Project delivery methods defines the characteristics of how a construction project is designed and built and the responsibilities of the parties involved in the construction (owner, designer and contractor). [1] They are used by a construction manager who is working as an agent to the owner or by the owner itself to carry-out a construction project while mitigating the risks to the scope of work, time, budget, quality and safety of the project. These risks ranges from cost overruns, time delays and conflict among the various parties.[2]
Though DBB is now used for most private projects and the majority of public projects, it has not historically been the predominant delivery method of choice. The master builders of centuries past acted both as designers and constructors for both public and private clients. In the United States, Zane's Post Road in Ohio and the IRT in New York City were both originally developed under more integrated delivery methods, as were most infrastructure projects until 1933. Integrated Project Delivery offers a new delivery method to remove considerable waste from the construction process while improving quality and a return to more collaborative methods from the past. In an effort to assist industry professionals with the selection of appropriate project delivery systems, construction management researchers have prepared a Procurement Method and Contract Selection Model, which can be used for high level decision making for construction projects on a case-by-case basis.[3]
Typesedit
Common project delivery methods include:
Design-Bid-Build (DBB) or Design-Award-Build (DAB)edit
In Design-Bid-Build, owner develops contract documents with an architect or an engineer consisting of a set of blueprints and a detailed specification. Bids are solicited from contractors based on these documents; a contract is then awarded to the lowest responsive and responsible bidder. This is the traditional model for public sector infrastructure projects.
DBB with Construction Management (DBB with CM)edit
DBB with Construction Management is a modified version of the Design-bid-build approach With partially completed contract documents, an owner will hire a construction manager to act as an agent. As substantial portions of the documents are completed, the construction manager will solicit bids from suitable subcontractors. This allows construction to proceed more quickly and allows the owner to share some of the risk inherent in the project with the construction manager.
Design-Build (DB) or Design-Construct (DC)edit
In Design-Build, an owner develops a conceptual plan for a project, then solicits bids from joint ventures of architects and/or engineer and builders for the design and construction of the project. This is an alternative to the traditional model for public infrastructure projects that does not involve Private Financing.
Design-Build-Operate-Maintain (DBOM)edit
DBOM takes DB one step further by including the operations and maintenance of the completed project in the same original contract
Integrated Project Delivery (IPD)edit
Integrated Project Delivery seeks to involve all participants (people, systems, business structures and practices) through all phases of design, fabrication, and construction, with the goal of improving project efficiency and reducing "waste" in project delivery (i.e. any processes that do no directly add value to the final product).[4][5][6] IPD is closely associated with the philosophy of Lean construction.
Job Order Contracting (JOC)edit
A form of Integrated Project Delivery (IPD) specifically for repair, renovation, maintenance, sustainability, and "minor" new construction. Each job order contract uses a Unit Price Book for pricing each job via a multi-year umbrella contract.
Public-private partnership (PPP, 3P, or P3)edit
A public–private partnership is a cooperative arrangement between one or more public entities (typically the owner) and another (typically private sector) entity to design, build, finance, and at times operate and maintain, the project for a specified period of time on behalf of the owner. A minima, public-private partnership refers to the idea of cooperation between the public sector and the Private sector.
The following models are usually used for P3 projects, though they are also sometimes used for private sector projects.
Build-Finance (BF)edit
The private actor builds the asset and finances the cost during the construction period, afterwards the responsibility is handed over to the public entity. In terms of private-sector risk and involvement, this model is again on the lower end of the spectrum for both measures.[7]
Build-Operate-Transfer (BOT)edit
Build-Operate-Transfer represents a complete integration of the project delivery: the same contract governs the design, construction, operations, maintenance, and financing of the project. After some concessionary period, the facility is transferred back to the owner.
