CLDB projects work best with the builder leading the way

Construction-led design-build (CLDB) insights

• Design-build, increasingly popular in construction, sees the builder’s early involvement lead to significant cost savings and shortened schedules, benefiting owners.
• Construction-led design-build (CLDB) further enhances cost control, schedule accuracy, and quality, aligning with industrial owners’ unique needs for efficiency.
• Leveraging modular construction and skilled labor analysis, CLDB projects maximize efficiency, showcasing the builder’s pivotal role in future industrial projects’ success.

The design-build project delivery method has been around for decades, but in the last 20 years its popularity soared in the construction industry. Today, it accounts for more than 40% of non-residential building projects and is poised to become the dominant method in the next five years.

The reason for this is construction teams realize that by bringing the builder in during the design process and allowing them to play a more prominent role from the onset typically results in tremendous cost savings, while shortening schedules significantly.

As this design-build era evolves, savvy owners, particularly those in the industrial sector, have discovered a variation of the method better serves their unique needs.

Construction-led design-build (CLDB) elevates the influence of builders even further, resulting in even greater benefits in terms of cost, schedule and overall quality. The strategic advantages the builder provides in the lead role are clear, but as with any shift away from the paradigm, it helps to have a basic understanding of where those advantages are found and why.

Figure 1: As this design-build era evolves, savvy owners, particularly those in the industrial sector, have discovered that a variation of the method better serves their unique needs. Courtesy: McCownGordon

Optimizing costs for project design

When assessing the value of the design-build approach, one fact stands out above them all. On a typical large-scale industrial facility project, over 90% of the capital costs relate to procurement and construction, meaning less than 10% is devoted to design-related costs. Having a stakeholder with the better insight into the building side of the formula offers a much greater opportunity to control the cost and schedule in a way more favorable to the owner.

One of the advantages of the design-build model in general includes gaining more accurate cost estimates at the project’s onset, allowing the owner to establish a budget, mitigating financial risk down the line. However, the degree of accuracy often varies depending on whether it is the designer or the builder tasked with determining those estimates.

A designer, or engineer, will typically use industry established unit-based metrics costs for materials and installation, and catalog pricing to determine equipment costs. Although these figures may be routinely updated, they are still just estimates. When it comes time to place the order, often fluctuations have occurred, especially in today’s volatile market.

The builder, however, is more firmly grounded in the day-to-day practice of purchasing materials and paying for construction labor.

They work with better data that is more reflective of the real-time conditions in the marketplace. The builder also understands while the going rate for, say, installing a linear foot of utility pipe may be $X, on the particular project in question, it will be higher due to challenging site conditions or design configurations.

Many builders employ in-house analysts to track economic trends and to assist project managers in navigating diverse market conditions. On CLDB projects, these analysts offer the ability to enhance decision-making by providing more accurate information about what is currently being experienced at the local, regional, national or international level.

This ability of the builder allows them to provide more accurate cost estimates and secure more competitive pricing.

Understanding the challenges subcontractors face when executing a specific design is critically important because anything that deviates from the norm will have an impact on labor costs. Since the builder often works with subcontractors in the field, they have a much better gauge what the actual costs will be based on.

This dynamic recently played out on a project to expand the production line of a pharmaceutical facility. The design firm hired to develop the concept used historical data from the region where the facility is located to establish the initial project budget. When a CLDB partner later joined the team, their construction professionals identified budget gaps.

Using more precise data for the particular geographical location of the project, and factoring in real-time costs that accurately reflected the impacts of inflation, it was discovered the budget was off by over 40%. Fortunately, this discrepancy was uncovered early enough that several cost reduction options identified by the CLDB partner could be implemented and the project was completed with the funds the client made available for the expansion.

Figure 2: Construction-led design-build (CLDB) elevates the influence of builders even further, resulting in even greater benefits in terms of cost, schedule and overall quality. Courtesy: McCownGordon

Develop realistic schedule expectations

These same dynamics come into play when it comes to scheduling. The builder understands a job that normally might take X number of hours, will more likely take X+ hours based the specific field project conditions. The builder also brings a better understanding of how work can be sequenced, and which tasks can be effectively undertaken simultaneously to produce a more favorable schedule.

Perhaps the bigger advantage the builder offers when leading a design-build project is their ability to provide better estimates for material delivery. Much like how costs are constantly fluctuating, material availability and delivery times often fluctuate.

For example, the conduit specified for a particular project may be in ready supply one month, but become a scarcity the next, depending on changes in the market. The builder is better positioned to anticipate these types of fluctuations and factor them into the schedule.

