The Traditional Low-Bidder Model
In this approach, the design team works directly for the owner, and produces a set of construction documents that are used as the basis of a competitive bidding process. One version of this process is known as “Competitive Bids,” wherein a group of contractors (pre-qualified or not) submit bids for the scope of work as defined in the contract documents, and the lowest bidder usually gets the project. Another version of this process is known as “Competitive Sealed Proposals,” wherein a group of contractors submit a proposal to do the work that includes both fees and a presentation of their qualifications, which usually results one of the three lowest bidders getting selected, provided their references and qualifications indicate they will do a good job.
The main opportunity of Design-Bid-Build is as follows:
- Can result in the lowest total construction cost due to the widest-open field of bidding competition.
- General contractor chosen primarily on price, secondarily on qualifications.
- General Contractor is not on board early in the process to give feedback during the design process, to get acquainted with the design team and their intentions. They don’t have the opportunity to develop trust as a team member.
- This model is particularly susceptible to Change Orders (i.e. cost increases) during the construction process due to the bidders not being available to collaborate with the design team earlier in the process. If change orders become contentious during construction, finger-pointing often results, and the design team’s documents will be heavily scrutinized for errors & omissions.
- Lowest price general contractor is not always the most qualified. Consider GC selection based on qualifications and price.
- Not having a contractor on board early in the process may be partially compensated for by hiring a professional cost estimator to conduct milestone price checks to confirm whether the project is on target.
- The delay in selecting a general contractor until construction documents are 100% complete almost always poses an elongated transition of the project from design to start of construction.