Build–own–operate–transfer (BOOT)edit
A BOOT structure differs from BOT in that the private entity owns the works. During the concession period, the private company owns and operates the facility with the prime goal to recover the costs of investment and maintenance while trying to achieve a higher margin on the project. BOOT has been used in projects like highways, roads mass transit, railway transport and power generation.[8]
Build–own–operate (BOO)edit
In a BOO project ownership of the project remains usually with the project company, such as a mobile phone network. Therefore, the private company gets the benefits of any residual value of the project. This framework is used when the physical life of the project coincides with the concession period. A BOO scheme involves large amounts of finance and long payback period. Some examples of BOO projects come from the water treatment plants.[9]
Build–lease–transfer (BLT)edit
Under BLT, a private entity builds a complete project and leases it to the government. In this way the control over the project is transferred from the project owner to a lessee. In other words, the ownership remains by the shareholders but operation purposes are leased. After the expiry of the leasing the ownership of the asset and the operational responsibility is transferred to the government at a previously agreed price.
Design-Build-Finance-Maintain (DBFM)edit
"The private sector designs, builds and finances an asset and provides hard facility management or maintenance services under a long-term agreement." The owner (usually the public sector) operates the facility. This model is in the middle of the spectrum for private sector risk and involvement.[7]
Design–build–finance–operate-maintain (DBFOM) or Design–build–finance–maintain-operate (DBFMO)edit
Design–build–finance–operate-maintain (DBFOM)[10][11] also referred to as Design–build–finance–maintain-operate (DBFMO)[12][13] is a project delivery method very similar to BOOT except that there is no actual ownership transfer. Moreover, the contractor assumes the risk of financing until the end of the contract period. The owner then assumes the responsibility for maintenance and operation. This model is extensively used in specific infrastructure projects such as toll roads. The private construction company is responsible for the design and construction of a piece of infrastructure for the government, which is the true owner. Moreover, the private entity has the responsibility to raise finance during the construction and the exploitation period.[14] Usually, the public sector begins payments to the private sector for use of the asset post-construction. This is the most commonly used model in the EU according to the European Court of Auditors.[15]
Design–build–operate–transfer (DBOT)edit
This funding option is common when the client has no knowledge of what the project entails. Hence the project is contracted to a company to design, build, operate, and then transfer it. Examples of such projects are refinery constructions.[16][citation needed]
Design–construct–manage–finance (DCMF)edit
A private entity is entrusted to design, construct, manage, and finance a facility, based on the specifications of the government. Project cash flows result from the government's payment for the rent of the facility. Some examples of the DCMF model are prisons or public hospitals.
Conceptual differences between delivery methodsedit
A graphical representation of the conceptual differences between project delivery methods.
There are two key variables which account for the bulk of the variation between delivery methods:
The extent of the integration of the various service providers.
The extent to which the owner is directly financing the project.
When the various service providers are segmented, the owner has the most control, but this control is costly and does not give each provider an incentive to optimize its contribution for the next service. When there is tight integration amongst providers, each step of the delivery is undertaken with future activities in mind, resulting in cost savings, but limiting the owner's influence throughout the project.
The owner's direct financing of a project simply means that the owner directly pays the providers for their services. In the case of a facility with a consistent revenue stream, indirect financing becomes possible: rather than be paid by the owner, the providers are paid with the revenue collected from the facility's operation.
Indirect financing risks being mistaken for privatization. Though the providers do have a concession to operate and collect revenue from a facility that they built and financed, the structure itself remains the property of the owner (usually a government agency in the case of public infrastructure).
Level of private involvementedit
Different Levels of Private sector engagement in public project delivery by model
^Barbara J. Jackson (2020). Construction Management Jumpstart (3rd ed.). Indianapolis, Indiana: Wiley.
^Salem, O., Salman, B., & Ghorai, S. (2017). Accelerating construction of roadway bridges using alternative techniques and procurement methods. Transport, 33(2), 567-579. https://doi.org/10.3846/16484142.2017.1300942
^(PDF). American Institute of Architects California Council May 15, 2007. Archived from the original (PDF) on November 22, 2009. Retrieved 2008-11-13.
