Project Delivery

The project delivery method can be defined as a system used by an agency or owner for the purpose of organizing and financing design, construction, operations, and maintenance services for a structure or facility by signing legal agreements with one or more entities or parties.

Project Delivery Methods

1. Design-Bid-Build (DBB) or Design-Award-Build (DAB) – In this method an owner develops contract documents with an architect or an engineer that consists of a set of blueprints with detailed specification. In this method the bids are solicited from contractors on the basis of these documents. A contract is then given to the lowest responsive and the most responsible bidder.
2. DBB with Construction Management (DBB with CM) – In this method with partially completed contract documents, the owner will hire a construction manager that acts as an agent. After which as substantial portions of the documents are completed, the construction manager will solicit bids from suitable subcontractors. This thereby helps the process of construction to move more quickly and thereby allows the owner to share some of the critical risk prevalent in the project with the construction manager.
3. Design-Build (DB) or Design-Construct – In this method the owner develops a conceptual plan for a project, an thereafter solicits bids from joint ventures of architects and/or engineer and builders for the design and construction planof the project.
4. Design-Build-Operate-Maintain (DBOM) – DBOM takes DB one step further by including the operations and maintenance of the completed project in the same original contract.
5. Build-Operate-Transfer (BOT) – The BOT method of project delivery represents complete integration of the process as the same contract governs the design, construction, operations, maintenance and financing of the project. Where after some specified period, the facility is transferred back to the owner.
6. Integrated Project Delivery (IPD) – IPD is a project delivery method in which the interests of the primary team members are so aligned that the members can be integrated for optimal project performance thereby leading to a collaborative, value-based process that aims to deliver high-outcome results to the entire project
7. Public-private partnership (PPP, 3P, or P3) – This project delivery method involves a public–private partnership which is a cooperative arrangement between one or more public entities (owner) and another (private sector) entity in order to design, build, finance, operate and maintain, the project for a defined time period on behalf of the owner.

Two key variables responsible for the bulk of the variation between delivery methods are – Extent of the integration of the various service providers and extent to which the owner is directly financing the project.

At time when various service providers are segmented, the owner holds the maximum control, but this control is costly which does not give each provider an incentive to optimize its contribution for the next service. So when there is a strong integration between providers, each step of the delivery keeping in mind the future activities, that results in cost savings, thereby reducing the owner’s influence throughout the project.

Here, the owner’s direct financing of a project implies that the owner directly pays the providers for their services. But in case of a facility with a constant revenue stream, indirect financing becomes feasible. So rather than being paid by the owner, the providers are paid with the revenue collected from the facility’s operation.

Many a times, indirect financing risks are mistaken for privatization. Even though the providers will have a concession to operate and collect revenue from a facility that they built and financed, yet the structure itself remains the property of the owner (generally a government agency in the case of public infrastructure).

Releasing the Project Team

The process of releasing the project team members is not considered as an official process. But , at the conclusion of the project, the project team members are released, such that they go back to their functional managers or are assigned a new project. It therefore becomes very important to keep their managers, or other project managers, informed as the project completion time nears, in order to have a plan of action ready for the returning employees. It is better to inform the managers in advance few months in advance about the schedule so that they can accordingly plan on using their employees on new projects.

Final Payments

Ideally, the final payment is much more than a simple percentage of the work which remains to be completed. The completion of the project might involve rectifying most difficult problems which may be unreasonably expensive to solve, therefore the final payment must be large enough to boost the vendor to assign high priority to the project so that it can be completed within the stipulated time.

In case all the contractual obligations are met by the supplier, including fixing problems and making repairs as specified in the to-do list, then the project team signs off on the contract and submits it to the accounting department for final payment. Thereafter, the supplier is notified that the last payment is final leading to completion of the contractual agreement with the project.

Post-Project Evaluations

Just before the team is finally dissolved a final review is conducted to examine the lessons and interpretation learnt from the project, also known as lessons-learned meeting or document. In this session the team discusses all the events  – including what went well and reason for the same. It is also discussed whether the process is transferable to other projects and also explores what did not went well, together with their experience. The aim of this review is not to find blame, but to learn from experience.