Assessing the Use of the Design-Build Method in the Highway Construction Industry - Research Paper Example

RESEARCH METHODOLOGY Research Methodology Customer Inserts His/Her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name 9, 03, 2012 (Word Count = 3691) Abstract Many construction firms are pursuing various alternative strategies geared at lowering budgetary costs, improving project quality, and reducing the time required for completion of projects. This paper proposes the use of the design–build- project delivery strategy that can be adopted in highway construction firms. This is an approach of project delivery where the construction and design phases are merged into a single contract. Using this approach, construction firms will get low quotations for their contracts and at the same time get the best value at the completion of the project. This is as opposed to the conventional project delivery methods based on the use of the design-bid- build where construction firms outsource project design contracts. In the later approach, two contracting efforts are undertaken in the procurement of engineering and architectural services. The use of the design –bid-build method is not only very costly for constructing firms but also feared to result into various risks. Such a method, besides paying costly for two contractors is also hard to ensure a timely completion of the project because of the differences in the strategies used by each contractor. It also emerges that many construction firms have had problems related to poor project quality in the past because of lack of full accountability and responsibility. The use of the Design-build method will not only ensure reduced budgetary costs in contracting but also increase project accountability and responsibility, which ensure project quality. Table of Content Abstract ii Introduction 1 Problem Statement 3 The Purpose of the Study 4 Study Rationale 4 Research Questions 4 Literature Review 5 The Design-Build Method 5 The Design-Bid-Build Method 7 Advantages of the Design Build method 8 The Disadvantages of the Design–Build method 9 Implications from Previous Studies 10 Methodology 16 Assessing the use of the Design-Build Method in the Highway Construction Industry 17 Data Analysis 19 Reference List 20 Introduction Highway construction firms are faced with various challenges in the selection and approval of the best contracting methods. These methods are expected to ensure the successful expedition of highway construction projects via the use of a cost-effective budget. Unfortunately, most of the readily available methods are feared to jeopardize the quality of the project and at the same time interfere with the allocated project life, which is feared to result into legal problems (Friedlander 2002). The figure below illustrates a variety of project delivery methods characterized by numerous phases of the life cycle of the project. Unlike the design-build method proposed in this study, a majority of the methods depicted in this illustration are characterized by many functional responsibilities. The use of the design –build method has been tested in various other projects characterized by numerous benefits (Satterfield 2009). Among the common advantages of the use of this method as opposed to the use of conventional methods is the cost effectiveness, timely project completion and increased project management coupled with a high level of project accountability and responsibility. The method has been used in the implementation of nearly 300 construction projects. For instance, in the United States of America, this method was applied in the construction of highways in the District of Columbia. In 2002 to 2004, 50% of the highways were completed within a year. Surprisingly, despite that the budget allocation for the construction was rated at 40 billion, the auditors of the construction work indicated that many of the highways were completed on a minimal budget and with high quality. The use of this method of contracting in the delivery of highway construction projects is depicted by a collaboration of the engineering and the construction contractors. In this regard, the two teams work together on the construction and the design phases of a project. The collaboration of the two parties into a team is geared at ensuring an improved control of the project quality through increased accountability and responsibility (Satterfield 2009). As opposed to the use of distinct procurement procedures for the construction and design phases of a project, the use of the design-build method combines the two phases into one procurement procedure. Problem Statement Because of the high costs implicated in the procurement and successful completion of highway construction projects, there is need to identify the use of the best method that can ensure expedition of the project. At the moment, there are various readily available methods of project delivery that can be applied in this industry. The selection of the best method to be used in a highway construction project requires the availability of an evidenced-based method (Friedlander 2002). Despite that previous studies have provided recommendations on various methods, only a few of such studies have provided sufficient guidelines for highway construction projects. This explains why this study proposes to assess the impacts of the use of the design-build method of contracting in the highway construction industry. The findings in this study will provide vital guidelines on highway construction project sponsors when selecting construction contracts. The Purpose of the Study The goal of this study is to establish the effectiveness of the use of the design-build method of contracting in the delivery of highway construction projects. Study Rationale To test the ability of the use of the design-build method in enhancing better highway construction project management, reduced budget, and project life cycle, the study will address the following objectives. 1. Establish the benefits of the use of the design-build method on the quality of a project, the budgetary cost, and the project life cycle. 