^Gatti, Stafano (2007). Project Finance in theory and practice. Academic Press. p. 414. ISBN978-0-12-373699-4.
^Lewis/ Grimsey, Mervyn/Darrin (2007). Public Private Partnerships: the worldwide revolution in infrastructure provision and project finance. Edward Elgar Publishing. p. 268. ISBN978-1-84720-226-0.
project, delivery, method, defines, characteristics, construction, project, designed, built, responsibilities, parties, involved, construction, owner, designer, contractor, they, used, construction, manager, working, agent, owner, owner, itself, carry, constru. Project delivery methods defines the characteristics of how a construction project is designed and built and the responsibilities of the parties involved in the construction owner designer and contractor 1 They are used by a construction manager who is working as an agent to the owner or by the owner itself to carry out a construction project while mitigating the risks to the scope of work time budget quality and safety of the project These risks ranges from cost overruns time delays and conflict among the various parties 2 Contents 1 History 1 1 Trends in delivery methods 2 Types 2 1 Design Bid Build DBB or Design Award Build DAB 2 1 1 DBB with Construction Management DBB with CM 2 2 Design Build DB or Design Construct DC 2 2 1 Design Build Operate Maintain DBOM 2 3 Integrated Project Delivery IPD 2 3 1 Job Order Contracting JOC 2 4 Public private partnership PPP 3P or P3 2 4 1 Build Finance BF 2 4 2 Build Operate Transfer BOT 2 4 3 Build own operate transfer BOOT 2 4 4 Build own operate BOO 2 4 5 Build lease transfer BLT 2 4 6 Design Build Finance Maintain DBFM 2 4 7 Design build finance operate maintain DBFOM or Design build finance maintain operate DBFMO 2 4 8 Design build operate transfer DBOT 2 4 9 Design construct manage finance DCMF 3 Conceptual differences between delivery methods 3 1 Level of private involvement 4 ReferencesHistory editTrends in delivery methods edit Though DBB is now used for most private projects and the majority of public projects it has not historically been the predominant delivery method of choice The master builders of centuries past acted both as designers and constructors for both public and private clients In the United States Zane s Post Road in Ohio and the IRT in New York City were both originally developed under more integrated delivery methods as were most infrastructure projects until 1933 Integrated Project Delivery offers a new delivery method to remove considerable waste from the construction process while improving quality and a return to more collaborative methods from the past In an effort to assist industry professionals with the selection of appropriate project delivery systems construction management researchers have prepared a Procurement Method and Contract Selection Model which can be used for high level decision making for construction projects on a case by case basis 3 Types editCommon project delivery methods include Design Bid Build DBB or Design Award Build DAB edit In Design Bid Build owner develops contract documents with an architect or an engineer consisting of a set of blueprints and a detailed specification Bids are solicited from contractors based on these documents a contract is then awarded to the lowest responsive and responsible bidder This is the traditional model for public sector infrastructure projects DBB with Construction Management DBB with CM edit DBB with Construction Management is a modified version of the Design bid build approach With partially completed contract documents an owner will hire a construction manager to act as an agent As substantial portions of the documents are completed the construction manager will solicit bids from suitable subcontractors This allows construction to proceed more quickly and allows the owner to share some of the risk inherent in the project with the construction manager Design Build DB or Design Construct DC edit In Design Build an owner develops a conceptual plan for a project then solicits bids from joint ventures of architects and or engineer and builders for the design and construction of the project This is an alternative to the traditional model for public infrastructure projects that does not involve Private Financing Design Build Operate Maintain DBOM edit DBOM takes DB one step further by including the operations and maintenance of the completed project in the same original contractIntegrated Project Delivery IPD edit Integrated Project Delivery seeks to involve all participants people systems business structures and practices through all phases of design fabrication and construction with the goal of improving project efficiency and reducing waste in project delivery i e any processes that do no directly add value to the final product 4 5 6 IPD is closely associated with the philosophy of Lean construction Job Order Contracting JOC edit A form of Integrated Project Delivery IPD specifically for repair renovation