When designing a facility, engineers often focus on the finished product — meeting the requirements of the owner, with an emphasis on functionality, safety and quality. All of these are important elements of a successful design, but it leaves out one critical element: How the design itself will affect the time it takes to build the facility. It should come as no surprise that when it comes to constructability, the builder is the resident expert on the design-build team.

Situations may arise when a seemingly more expensive building material becomes more affordable in the long run due to both its availability, and the availability of the necessary work force to install it during the prescribed time period. An understanding of the local labor market also should be considered when making design decisions.

Site logistics ranks as another area with unique complexities that can only be fully understood by someone who has spent a great deal of time on a work site. Many manufacturing projects are build-outs or expansions of current facilities. Understanding the challenges of constructing in constrained conditions will produce better designs, along with more accurate estimations of cost and time. Understanding the ongoing production processes of a particular manufacturer will help to avoid operational disruptions, while adhering to established regulations for maintaining security and working conditions.

In one case, a national beverage company needed to expand their manufacturing facility to accommodate new bottling equipment. The designer hired for the project developed a structural steel concept that assumed it would be best to use the same type of structural components used in the existing building. When the construction professionals reviewed the plans, they immediately identified a serious problem.

Those specified structural members had become increasingly difficult to procure due to disruption in the global supply chains. However, they identified a suitable and more readily available alternative that the structural engineer incorporated into the design. This working familiarity with the materials market helped the owner avoid a four-month delay and construction of the new production line was completed on schedule.

Figure 3: When assessing the value of the design-build approach, one fact stands out above them all. On a typical large-scale industrial facility project, over 90% of the capital costs relate to procurement and construction, meaning less than 10% is devoted to design-related costs. The stakeholder with the better insight into the building side of the formula offers a much greater opportunity to control the cost and schedule in a way more favorable to the owner. Courtesy: McCownGordon

What’s needed to get a CLDB project done

A proven approach deployed on CLDB projects is to convene representatives from the key trades required of a project to engage in “pull planning.” This provides an opportunity to walk through a 3-D model of the facility to determine optimal sequencing plans and identify any potential roadblocks not anticipated during the initial design. On designer-led projects, it is much less likely trade partners will have the opportunity to use their expertise to positively impact the project schedule.

Understanding the labor market marks a key benefit offered by the builder. In a time where almost every sector and geographical region are facing a shortage of qualified workers, this has become a critical element that must be factored in from the start.

A strong local labor force is almost always preferred due to availability and reduced costs associated with travel and lodging. However, local providers still need to be vetted by carefully examining their record for performance, safety and reliability.

On larger projects in particular, there are times when it may be more beneficial to bring in labor from outside the area, despite the additional costs, if the project will be expedited due to better skilled workers.

Examining the labor force and making expert decisions based on this analysis is something most engineers are simply not accustomed to doing. Many would not even consider the importance of doing so. For a builder, it is part of the world they are immersed in every day and plays a heavy role throughout the design-build process.

Figure 4: A proven approach deployed on CLDB projects is to convene representatives from the key trades required of a project to engage in “pull planning.” This provides an opportunity to walk through a 3-D model of the facility to determine optimal sequencing plans and identify any potential roadblocks not anticipated during the initial design. On designer-led projects, it is much less likely trade partners will have the opportunity to use their unique expertise to positively impact the project schedule. Courtesy: McCownGordon

Leveraging modular construction

Modular design and off-site fabrication are becoming increasingly common in construction, and it offers specific advantages on manufacturing facilities. For example, constructing structural platforms on-site for a plant expansion presents challenges that can impact the quality and integrity of the final product. Cramped work areas situated next to an operating assembly line staffed by numerous workers is not the ideal condition for building a structure that must meet critical loading requirements.

Fabricating these platforms off-site in a factory setting eliminates those challenges. It requires the latest technology in modeling and laser scanning to ensure exact measurements to allow each piece to be installed precisely once on site.

Knowing when and where a modular solution can provide better value than traditional construction requires a unique level of expertise and understanding that falls on the contractor side of the equation.

Given the significant impact it can have on a project’s cost and schedule, it is a skill set an owner should prioritize when deciding who will lead their design-build project.

CLDB’s growing role for future projects

As design-build assumes its place as the preferred delivery method for industrial and other large-scale projects, owners are discovering the competitive edge that CLDB can provide.

From more accurate cost estimates and better integrated schedules, to improved constructability and enhanced market adaptability, the potential benefits realized when the builder takes the lead are real and undeniable.

Finding a builder with the experience, confidence and team-building skills to serve in that role may require a wider net be cast during the selection process, but the rewards of will be worth it.

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