The Passiv Report

An explanation of delivery methods in commercial construction

Most design and construction teams I encounter understand design/build in the context of today’s design/construction industry. In this setting the design team and the construction team are engaged by an Owner. If the team is using a design/build method of delivery, there is one contract, typically with the construction company, which then engages the design team in a separate contract. Variations on this theme include:

  • Owner contracts with design team who engages in a contract with a construction company.
  • Owner contracts separately with the design and construction teams. (This method is more accurately called “team build”.)
  • Owner contracts with a project-specific LLC made up of a design and construction team.
  • Owner contracts with a true design/build firm that offers in-house design and construction as an ongoing business model (as our design/build firm, Structures, does.)

All of these delivery methods have their pros and cons, but on the most basic and human level, whatever method one chooses, a project’s success or failure comes down to relationship, integrity and trust. As I tell my partners, contracts are only as good as the person you are agreeing to do business with, and if you can’t trust them with a handshake, doing business with them may be a mistake. The contract is only a very expensive handshake and if you find yourself referring to it you have already lost.

Keeping this in mind, one must look not at the best case scenarios but the worst case to determine if the delivery method works or not. When a project goes swimmingly the design works, comes in on budget, is constructed on budget and on time, the building performs, everyone is happy, and everyone will probably agree that whatever delivery method was used was appropriate. My view is different however. I believe that in this case the team was appropriate and the delivery method was irrelevant. If however, there are bumps or chasms in a project, the delivery method may play a huge role in the outcome.

Collaboration in commercial construction

In our design/build firm I give our potential clients a list of all our past clients. I tell them “here I am warts and all.” I urge them not to look for the 9 out of 10 folks that say we are great, but to find the person that had an issue and ask, “how was that issue handled?”, “were they treated fairly?”, “were their concerns heard?”, “was the resolution of the problem a win-win or at least crafted to minimize the impact and a fair reflection and recognition of the root cause of the problem?” I want my potential clients to judge my past performance based on our problem solving and understand what we are about as a company, just as I hope they will do for the other companies they may be considering.

The reason that I do this is because I am confident in our integrity and problem resolution. As a true design/build firm the buck stops with us. There is no finger to point, no responsibility to shirk. Our firm has always had the attitude, “admit your mistakes, take your lumps and move on.” It is this attitude that has helped lead to successful project delivery.

So why digress so far into this you may ask? The strength of our system is that we offer turnkey services; we are ultimately responsible for the entire project’s success. From concept, through design, into construction and during operations: no excuses. With this great responsibility also comes great power to make the project both High Performance and Cost Efficient. We are given a budget and from there we control all the levers: design, cost and quality. By having this type of control we have been able to deliver our high performance projects for market rate.

Passiv Science was established to help other design and construction teams repeat our success around the world. Now how does this relate to delivery methods? Well, as I stated earlier, in a perfect world (or at least a perfect project) delivery method is irrelevant. Problems and bumps in the road are what cause friction, and as anyone involved in design and construction knows, the business revolves around problem solving. Take a look at the chart below:

Chart showing various delivery methods in commercial construction

Clearly, relational contracting with lean construction is the preferred method of delivery for a project that requires holistic analysis, design and delivery.

Next post I will go into more detail on what I mean by “Worst case potential problem solving incentives.”

– Adam

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