maintenance sustainability and minor new construction Each job order contract uses a Unit Price Book for pricing each job via a multi year umbrella contract Public private partnership PPP 3P or P3 edit A public private partnership is a cooperative arrangement between one or more public entities typically the owner and another typically private sector entity to design build finance and at times operate and maintain the project for a specified period of time on behalf of the owner A minima public private partnership refers to the idea of cooperation between the public sector and the Private sector The following models are usually used for P3 projects though they are also sometimes used for private sector projects Build Finance BF edit The private actor builds the asset and finances the cost during the construction period afterwards the responsibility is handed over to the public entity In terms of private sector risk and involvement this model is again on the lower end of the spectrum for both measures 7 Build Operate Transfer BOT edit Build Operate Transfer represents a complete integration of the project delivery the same contract governs the design construction operations maintenance and financing of the project After some concessionary period the facility is transferred back to the owner Build own operate transfer BOOT edit A BOOT structure differs from BOT in that the private entity owns the works During the concession period the private company owns and operates the facility with the prime goal to recover the costs of investment and maintenance while trying to achieve a higher margin on the project BOOT has been used in projects like highways roads mass transit railway transport and power generation 8 Build own operate BOO edit In a BOO project ownership of the project remains usually with the project company such as a mobile phone network Therefore the private company gets the benefits of any residual value of the project This framework is used when the physical life of the project coincides with the concession period A BOO scheme involves large amounts of finance and long payback period Some examples of BOO projects come from the water treatment plants 9 Build lease transfer BLT edit Under BLT a private entity builds a complete project and leases it to the government In this way the control over the project is transferred from the project owner to a lessee In other words the ownership remains by the shareholders but operation purposes are leased After the expiry of the leasing the ownership of the asset and the operational responsibility is transferred to the government at a previously agreed price Design Build Finance Maintain DBFM edit The private sector designs builds and finances an asset and provides hard facility management or maintenance services under a long term agreement The owner usually the public sector operates the facility This model is in the middle of the spectrum for private sector risk and involvement 7 Design build finance operate maintain DBFOM or Design build finance maintain operate DBFMO edit Design build finance operate maintain DBFOM 10 11 also referred to as Design build finance maintain operate DBFMO 12 13 is a project delivery method very similar to BOOT except that there is no actual ownership transfer Moreover the contractor assumes the risk of financing until the end of the contract period The owner then assumes the responsibility for maintenance and operation This model is extensively used in specific infrastructure projects such as toll roads The private construction company is responsible for the design and construction of a piece of infrastructure for the government which is the true owner Moreover the private entity has the responsibility to raise finance during the construction and the exploitation period 14 Usually the public sector begins payments to the private sector for use of the asset post construction This is the most commonly used model in the EU according to the European Court of Auditors 15 Design build operate transfer DBOT edit This funding option is common when the client has no knowledge of what the project entails Hence the project is contracted to a company to design build operate and then transfer it Examples of such projects are refinery constructions 16 citation needed Design construct manage finance DCMF edit A private entity is entrusted to design construct manage and finance a facility based on the specifications of the government Project cash flows result from the government s payment for the rent of the facility Some examples of the DCMF model are prisons or public hospitals Conceptual differences between delivery methods edit nbsp A graphical representation of the conceptual differences between project delivery methods There are two key variables which account for the bulk of the variation between delivery methods The extent of the integration of the various service providers The extent to which the owner is directly