2. To establish the effects of the use of this method on construction firms Research Questions To achieve the objectives of the research study, the following questions have been formulated: i. What are the advantages on the use of the design–build method over conventional methods in construction contracts? i. Will the use of the design-build method in construction projects improve the quality of the project, reduce costs in the budget, and ensure speedy completion of the construction project? ii. What should the project developers know when choosing the best method of contracting in construction industries? Literature Review There are various methods that can be used in the delivery of infrastructure construction projects. Some of the methods used separate the responsibilities of different construction phases in a project. This approach is evident in the design-bid-build method. In this method, the roles of the development of a project are segregated and the final design completed by a particular party. The subsequent construction in such a method is awarded to a different contractor, normally, the lowest bidder (Tenah 2001). Other methods of contracting approach the various activities through one contract. This forms the basis of the design-bid method. In addition, there are methods of contracting where the roles are extended beyond the development of the project. Such roles will include the operations, finance, maintenance, and preservation of a project. In the public and private sector, construction firms may have prescribed methods of contracting. However, a majority of constructing firms are at liberty to adopt any contracting method that can expedite the delivery of a project. The Design-Build Method This is a method of project delivery where the architectural and construction phases of a project are performed by one entity in a contract. In this method, the liability for the risk is held by the design-builder. The later warrants the contracting firm that it will commit itself toward the production of error free work (Tenah 2001). The process used in the selection of contracts under this method can be negotiated in a process in which one or many contracts are involved. Alternatively, the selection process can be done through a competitive process on the basis of the price, the project schedule, and the qualifications of the proposer. In this method, some sections of the construction phases of the project may be subcontracted to other construction companies. Alternatively, the design-build entity can work on portions of the construction work. The use of the design-build method of contracting is becoming a preferred method of choice for the delivery of many construction projects. Many public and private firms involved with the development of infrastructure and buildings credit the use of this method for a number of benefits. At the onset of the 21st century, the use of this method had been tested in some construction firms around the globe (Beard et al. 2001). In particular, the United States of America is a country where nearly 95% of the construction projects use this method in contracting. In most of these projects, the design-build method has found application in the construction of buildings. However, at the moment, the use of this method has found wide recognition in the road construction industry. The use of contracting methods in the delivery of highway construction projects dates back to the ages after the Second World War. During the time, the design-bid-build method of contracting was the main method used in the procurement of highway construction projects. The increased recognition of the design-build as a contracting method in the highway construction industry has been as a result of the reported benefits of the use of this method in other construction projects. The Design-Bid-Build Method This is a conventional method of project delivery where the design work is either performed by the contracting agency or another design firm is subcontracted to work on the project design. In a separate contract, another contractor is engaged to perform the rest of the construction work. In this approach, the agency in contracting warrants the contactor that the design of the project is error free. This implies that the risks of the project design are held by the contracting agency. When using this method in construction contracting, negotiable terms are used in the selection process (Tenah 2001). The figure below illustrates a comparison of the build-design and the design-bid-build methods of contracting. This comparison is based on the project timelines where previous studies have indicated that the design-build method has a quick project schedule. In this illustration, the methods are used concurrently and the timelines compared. The projects reflect various construction works in urban settings. Advantages of the Design Build method Compared to the Design-Bid-Build method, the Design-build method of contracting has been shown to have a number of advantages in construction projects (Ashworth 2001). With regard to the reduction of the project timeline, this method has been to ensure speedy project schedules. This is because the involvement of the contractor at the early stages of a project enhances the incorporation of engineering efforts in the designing of the project. This ensures the constructability of the plans. In, addition the use of this method ensures a speeded monitoring of the design of the project with concurrent construction phases. The elimination of numerous construction bids on the completion of designing also ensures that the construction phase is not delayed (Satterfield 2009). This method has been shown to reduce budgetary costs by reducing costs incurred in communication. The method offers increased communication efficiency by integrating the design and construction teams in the entire project. In addition, the use of this method cuts down on the engineering and inspection costs of the project (Ashworth 2001). This quality control services are entrusted to the developer of the design and therefore the contracting agency has reduced costs to take care of. The use of this method also ensures a reduction in the number of changes and orders related to the field data. This is because the identification of errors in the design at an earlier stage eliminates any possible risks that may arise in the construction phase. In addition, the use of this method permits the elimination of potential claims when the project is completed. This is because most issues related to litigation and potential claims are resolved by the design-build team. It has also been demonstrated that the use of this method is characterized by a short project schedule, which reduces the commitment of the members of staff and the entire design-build team. This method has been shown to improve the quality of the project by enhancing the quality control and assurance measure via the use of a continuous involvement of the design team. The Disadvantages of the Design–Build method The following are some of the proclaimed disadvantages of this method. Most of the indicated disadvantages are related to the fact that the use of this method results into changes in the fundamental aspects that affect stakeholders in the construction industry. Among the aspects affected by the use of this method is the level of competition in the construction industry, and the cooperation among stakeholders (Chan et al. 2010). Most critics indicate that the use of this method lowers competition in the construction industry by excluding small construction firms not