Burns & McDonnell's headquarters provides clients and potential clients an example of the firm's design-build capabilities.
in Chesapeake, Va., to a residential subdivision in Bethlehem, Pa., design-build seems to be everywhere. While traditional design-bid-build still has the largest chunk of market share, a 2016 survey by the DBIA, the organization’s latest available, confirms the tilt toward design-build as the preferred method for de- livery. From 2002 to 2016, according to the survey of 35 departments of transportation, completed design-build projects have increased by a hefty 800 percent, from 140 to more than 1,300. Among respondents, 87 percent indicated they would use design-build in the future. The survey also shows that 95 percent of surveyed DOTs use design- build on highways, 65 percent on bridges, and 9 percent on rail. In addition to standard construction and maintenance, design-build is use- ful in post-disaster scenarios, and was instrumental in recovery efforts in the wake of 9/11, as well as hurricanes Katrina, Sandy, and most recently, Harvey. As design-build gains in popularity, it’s only natural that more and more firms will enter the fray. With that being the case, firms testing the waters for the first time must take pains to protect themselves, said Dan Knise, president and CEO of Ames & Gough, an insurance brokerage that writes policies for about 1,200 AE firms. “It creates another avenue for someone to make a claim against an architect or engineer,” he said. “Now you’re in contractual privity.” Also, Knise said, designers leading design-build projects are respon- sible for delivering a product with a warranty, which is an extra li- ability. Saddled with the responsibility of delivering on time and on budget, design-builders have to carry a surety bond, something usually reserved for the contractor. “You’ve opened up the pathway to liability,” he said. “There’s risk here, but there’s potential for rewards. [Firms] need to go into it with their eyes wide open.”
In addition to writing policies, Ames & Gough also serves as the in- surance advisor for the states of Texas, Virginia, and Pennsylvania — states that authorize design-build programs. From his vantage point, Knise has a bird’s eye view of what’s hap- pening in the industry. Design-build and P3s go hand-in-hand, and more often than not, P3s are also design-build, with construction firms typically leading the joint venture. Larger projects, Knise said, will increasingly be the purview of design-build. From a historical perspective, Knise sees the irony of design-build emerging as a “modern” form of project delivery. The model is actually a rediscovery of something much older — the “master builder” model prevalent in the Middle Ages. As a case in point, James of St. George led the design-build teams for King Edward I’s fortification program in Wales, work that included the castles of Harlech, Conwy, and the colossal Carnarvon, among others. “In many ways, we’re turning the clock back to the way they used to do it,” Knise said. As with P3s, design-build in the public sector is regulated at the state level, creating a patchwork of legislation across the country. Based on a 2017 State Statute Report by DBIA, state authorizations are widely varied. In Ohio, for example, all state, local, and educational institutions are authorized to use design-build, and the Ohio Department of Transpor- tation is authorized to use the delivery model on projects totaling $1 billion annually, according to the DBIA report. In Iowa, the Board of Regents, which oversees the University of Iowa, Iowa State University, and the University of Northern Iowa, has design-build authority; while in Wisconsin, legislation to authorize design-build died in committee last year.
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csengineermag.com
june 2018
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