by Jen Luoni
A common belief when awarding MEP contracts is that multiple bids result in competitive pricing. This viewpoint, however, is narrow in scope as it devaluates partnership benefits and enhances the probability of dishonesty which is inherent within the bidding process.
As a performance-based system, design build holds the subcontractor accountable by how the system performs to meet the end users’ goals. As such, risk transfers from the end user to the subcontractor, ensuring attainment of quality benchmarks. The subcontractor is responsible for a high-performance system or reinstating it to that capacity.
While historically specifications have been used to ensure quality, it becomes a moot point if a wrong system was initially selected. The additional benefits of up-front value engineering, low initial cost investment, and reduction in engineering time are cash enhancing attributes of the design build model. Additionally timelines are streamlined by the lack of required engineering drawings.
Let’s explore scenarios where these principles play out:
- Client needs a specialized HVAC system.
- Mechanical engineering firm designs and documents the system.
- Owner competitively bids and awards to a general contractor.
- The contractor installs exactly per the drawing and specifications.
- The system doesn’t meet client’s needs.
ANSWER: The owner. The general contractor installed it fit to the plan thus they are not responsible, while the engineer of record followed the manufacturer’s specifications. The owner is left only with the option of suing the engineer, however that does not resolve the problem.
DB DIFFERENCE: In design build this scenario doesn’t occur. The person installing the equipment is familiar with system operations, enabling better oversight and responsibility to meet the specific requirements at their risk, not the owner.
- Client has a lab project.
- Eyewashes are required by code, but plans produced left them off.
- General contractors bidding on the project realize they are needed but don’t include because it would increase the cost.
- Since it was never on the initial plan, the general contractor leaves it unattended then adds a change order after the project is awarded.
ANSWER: The owner. The architect admits to the omittance and the owner is charged for the change order. With no relation to the contractor, the architect doesn’t feel an obligation to be responsible.
DB DIFFERENCE: If a required part of the job, the contractor is obligated to do it at their cost regardless if present on the drawings. Performance-based design covers system functions and what the code requires, thereby shifting risk away from the owner.
Results and Relevance
If competitive cost is the driver behind contractor selection, the subsequent risks outpace any initial savings. Omitting scope is handled recklessly which inevitably penalizes the owner. The misconception of competition mitigating cost is a fallacy pervading the construction industry. Owner should reap the benefits of performance-based design, thereby reducing overall cost and risk.
Jen Luoni is director of operations – architecture at Dacon Corporation.