capable of managing big projects using the design-build method. The critics further indicate that this method favours large construction firms capable of competing for big construction contracts where the small companies cannot compete. With the exclusion of nonprice related factors, the use of this method enhances favourism in the award of contracts. It has also been shown that the use of this method tends to undermine the inherent system used in the balances and checks of construction designs. This is because when this method is used, the design team is not independent of the contractor of the construction. The elimination of the low bid in the selection of the contactor is feared to result into higher project costs (Bruner & O’Connor 2006). Considering other methods of contracting, especially the design-bid-build method, most critics of the use of the design-build method ask if this method allows for adequate confirmation of checks. Such checks are expected to enhance the quality of the project and the integrity of the procurement. This is geared at enhancing fair business in the construction industry. Similarly other proponents of conventional methods of contracting question if the use of the design-build method is the only preffered method in the delivery of all construction projects (Chan et al. 2010). Implications from Previous Studies Similar studies have been done in the past with emphasis on the evaluation of the performance of a project using the design-build method in the construction industry. It is important to indicate that very few studies in the past have focused on the use of this method in the highway construction industry. Several of the studies done in the past examined construction projects in various countries around the world (Bruner & O’Connor 2006).In some of the countries, the use of the design-build method in construction project is a specification of government institutions (Bruner & O’Connor 2006). A majority of these studies vary with regard to the application of their comparison analysis when examining the design-build versus the design –bid build method. The common differences in such studies include the geographic location, for instance, most of such studies have been done in the United States of America (Molenaar & Gransberg 2001). In addition, the studies have also been shown to differ on the basis on the type of project under construction. Some of the studies have examined the use of this method in the construction of buildings, production facilities, rail lines, and bridges, and highways. The approach used in the delivery of projects in some of these studies has also been shown to differ. However, the figure below illustrates some of the key findings from some of the studies done in the past. The Impacts of the Use of the Design-Build Method on the Project Budget, Quality, and Duration The Cost of the Project The results from studies done in the past indicate that the use of the design-build method has various implications on the cost of the project. The impacts of the use of this method are highly determined by the type of the project. In most survey studies where the design-build and the design-bid-build methods are compared, the results indicate that the use of the design-build method has a significant reduction effect on the costs of a project. Normally the costs of a project would increase from the time of the award of the contract to its completion. A main cause of an increase in the project costs following a successful award process is a change in orders (Molenaar & Gransberg 2001). This aspect is common to both the design-bid-build method and the design-build method. However, the design-build method is very sensitive to order changes, especially those caused by third parties. The project timeline With regard to the timeline of the project, the findings depicted in previous studies indicate that the use of the design-build method results into a significant reduction in the time required for the completion of a project. When compared to the use of the design-bid-build method, a particular study indicated a nine percent decrease in the project duration when the design-build method was used (Pekka 2002). The use of the design-build method is credited for reducing both the designing and project construction time. Most of the researchers argue that the procurement of construction projects using the design-build method takes a long time but following the award of the contract, less time is needed to implement the project. Results derived from surveys on projects and program reports from project managers of studies done in the past support the indication that the design-build method reduces the project timeline. Although some projects are characterized by differences in construction phases when compared, it is evident that the use of this method offers a big promise of reducing the long time of contract development and construction time (Chan et al. 2010).The main features offered by the use of the design-build method with regard to the project schedule include: combining the design and construction contracting phases into one, which eliminates further procurement procedures. Integration of the design and the construction phases in the entire project development phase and the production of better designs is another major characteristic of this method (Molenaar & Gransberg 2001). The design produced is normally characterized by minimal errors, which eliminates the extra work of fixing. While using the design-build method, it is also possible to ensure parallel activities on various sections of the project. This is as opposed to the use of the design-bid-build method where most activities are sequential. The illustration below compares the sequence of activities in the development of a construction project when using the design-build approach and the design-bid-build approach. Project Quality Many construction firms are very interested in producing a high quality project. The quality of a construction project is measured by the user satisfaction and the satisfaction of the owner of the contract. The satisfaction of the project owner can be determined from various dimensions including the performance of the project. Similarly, the quality of a project can be assessed with regard to the project evaluator’s point of view with reference to prescribed standards and project prescriptions. In many construction projects, adherence to project specifications and construction standards is measured by evaluating the materials used in the project and the end product. The acceptance of the project is based on the findings of these tests. In the findings from previous research, the use of design-build method is characterized by higher satisfaction of the user and the owner of the project. In addition, the use of the design-build method is characterized by a higher