How soon should trade contractors become involved in design-build projects, and how comprehensively should they contribute to project design, schedules and risk analysis?
There has been a lively debate on the topic among design-build proponents in recent times, a discussion that received a full airing during a recent Canadian Design-Build Institute (CDBI) virtual training session.
Panellists at the June 29 session, billed as How to Maximize the Benefits of Trade Contractors, were Gary Bale, owner and principal consultant with Vancouver-based Bale Project Consulting, and Shawn Evans, pre-construction manager with EllisDon based in Edmonton. CDBI co-chair Elisa Brandt served as moderator.
“The practice of assigning more design responsibility to the trade contractor has emerged and is growing over time,” said Bale, opening up the session with a review of the CDBI’s new manual Trade Contractors Guide to Design Build. “As construction projects have become more complex, and traditional materials have yielded to more specialized ones, designers have given the responsibility for choosing the right product or method to the trade contractor.”
A good example on the materials issue is when a trade that works in the highly volatile steel sector is brought onside early, Evans said.
“They’re dealing with this every day and will be in the best possible position to account for it accurately and realistically as they plan for a project.”
The pros and cons of involving trade contractors early in the procurement process were presented in chart form by Evans. Engaging them prior to the RFP gives them an opportunity to be involved in design with contributions towards constructability, efficiency and scheduling; there is ownership of submitted fixed pricing and there is prime contract risk sharing; but there is a “potential for disengagement, with a pricing impact” and no competitive market pricing for their services.
When trade contractors are brought in after the RFP and the contract award, there are still potential value-engineering benefits, there’s design input but less ownership, and still there is no competitive pricing.
If they are engaged after the design competition, there is no design ownership among the trade contractors, there is reduced value-engineering opportunity and input towards planning, scheduling and constructability — but there is a competitive pricing opportunity around hiring the trades.
“In my opinion, for value engineering, constructability and scheduling to be successful, they require subtrade input,” said Evans. “It’s ideal for these trades to already be committed to the team through the RFP phase as this would increase their level of ownership and ensuring the plan is managed in accordancewith the proposal.”
But the lost benefit, Evans said, is “a more competitive process created downstream for pricing.”
And when trades are brought in early and contribute to identifying project risks, Evans cautioned, that could lead to a hike in the final bid price.
“In an ideal world, risks are accounted for by those that understand them best, and depending upon the project requirements, this may mean different specialists or trades are required as part of the team,” he said.“There’s a real potential to see all the risks and challenges and simply over-accommodate your pricing to account for them through contingencies. This ultimately results in over-exaggerated pricing that can prevent you from success.”
Design-builders should assess strategies on a case-by-case basis but in general, earlier is better, said Bale. Ideally, the contractor should engage the trade as soon as it receives the RFP statement of requirements from the owner if not sooner.
“I think that the GC must provide a more open, inclusive environment for the trade contractors, because design-build is intended to be a process of collaboration and coming up with a great idea that will, in a competitive environment, produce either the lowest price or the best proposal.”
Another debate is which trades should be brought on board early. Generally, Evans said, the sector leans towards including mechanical, electrical and possibly structural.
“But I think the opportunity in this is expanding,” he said. “I think we’ll start to see a lot more trades brought into this process, where they’re expected to manage the design and take on some risk in that. I think that area will increase.”
But, Bale noted, design-builders have to be careful as there is a danger of confusion of responsibilities. Architects, civil engineers and consultants need to take responsibility for the overall design and trade contractors’ involvement requires boundaries.
“We don’t want to duplicate errors and omissions insurance, you don’t want to duplicate controversy between the architect and the trade contractor that warrants redesigns,” he said.
“It’s an interesting industry debate that is happening right now. It needs the participation of the trade contractors to get advice on what their position is, what their liabilities might be.”
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