Texas School District Construction Delivery Methods

Terrell Wells 3As an owner’s representative Jasmine Engineering works with the owner to facilitate and coordinate the best method for the project. Through our project management we have developed proven strategies that keep the construction under budget and on time.  The following information is meant only to give a general overview of each method and does not constitute a guarantee or outcome.

There are six construction delivery methods to choose from when deciding on the best method for your school construction project.  These delivery methods are defined in Texas Government Code Chapter 2267 Contracting and Delivery Procedures for Construction Projects with fiscal measures described in Texas Education Code (TEC) Chapter 44. Fiscal Management, Purchases, Contracts.

Under Texas Government Code 2267 the following methods may be used for school construction projects:

  1. Low Bid (Design-Bid-Build)
  2. Competitive Sealed Proposals
  3. Design-Build
  4. Construction Manager Agent
  5. Construction Manager at Risk
  6. Job Order Contracting

Low Bid (Design-Bid-Build) is a very transparent competitive process that generally takes the lowest bidder, there usually is no contractor involvement until the bid process is completed.

Pros:

  • Owner directly hires the architect, as an independent service to assist the owner from design through occupancy
  • The architect must be involved in the Construction Administration services
  • The architect provides custom building and system designs tailored to the client’s specific needs, site, City requirements and budget.
  • Wide-open general contractors’ competitive bidding of the entire construction contract provides the lowest cost for the design requirements specified.

Cons:

  • The architect might provide only moderately accurate pre-bid cost estimates
  • Due to lack of early contractor participation, the design professionals might over-design systems, which could inflate construction cost.
  • A “closed-book” approach in which the owner doesn’t have access to the general contractor’s accounting. Any savings realized through the construction process will go to the general contractor.
  • Bid shopping typically occurs = potentially lower quality
  • Multi-point responsibility of performance (design issue vs. construction issue).

Competitive Sealed Proposals (Design-Bid-Propose-Negotiate-Build) This process allows for more options for selecting than price (Ex. Reputation, Quality, Past Performance, Methodology). Best scoring proposal wins based on criteria selected by the district. There is no contractor involvement until bids, usually excellent competition and transparency.

Pros:

  • Defined project scope at time of proposal.
  • Flexibility in contractor selection.
  • Enables the scope to be redefined to fit the budget without having to re-propose.
  • Single point of accountability.
  • Allows award based on value rather than price alone through evaluation process.

Cons:

  • Requires more time.
  • No design or budget input from contractor prior to proposal.
  • Not suited for projects that are time sensitive.
  • Price not established until design is complete.

Design Build: In the Design Build Method the owner awards a single contract to the design builder to design and construct the project. This is a faster delivery method with excellent design contractor involvement, the GMP is decided before designs completed, requires third party review.

Pros:

  • Selection flexibility
  • Team Concept
  • Single point of accountability for design and construction.
  • Enables fast-track delivery (construction begins before design is complete), saving time.
  • Early GMP facilitates alternative financing methods.
  • GMP eliminates Owner concern with cost overruns.

Cons:

Normal Design Build Disadvantages:

  • No check and balance between architect and builder.
  • Owner must select a team rather than the best architect and best builder.
  • Design is completed after GMP is given.

Construction Manager Agent is a delivery method in which a construction manager is hired as a professional consultant and acts as a superintendent on behalf of the owner. The agent oversees bids for each subcontractor/trade, the agent is paid a pre-determined lump sum, and agent does not get paid on construction cost or change orders.

Pros:

  • Team Concept
  • Construction firm selected by based on quality rather than low cost.
  • Early CM involvement in estimating and constructability
  • Owner selects architect and CM separately and may be involved in selection of subcontractors
  • Competitive pricing for subcontractor work
  • Single point of accountability: CM at-Risk signs contracts with all subcontractors.
  • Guaranteed maximum price.
  • Enables fast-track delivery = time savings
  • Good for large, complex projects and multi-phase projects that are time critical

Cons:

  • Difficult for district to evaluate validity of GMP and value of contract
  • District typically pays a premium, due to less competition in bidding
  • Potential adversarial relationship when design intent is challenged by price cutting

Construction Manager at Risk: Construction manager-at-risk a delivery method in which the general contractor assumes the risk for cost over GMP. During the pre-construction phase the CMAR has involvement in the design, and can start construction phases early.  The CMAR is based on an RFQ.

Pros:

  • Team Concept
  • Construction firm selected by based on quality rather than low cost.
  • Early CM involvement in estimating and constructability
  • Owner selects architect and CM separately and may be involved in selection of subcontractors
  • Competitive pricing for subcontractor work
  • Single point of accountability: CM at-Risk signs contracts with all subcontractors.
  • Guaranteed maximum price.
  • Enables fast-track delivery = time savings
  • Good for large, complex projects and multi-phase projects that are time critical

Cons:

  • Difficult for district to evaluate validity of GMP and value of contract
  • District typically pays a premium, due to less competition in bidding
  • Potential adversarial relationship when design intent is challenged by price cutting

*Job Order Contracting can be used for minor construction, repair, rehabilitation or alteration of a facility if work is of a recurring nature, but the delivery times are indefinite and indefinite quantities and order are awarded substantially on the basis of pre-described and pre-priced tasks.

 

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