compliance to the expected standards of construction (Molenaar & Gransberg 2001). The satisfaction of the user and the owner of a project following its completion when the design-build method is used is determined by various factors. Among the factors that determine this satisfaction is the method of procurement, the project complexity, the proportion of the project design completed at the award of the contract, and the size of the project. The figure below illustrates the satisfaction of the user and the owner of a highway construction project. When various project designs based on the design-build method are compared to projects based on the design-bid- build method, results indicate a higher satisfaction of the users and project owners in projects based on the design-build method. These projects are also characterized by a high degree of compliance to construction standards. Methodology To fulfill the objectives of this study, a meta analysis of various highway construction projects that have used this method will be performed. A meta analysis refers to a statistical approach that examines the results of various studies based on similar research hypotheses. In this study, various studies on construction projects using the design-build method will be examined and the results compared to provide a better understanding of the benefits of using this method. In addition, the study will also use a comparative analysis of using the design- bid- build approach in construction contacting to assess the benefits of the using the design-build construction contracting method. Information from previous reports on constructing projects related to the cost, project quality, and schedule equally will be used in this study as part of the comparative analysis. To evaluate the cost effectiveness of the use of the design-build method in the delivery of highway construction projects, outcome criteria based on the cost of the project, the duration, and project quality will be used. Assessing the use of the Design-Build Method in the Highway Construction Industry A performance criteria illustrated in the figure below will be used to analyze the implications of using this method in the construction industry. The characterization of the implications of using this method will be compared to the use of the design-bid- build method with regard to project characteristics that comply with the performance criteria. The performance criteria depicted above has been used in previous research studies to assess the effectiveness and applicability of the use of the design-build method in construction projects. The use of this criterion is related to the major objectives of this study and will achieve the standards feared to jeopardize the use of the design-build method. To assess the implications of using this method, this study will use of a comparison analysis of the use of the design-bid vs. the design-bid-build method. This comparison mainly depicts the differences in the use of the two methods with regard to their advantages and disadvantages. The criterion is based on the duration of the project where the time spend from the award of the contact to the completion will be examined. The total cost of the project will also be examined suing this performance criterion. With regard the former, the cost implicated in the planning, administration, design, construction, and quality checking of the project will be depicted. The project quality will be examined with regard to the satisfaction of the owner of the project, the ability to fulfill the expected standards, and the satisfaction of the user. Other aspects that would be adopted in assessing the implications of the use of the design-build method include the equity of the process of procurement. Integration of multiple functions that characterize the process of project development and the transfer of project liability will also be examined. Data Analysis The variables depicted in the meta-analysis study will be subjected to a Partial Least Square test. The later refers to a statistical approach that can be used to measure the efficacy of the structural equation modeling which will be adopted for representing the data in this study. The use of this approach makes it possible for researchers to measure psychometric aspects of the variables depicted in a study. Using this approach, it will be easy to measure the implications of the use of the design-build method in construction projects by measuring the strength of the associations between the study variables. This approach is made up of two equations in the measurement model and the structural model. The measurement model also known as the outer model is made up of equations that measure relationships between the study variables and indicators. The structural model is made up of equations that depict the nature of the constructs in the study. This approach calculates the loadings and the weights of the variables to be measured by the study. The calculated weights will be used in the calculation of the latent variable scores of the study. The later is a measure that reflects the influence of each variable on the other variables in the study. When evaluating the use of the measurement model, an estimate of the internal consistency of each of the indicators will be identified and the validity of the measures tested. Composite reliability will be used in this study to measure the internal consistency of the variables. The Average variance extracted equally will be determined using loading factors for variables analyzed. The analysis will evaluate the implications of the variables with regard to the discriminant and convergent validity, alongside the reliability. Reference List Ashworth, A 2001, Contractual Procedures in the Construction Industry, UNITEC, New Zealand. Beard, L, Loulakis, M & Wundram, E 2001, Design-Build: Planning Through Development, McGraw-Hill, New York. Bruner, J & O’Connor, K 2006, Construction Review, Construction Briefings No. 2007-1, p.30. Chan, D et al. 2010, “Empirical Study of the Risks and Difficulties in Implementing Guaranteed Maximum Price and Target Cost Contracts in Construction”, J. Constr. Eng. Manage vol. 136, no. 495, pp.1943-7862. Friedlander, M 2002, “Design-Build—Legal Obstacles and Solutions”, Journal of Management and Engineering, vol. 6, no. 4, pp. 1-4. Molenaar, R & Gransberg, D 2001, “Design-Builder Selection for Small Highway Projects”, ASCE Journal of Management in Engineering, vol.17, no. 4, pp. 123-125. Pekka, P 2002, Innovative Project Delivery Methods for Infrastructure—An International Perspective, Finnish Road Enterprise, Helsinki. Satterfield, Z 2009, “Tech Brief. Design-build”, National Environmental services, vol.9, no. 2, pp.1-4. Tenah, KA 2001, “Project Delivery Systems for Construction: An Overview”, Cost Engineering, AACE International, vol.43, no.1, pp.30-36. Read More