Trickle-Down Design

Military’s Use of Design-Build Could Filter to Local, State Levels

By Craig Barner

Local and state governments could increasingly use design-build or a variant as a delivery method for construction in part because of the military’s success with it.

State and local procurement codes usually require capital projects to be awarded to the lowest bidder, thereby barring contractors who offer design-build services because their bids would almost always be higher than those of contractors offering building services alone.

In fact, some governmental agencies, such as the Illinois Department of Transportation, are not allowed to use design-build, says Marisa Kollias, a spokeswoman. Also, the Illinois Tollway generally follows IDOT procurement guidelines.

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In recent years, however, some governmental procurement codes have been modified to allow contracts to be awarded in some cases based in part on the qualifications or design skill of the bidder.

For instance, the Tollway had two designs ready prior to starting the 6,600-ft-long Des Plaines Valley Bridge that was part of the 12.5-mi extension of Interstate 355 completed in 2007 in Will County for $730 million, says Paul Kovacs, chief engineer. But those designs were not used because the contractor on the project, Chicago-based Walsh Construction Co., came up with a third design that was implemented in part because it saved the Tollway $70 million while meeting the agency’s criteria. As a result, Walsh received a performance-specification contract, an offshoot of design-build.

There is no known data on the value or quantity of design-build contracts or their variants awarded by state and local governments, according to the Washington, D.C.-based Design-Build Institute of America.

But the military’s use of design-build is having a big impact in the Midwest.

Fran Gomes, chief engineer and capital improvements business-line coordinator for Naval Facilities Engineering Command Midwest at the Great Lakes Naval Station north of Chicago, says 80% of projects there are delivered via design-build. Nationally, the Navy awards between 70% and 90% of its contracts to design-build contractors.

“The Navy prefers design-build because it allows us to streamline the request-for-proposal process,” Gomes says.

Three projects to provide training, berthing and food service for recruits—the completed camps John Paul Jones and Moffett and the under-way Camp Porter—were each delivered design-build for about $700 million, she says. Also, the $83 million Battle Stations 21—a high-tech training-simulator completed in 2007 that electronically mimics the sights, sounds and experiences of a ship in battle—was also delivered via design-build.

“Design-build allows us to tap the contracting community and the architecture/engineering community,” Gomes adds. “They partner with us and provide some creative designs for us.”

About 42,000 recruits are trained at Great Lakes annually.

Air Force Projects in Midwest

Other branches of the military are also using design-build in the Midwest.

For instance, Scott Air Force Base in Southern Illinois has three design-build projects under way valued at about $117 million, says Cheryl Bievenue, engineering flight chief for the 375th Civil Engineering Squad. These include a U.S. Transportation Command administrative facility, dormitory and supply center.

In addition, at least four other projects are being considered at Scott that could total about $120 million, but there was no immediate information available on these.

Walsh has 25 design-build projects with the military nationally, says Michael Whelan, chief operating officer of the Building Division.

In the Midwest these include the $195 million Human Performance Wing Complex at Wright-Patterson Air Force Base in Dayton, Ohio, for which Walsh’s Archer Western Contractors Ltd. subsidiary is in a joint venture with Dayton-based Butt Construction Co.

Whelan says the project, which was awarded in April, involves 650,000 sq ft of space, mostly in two buildings, for classrooms, laboratories and administration. Completion is expected in February 2011.

Walsh received a design-build contract for a $62 million military-family housing project at Whiteman Air Force Base in Missouri, Whelan says. The project, which began in January, will provide 239 single and duplex housing units and supporting amenities and facilities. Completion is also expected in February 2011.

“We have been pursuing quite a bit of U.S. Army Corps of Engineers’ work and U.S. Navy work throughout the country,” adds Joshua Vidro, marketing manager for Walsh. “There has been quite a shift in this market over the past few years, from design-bid-build to design-build.

“Of the upcoming Department of Defense projects we are tracking, 90% of them are design-build jobs.”

Local Parallels?

Given the trend, the question emerges of whether state and local governmental agencies could parallel the military. Three issues could swing in design-build’s favors.

Simplifying a project by having only one organization overseeing the design and construction phases is a reason why the Navy prefers design-build, says the Great Lakes’ Gomes.

“It allows us to get more contracts on the street faster,” she says. However, Gomes adds that “it does not necessarily reduce the amount of time it takes to get a project built.”

Efficiency is a goal of any state or local agency, especially in an era of overextended taxpayers and reduced government staffs due to tight budgets.

Tapping bidders’ technical know-how is another reason for the Navy’s preference for design-build.

“We might not think outside the box, but these folks work in the commercial sector and keep up with technical changes,” Gomes says.

Most governmental agencies have engineering staff to evaluate proposals, but they are not up to date as a contractor would be because of the need to deliver value.

Finally, cost considerations could push governmental entities to consider design-build, says Walker Lee Evey, president and CEO of the Design-Build Institute of America.

He cites a study done jointly in 1995 by the Austin, Texas-based Construction Industry Institute and Pennsylvania State University that found design-build averages 6% less cost than conventional project delivery in part because of reduced change orders and ability to lock in materials’ costs before they go up.

Local and state governments could benefit because the cost of construction materials—especially petroleum-based products—in the free-trade era are high and keep rising. (The CII-Pennsylvania State study also found design-build averages 12% faster for construction activity and 33% faster for entire-project time than conventional delivery because design and construction activity overlap.)

“State and local organizations look to the federal government for leadership and new trends,” Evey says. “The sheer size and resources mean the federal government is going to be looked to as a leader.”

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