least until everyone—not just those familiar with the mechanics of the CMAR process—understood that these activities would run concurrently. Once that happened, the benefits of this new system began to emerge. As time went on, and all the stakeholders became more comfortable with their new dynamics, it has resulted in the exact goal of a CMAR project: a project completed on time, within budget, and with very few surprises.

This recent example embodies a deceptively simple solution: The key way to ensure that newcomers to the alternative delivery methods in the public sphere maximize the benefits is education. This rather obvious answer is not worth much if the people who understand how these systems work do not take the time to help educate those who are new to them. Thus, the trick, is for those who are familiar to help those who are not. Undoubtedly, this may create more work for contractors who find themselves with owners and designers that have not been part of such a process. But this may be the wrong view. Contractors succeed when they can avoid the project pitfalls of delays, acceleration, unforeseen impacts and costs, and disputes. So when faced with an alternative delivery method and a team unfamiliar with how to use it, the contractor should consider that the educating of its collaborators is really nothing more an investment in how to successfully implement new approaches for the benefit of everyone, including the contractor.

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Author, Michael S. Blackwell, is an equity partner with Riess LeMieux, LLC. Michael represents a wide variety of clients, ranging from general contractors, subcontractors, owners, developers, insurers, and sureties in the construction industry, and his practice touches on all manner of disputes and issues that arise during construction or business. Michael regularly lectures on matters affecting construction clients, engineers on ethics and liability, and construction managers and public entities on changes in Louisiana construction law.

Editor, Stu Richeson, is an attorney with Riess LeMieux in New Orleans, primarily focusing on commercial litigation with an emphasis on construction matters.