The Risk Shift

How Balfour Beatty teams leverage design-build to improve project delivery and minimize owner risk

Once considered disruptive, design-build is no longer deemed an alternative delivery method1. In fact, according to Construction Dive magazine, approximately half of all U.S. construction projects are expected to be built leveraging this single contracting entity approach by 2021. 

So what’s driving the surge in popularity? A study at the University of Texas at Austin examined the time and cost growth performance of 38 design-build and 39 traditional design-bid-build projects on U.S. Naval facilities. The results showed that design-build projects took less time, had less cost growth and were less expensive to build in comparison to design-bid-build projects.

If you ask Balfour Beatty’s experts, owners are recognizing an important benefit beyond improved cost and schedule certainty. According to John Parker, vice president for Balfour Beatty in Florida, it’s all about risk. Under a design-build contract, risk is shifted to the design-build entity, which is responsible for ensuring the accuracy and constructability of the design. 

“Clients are looking for a ‘one-stop-shop,’ ” affirms John. And that’s especially true for public entities that may not have the in-house resources to interpret design in the context of continually changing and geographically variant code requirements. “A client can rely on the construction manager as an extension of their team,” John continues. 

Despite its increased adoption, many contractors aren’t prepared to assume leading responsibility for understanding an owner’s needs and ensuring they’re properly and cost-effectively translated through design development. For contractors that prefer working from a tangible set of drawings, a blank canvas that requires abstract thinking can be daunting. 

That’s one of the reasons it’s critical for owners to partner with experienced design-build contractors like Balfour Beatty. Our work on design-build projects across the U.S. has taught us that communication is the cornerstone of success and risk mitigation on a design-build project

First, we strive to understand value in the owner’s terms. That begins by knowing the right questions to ask. As the Fails Management Institute (FMI) states, “What is the same, and what is different from the customer’s other projects? What is the project’s business purpose? Who are the key end users who need to be included in the decision? What is something the customer has struggled to get other contractors to fully focus on?”

Then, by educating every project stakeholder on the trajectory of the design-build process and the timelines they’ll have to make decisions, Balfour Beatty teams start building trust on day one that leads to more robust team integration. 

Sometimes, creative tension between stakeholders can arise during a design-build project. But that process can be healthy and productive for a team dynamic, spurring innovation when every partner is invited to the table in a highly collaborative environment. 

Although design-build offers unique benefits, no single delivery method is right for every project and every owner. As the industry continues to evolve towards a leaner model, driving accelerated schedules and production cycles, a skilled contractor that can successfully leverage design-build’s progressive workflows will be more attractive to owners seeking to shed risk. 

1 Attributed to Preston Haskell, co-founder of the Design-Build Institute of America