Project Delivery Methods (Plus How to Choose the Right One)

By Indeed Editorial Team

Published November 12, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Project delivery methods provide different ways to organize services, such as planning, design, and construction. They can help you show clients that you're organized and that they can trust you to submit a high-quality final product on time. Knowing about the different methods of project delivery and understanding how to select the right one can help you achieve success in your project. In this article, we define project delivery methods, discuss four common types, and provide steps on how to choose the most suitable one.

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What are project delivery methods in construction?

Project delivery methods are the different ways a construction company organizes and provides services. They define the relationship between parties involved, such as the owner, designer, and contractor, and when and how they may execute their responsibilities. These methods emphasize the steps firms take to deliver these services throughout the entire duration of the project. They provide clarity on the expectations of each party, including payment processes and schedule details.

It's vital to choose the method and contract format at the beginning of the planning phase. Selecting the most suitable method that's tailored toward the specific needs, preferences, and objectives of the project prevents potential misunderstandings and helps the project to run smoothly.

Related: A General Overview of the Construction Phases of a Project

4 types of project delivery methods

These project delivery methods typically focus on the budget, design elements, and timelines of different construction projects. Here are four of the most common methods:

1. Design-bid-build

This is a highly popular method, as it usually results in a lower construction price. It's often used when working on larger commercial projects. Even though this method usually takes a longer time, it enables effective collaboration between engineers, architects, and construction workers throughout the construction process. The design-bid-build method consists of three different phases, namely the design phase, the bid phase, and the build phase. Here are more details of each phase:

Design

This phase begins with the project owner hiring an engineer, architect, or designer to design a new property or facility. They prepare any necessary drawings, models, or other graphics to showcase their overall design and layout ideas. Then, the project owner reviews these specifications and creates tasks that are necessary for contractors and subcontractors to do to complete this project. The final part of this phase entails the project owner opening the project for bids to contractors.

Bid

During the bid phase, contractors review the project's drawings, specifications, and needs. They may clarify any questions they have with the project owner or the designer and speak to subcontractors while preparing their bid. Each bid consists of the contractor's best price for a project, required materials, and estimated timelines. After all the contractors have submitted their bids, the designer reviews each bid, requests any additional information from the contractors, and selects the bid that's best for the project owner's needs.

Build

After selecting the winning bid, the designers and contractors build the new property or facility. The designer closely oversees the progress of the project and provides suggestions and feedback to ensure the client receives a high-quality final product. This is a unique feature of this method that's not present in the other methods.

Related: The Complete Guide to the Construction Planning Process

2. Design-build

This method is more suitable if there's a shorter timeline to complete the project. It's shorter than the design-bid-build method, as one person fills the contractor and designer roles, called the design-builder. This professional may be an architect, contractor, or engineer and they're in charge of the design and construction process from start to finish. They function as the point of contact between subcontractors and the project owner, allowing for more efficient communication.

This method begins with the project owner providing the initial project design the client prefers and requesting for project proposals from design-builders. The design-builder then submits a bid along with notes on the project design. These notes usually describe the adjustments the design-builder wants to make if they get chosen to undertake the project. Project owners typically select the proposal that has the best value and meets the client's requirements. Once the owner chooses a proposal, the design-builder and their team start to secure permits and begin construction immediately.

Related: How to Become a Construction Manager in 7 Steps

3. Construction Manager at Risk (CMAR)

This is derivative of the design-bid-build method. Instead of hiring a designer to oversee the project, the project owner hires a construction manager. The method is ideal if the project owner lacks experience in managing a construction process, as the construction manager usually becomes the owner's representative at every stage. This is because construction managers in this position have a high level of expertise and experience. This method begins with the project owner bringing the client's initial design to their preferred construction manager. The construction manager may consult with designers to create the plans for the project.

During the design phase, the construction manager may work with a value engineer to look for ways to save costs and create a budget. They then present the project owner with their guaranteed maximum price (GMP). This is a price threshold that they promise not to exceed. They then take bids from contractors and select the one that best fulfills the client's requirements without exceeding the GMP. The construction manager then works closely with the contractor to create the construction timeline, monitor the progress and quality of the project, and communicate any updates from the client.

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4. Job order contracting

Job order contracting involves completing multiple projects within one long-term contract, instead of single-project contract, like in the other three methods. This is an ideal choice if there are several ongoing projects in a year. In this process, project owners accept bids from contractors at the beginning of the contract. As they approach new projects, they review these bids to find the one that's most tailored to their specific project needs. This is more efficient, as it eliminates the process of receiving and reviewing new bids for each individual contract.

The chosen contractors can perform the work for the project owner anytime the owner requests it. Projects typically begin with a joint scope meeting, which establishes the individual project's needs, goals, and tasks by distributing a scope of work. After they set the scope, the contractor submits a price proposal for the total project cost. The owner reviews this before starting on the project. This method is ideal for small to medium projects, such as maintenance tasks, repairs, and renovations.

Related: What Is Construction Project Management? (Plus Benefits)

How to choose the best project delivery method

Choosing the right delivery method entails carefully reviewing the specifications, timelines, and requirements of the project. Here are some steps you can follow to select the most suitable project delivery method:

1. Define the purpose of the project

The first step is to review the project and determine its goals. Set up meetings with the client to discuss goals and develop clear milestones of your own. Knowing the overall purpose of the project and understanding what your goals are can help you clearly communicate ideas and objectives to team members, designers, and contractors when you're requesting bids and proposals.

Related: 12 Types of Construction Drawings (With Definition)

2. Set a budget

Determining the budget of the project helps you decide which bids to accept and the number of team members to hire. For example, if your budget is quite low, it may not be feasible to use the design-bid-build method, as it might be necessary to hire both contractors and designers. In the process of deciding on a budget, think about the number of people you can hire, the tools you require, and software systems to use. It's also important to consider if the budget can accommodate any change orders.

3. Elaborate on the complexity of the design

Think about the level of detail and complexity of the project's design. If clients want a unique design, select a method with a structured design phase. If not, consider using the construction manager method as it focuses more on the construction rather than the design.

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4. Create a schedule

Find out when the client requires the project to be completed by and set deadlines on the project's various tasks based on that information. If the client allows flexible deadlines, select a method with multiple design and build phases. If there's a fixed deadline, choose a method that has fewer phases. It's essential to communicate the schedule with the contractors clearly and finalize it with the clients before starting the construction.

5. Review the required level of expertise

The method you select usually depends on your own expertise. Think about whether you have experience in managing a construction project of similar scope and size. If you have little experience, choose a method that allows the construction manager to have more control over the project. If possible, it's beneficial to shadow the construction manager and get hands-on experience so that you can choose methods that give you more control over future projects.

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