financing the project When the various service providers are segmented the owner has the most control but this control is costly and does not give each provider an incentive to optimize its contribution for the next service When there is tight integration amongst providers each step of the delivery is undertaken with future activities in mind resulting in cost savings but limiting the owner s influence throughout the project The owner s direct financing of a project simply means that the owner directly pays the providers for their services In the case of a facility with a consistent revenue stream indirect financing becomes possible rather than be paid by the owner the providers are paid with the revenue collected from the facility s operation Indirect financing risks being mistaken for privatization Though the providers do have a concession to operate and collect revenue from a facility that they built and financed the structure itself remains the property of the owner usually a government agency in the case of public infrastructure Level of private involvement edit Different Levels of Private sector engagement in public project delivery by model Identify Infrastructure Need Propose solution Project design Project financing Construction Operation Maintenance Ownership Concession Bid build Public Sector Private Sector Public Sector NoBF Build finance Public Sector Private Sector Public Sector NoBLT Build lease transfer Public Sector Private Sector Public Sector Private Sector TemporaryBOT Build operate transfer Public Sector Private Sector Public Sector TemporaryBOO Build own operate Public Sector Private Sector YesBOOT Build own operate transfer Public Sector Private Sector TemporaryDB Design build Public Sector Private Sector Public Sector Private Sector Public Sector NoDBB Design bid build Public Sector Private Sector Public Sector Private Sector Public Sector NoDBF Design build finance Public Sector Private Sector Public Sector NoDBFM Design build finance maintain Public Sector Private Sector Public Sector Private Sector Public Sector NoDBFO Design build finance operate Public Sector Private Sector Public Sector NoDBFMO Design build finance maintain operate Public Sector Private Sector Public Sector NoOperation amp maintenance contract Public Sector Private Sector Public Sector NoMarket led Proposals Private Sector Public Sector NoReferences edit Construction Management Project Delivery Methods 2017 LinkedIn Retrieved November 1 2023 from https www linkedin com learning construction management project delivery methods what you need to know autoSkip true amp resume false amp u 2167290 Barbara J Jackson 2020 Construction Management Jumpstart 3rd ed Indianapolis Indiana Wiley Salem O Salman B amp Ghorai S 2017 Accelerating construction of roadway bridges using alternative techniques and procurement methods Transport 33 2 567 579 https doi org 10 3846 16484142 2017 1300942 Integrated Project Delivery A Working Definition PDF American Institute of Architects California Council May 15 2007 Archived from the original PDF on November 22 2009 Retrieved 2008 11 13 Integrated Project Delivery A Guide American Institute of Architects 2007 version 1 Retrieved 2008 11 13 Integrated Project Delivery An Example Of Relational Contracting Lean Construction Institute Nov 18 2004 Archived from the original on 2010 06 29 Retrieved 2008 11 13 a b The Canadian Council for Public Private Partnerships Definitions amp Models https www pppcouncil ca web P3 Knowledge Centre About P3s Definitions Models aspx Archived 2020 10 28 at the Wayback Machine Gatti Stafano 2007 Project Finance in theory and practice Academic Press p 414 ISBN 978 0 12 373699 4 Lewis Grimsey Mervyn Darrin 2007 Public Private Partnerships the worldwide revolution in infrastructure provision and project finance Edward Elgar Publishing p 268 ISBN 978 1 84720 226 0 https www designingbuildings co uk wiki Design Build Finance Operate Maintain DBFOM https www fhwa dot gov ipd alternative project delivery defined new build facilities dbfom aspx https www lexology com library detail aspx g 9931c2de 63b0 4c29 853e 9769f805513b The European Court of Auditors 2018 Special Report Public Private Partnerships in the EU Widespread shortcomings and limited benefits https www eca europa eu Lists ECADocuments SR18 09 SR PPP EN pdf Pekka Pakkala 2002 Innovative Project Delivery Methods for Infrastructure Finnish Road Enterprise p 120 ISBN 978 952 5408 05 8 The European Court of Auditors 2018 Special Report Public Private Partnerships in the EU Widespread shortcomings and limited benefits https www eca europa eu Lists ECADocuments SR18 09 SR PPP EN pdf Design Build Approaches http www dnaindia com mumbai report worli haji ali sea link will be ready in 4 years 1402669 Archived 2012 10 01 at the Wayback Machine Retrieved from https en wikipedia org w index php title Project delivery method amp oldid 1195147125 Build own operate BOO, wikipedia, wiki, book, books, library,
