|Posted on Monday, August 11, 2003|
We Mean Business. Illinois Business.
Passage of state bill could expedite pace of state design-build projects
State of Illinois agencies have never been able to contract a construction project on a design-build basis.
Until now. If Illinois Senate Bill 1497 gets Gov. Rod Blagojevich's signature, all that will change, opening up opportunities not only for the state, but also for design-build-oriented firms in Southwestern Illinois and elsewhere.
The pending legislation could translate into tangible time and money savings for the state.
Understanding the significance of SB 1497 - which passed through the Illinois Senate and is currently sitting in the House until next session - should be preempted by clarifying the difference between two ways a construction project is contractually structured.
The traditional method, known to those in the industry as construction management, means the owner signs a contract with the construction manager; the construction manager bids out the various pre-construction services or pieces of the project. Under this scenario, the owner also signs a separate contract with a project architect.
In the newer design-build relationship, the builder - usually a contractor - controls the whole process, including the architecture. In many cases, the architect is an employee of the construction firm; if not, the architectural firm regularly works in tandem with the general contractor.
The significance SB 1497 holds for state agencies in Illinois is this: being able to solicit design-build proposals rather than design-bid-build proposals could mean state-funded projects reach completion much sooner. And because time is money, state agencies could reap notable savings - or stay within budget more easily - with the aid of this proposed legislation.
SB 1497 would establish parameters for state construction agencies to utilize design-build. The state would still employ design-bid-build as the preferred method, but state project planners could consider using the design-build method under a prescribed process outlined in the legislation.
"The House will probably be studying this bill in the legislative off-season," said Mike Waldinger, executive vice president of AIA Illinois, a council of The American Institute of Architects. "Two reasons for design-build are lower cost and less time."
In the private sector, price doesn't play as big a role as it does in the public sector, he said.
"With design-build, the price is the price. And that's important when you consider the differing life cycles of the end product," Waldinger said. "In the private sector, the life cycle is 25 to 30 years compared to the public sector, where a project like a prison or school could have a life cycle of up to 100 years."
AIA statistics specific to the national market penetration of project delivery methods cite that in year 2000, design-bid-build totaled 54 percent. Design-build methods totaled 30 percent and construction management, the traditional delivery method for projects, added up to only 10 percent.
"The trend has been design-bid-build over the last 15 years," Waldinger said. "It's definitely on an upward trend."
Tim Breece, project executive with Brinkmann Constructors, said an ongoing, multiple-client project at Lambert St. Louis International Airport is an example of how local public clients are making a project happen based on the ability to accept a design-build proposal.
"We're currently going through what I think both the city of St. Louis, the airport and our firm would call a good experience," Breece said.
Brinkmann Constructors is creating the Cypress parking facility at the south side of the Intertstate 70 and Cypress Road intersection. Part of the whole expansion project, it's a facility that will replace the two existing long-term parking lots that will be taken out of service for Lambert's new runway. The $12 million project will be completed this month.
"This is a clear example of what design-build allows public entities to do: to take advantage of the contractor's expertise as a buyer of construction on an everyday basis," Breece said. "Compared to the traditional project delivery method, design-build includes the contractor on the front end, working right along with the architect and design engineer. And when you include the contractor on the front end, it enables input into project design and enables the owner - a state, a city or an airport, for example - to gain the benefit of creative ideas or solutions that the contractor might be able to offer on the front end to reduce the cost."
Breece said SB 1497 could be an opportunity for Brinkmann to successfully compete on more public projects.
"I think SB 1497 would enable us to bid that kind of (design-build) work," he said. It opens the door. It's very difficult to go and bid with seven or eight contractors on a traditional basis. Many times, the low bid is the guy who makes the mistake, and those mistakes often lead to other mistakes and cost overruns. In the design-build scenario, there's really no excuse for it."
Holland Construction Services Inc. President Bruce Holland also thinks SB 1497 could be a plus for the industry. His firm acts as a contractor or design-builder, depending upon the specific project.
I think it's a positive step," he said. "Design-build, in some ways, is a more organized effort; you've got the contractor and the designer working together on the same team."
The enactment of SB 1497 would allow firms such as Holland's to be more involved in state projects.
While some in the building and design industry are embracing SB 1497, others say design-build has a place in the private sector, but not necessarily in the public sector.
AIA Illinois' official position is in support of the legislation.
"This legislation is something that is late in coming," Waldinger said. "Rather than waiting for someone from outside our industry to draft the legislation, we're taking the initiative and are working from a construction group and design community consensus. SB 1497 is our first shot out of the gate. We're not far from ironing out details."
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