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What Exactly is Alternative Delivery?
You have likely heard the terms Alternative Delivery Procurement, Alternative Delivery Project, and Alternative Delivery Contracting used almost interchangeably. The project owner uses alternative delivery procurement to select a team, they are engaged in alternative delivery contracting after they select a team to deliver their alternative delivery project. The entire process of developing, procuring, designing, and building the final product is alternative delivery.
The most common types of alternative delivery are:
- Design-Build (DB)
- Public-Private Partnership (PPP or P3)
- Construction Manager at Risk (often, CM@Risk or CMAR)
- Unsolicited Bid, which typically transitions into a DB or PPP delivery
These are in contrast to traditional procurement, or design-bid-build (DBB), the procurement method in which the owner selects a designer based on qualification, and then, after design and permitting is complete, bids the project to builders for construction. The most popular alternative delivery method for roadway transportation projects is design-build. The most popular for vertical/building construction is CMAR. In transportation, alternative delivery became widespread post-2008, when the economic recession triggered initiatives such as the American Recovery and Reinvestment Act that accelerated projects to stimulate the economy and job market.
Design-build generally uses a combination of qualification, technical approach, and price to select a single team of a designer and builder. The project owner contracts with a single entity, often the builder. The designer and builder work together, beginning in the procurement stages, to develop the best technical solutions at the best price to win the project. Once the project is awarded to the design-build team and the builder work alongside the designer to develop technical solutions for the project. This relationship of the designer and builder continues until project completion.
CMAR and Progressive design-build
CMAR and Progressive design-build projects are procured differently than design-build projects. Typically, in a CMAR, the design-build team is selected based on qualification and experience only. The designer then prepares preliminary plans that allow a builder to provide the owner with a maximum price to build the project. The owner can accept the project at that price, ask for a portion of it to be redesigned to lower the cost, or take the preliminary plans and hire the designer to finish them to bid the project in a manner similar to design-bid-build.
Whichever alternative delivery process the owner decides for the selection of their project, the designer has more freedom to collaborate with the builder to develop plans that are innovative, shape the means and methods, delivered at a faster pace and typically at a lower cost to the owner. The process enhances the outcome of the project.
Providing The Greatest Value
In alternative delivery/contracting, rather than being directed to design a highly-specified physical asset or improvement, as occurs in design-bid-build, we are competing to maximize the positive outcomes of a project and provide the greatest value and benefit to the owner and their customers. To do this, we must thoroughly know the needs, desires, values, preferences, and even long-term vision of the project owner, stakeholders, individual influencers, and customers. The owner is typically using an alternative delivery method because they want to harness the expertise of the designer and builder to get the best project delivered rapidly. For this reason, alternative delivery projects have flexibility in design and construction means and methods not found in design-bid-build projects. It is a very outcome-oriented process, rather than a prescriptive process.
WGI’s Alternative Delivery Expertise
Project owners are increasingly using alternative delivery and it is a growing market for the services of all our WGI Divisions. We are pursuing and delivering many significant alternative delivery projects today that shape our communities. To date, WGI’s Transportation Division has been selected for 42 design-build projects (37 as engineer-of-record) worth a total of $2B.
WGI’s President, Gregory Sauter, says this about WGI and alternative delivery:
“WGI punches way above its weight. Our alternative delivery projects, particularly in transportation, really exemplify this. Our Alternative Delivery Teams help us identify and deliver major infrastructure programs at a size, in terms of scope and fees that are not typically available to us via conventional delivery. They also are typically lump-sum projects which provide an opportunity for creative and innovative delivery methods leading to higher margins. These projects have been and continue to be an important part of the DNA of WGI and our future success.”
Another example of WGI’s outstanding work in the alternative delivery arena is parking. Nearly 40% of the Parking Solutions Division’s winning projects have been delivered using design-build or CMAR. Our geospatial, civil, utility, environmental, drainage, planning, and PLACE team members are all involved in alternative delivery projects. We have received dozens of awards for the design-build projects we have delivered – and there are more on the way.
Are you interested in learning more about the advantages of alternative delivery projects? Speak with one of our team members today – we are happy to have a conversation about your upcoming project!
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