Time is of the essence now that Congress has passed and President Joe Biden has signed into law the sweeping, multi-year infrastructure funding package that will provide $1.2 trillion for a wide range of infrastructure categories, including highways, transit, rail, water, power and broadband.
State and local officials realize the need to channel forthcoming funding to the creation, repair and replacement of vital infrastructure as soon as possible, not just to provide for the glaring needs but also to meet the political reality that Americans want to see appropriation become action.
Funding is at the heart of the massive act, but it also includes policy changes, such as a provision that codifies a Trump administration directive seeking to reduce the time it takes federal agencies to issue environmental approvals for major infrastructure projects.
In these cases, integrated project delivery experts such as Haskell offer unique advantages in terms of risk mitigation, budget adherence and speed of delivery.
“I feel there is a moral obligation to ensure that people have sound infrastructure,” said Pete Kinsley, President of Haskell’s Infrastructure & Transportation Group. “It is the responsibility of government to protect public health and welfare, and infrastructure has direct ties to public health and welfare.
“Obviously by making improvements now, it betters people's lives sooner, which speaks to the moral obligation. But when you look at it from a business perspective, having a thoughtful, planned approach to infrastructure repair and replacement is much more cost-effective than responding to catastrophic situations. Stated simply, doing it now saves money in the long run.”
The federal infrastructure package legislation provides funding for a wide range of glaring needs, breaking down as follows:
Certainly, the public has shown a tremendous appetite for infrastructure investment. Thirty-seven states have raised their gas tax to fund critical transportation investments since 2010, and 98% of local infrastructure ballot initiatives passed in November 2020. At least 25 major cities and states now have chief resilience officers. These improvements were proposed by elected officials from both sides of the aisle and have strong voter support. Meanwhile, categories like ports, drinking water and inland waterways have been the beneficiaries of increased federal funding.
“Communities are competing for private company investment, and infrastructure is one of the earliest go/no-go considerations in site selection,” Kinsley said. “They need clean drinking water. They need a reliable power grid. They need efficient and safe roadways. They also need a desirable environment to draw employees. So, certainly, having reliable infrastructure attracts industry, which creates jobs and creates economic benefit locally.”
Long-term underinvestment was exacerbated by the COVID-19 pandemic, which caused many communities to delay or cancel projects. Further, it caused supply chain disruptions that led to material shortages and price escalation.
As funding begins to flow, integrated delivery lends itself to the critical and immediate need for infrastructure repair and replacement, as it is the method most effective in expediting design and construction of critical projects and maximizing the dollars invested.
In design-build delivery, the project owner signs one contract with one entity to provide architectural, engineering and construction services. Design-build has accelerated quickly as project owners’ delivery method of choice. Research by the Design-Build Institute of America (DBIA) found that it now accounts for 44 percent of all construction spending, compared to construction management at-risk at 35 percent and traditional design-bid-build at 19 percent. Further, design-build continues to grow at a pace of 18 percent per year. The greatest growth has been in the manufacturing, educational and highway/street sectors.
The reasons for design-build’s growing popularity are numerous:
Project owners who have used design-build overwhelmingly favor it, with 87 percent of “Failure to Act” respondents saying that they would use the process again in the future. The main reason given for not planning to use design-build is a lack of statutory authority, which is something that the DBIA is working to change nationwide.
“More states have or are putting enabling legislation in place that allows governments to use design-build delivery,” Kinsley said. “In some cases, the existing enabling legislation is broadening, so it can be used on different types and sizes of projects. There is a widely acknowledged increase in the use design-build and progressive design-build in the public sector. Progressive Design-Build is growing faster than any other delivery method right now.”
Progressive Design-Build (PDB) is a phased, or progressive, application of the design-build delivery method. The owner selects the design-builder based on qualifications or best-value selection, then together they work toward a design and contract price. The design-builder delivers the project in two distinct phases: Phase 1 includes pricing-level design development, preconstruction services and the negotiation of a guaranteed maximum price (GMP) for Phase 2, which comprises final design, construction and commissioning.
“Progressive design-build is a delivery method that is good for all parties,” Kinsley said. “It serves owners very well. Projects are delivered in phases, so, from an owner's perspective, it can be a very efficient procurement process. It also gives them the opportunity to meet the team, build relationships and really get to the right price and scope. Or, if it’s not a good fit, they can go a different direction.
“And, honestly, design-builders prefer progressive design-build delivery because, at the end of the day, we want the owner to be pleased with the process and outcome. We want them to get the exact project that they want, and working in the progressive environment gives an owner a platform to be very clear on the scope of work before the design-builder prices the work.”
Collaboration is a feature of all Haskell projects, but PDB takes collaboration to its highest level, with the project owner maintaining active involvement in design decisions throughout.
“When using progressive design-build delivery, the owner chooses their design-builder on qualifications or best-value and together as a team, all critical project needs are identified,” Kinsley said. “Once the owner’s desired project is defined, the work is then priced. This approach eliminates so many conflicts, as the owner controls scope. If the cost of work is not where they want it, this open, transparent and collaborative environment provides the platform to discuss value engineering so owners can make informed decisions to ensure their needs are met. Owners are the final decision makers, and they really appreciate that.”
The advantages of shortened project lifecycles and risk mitigation factor into PDB projects, too. As infrastructure funding becomes available, PDB is the fastest possible method of moving those dollars into the marketplace.
It also ensures that owners are well-protected. In a more traditional setting, the owner accepts the risk of properly and fully communicating the scope of the project in the procurement documents. In a progressive setting, the owner doesn’t bear the responsibility of being so prescriptive.
Although founder Preston Haskell III was a pioneer in design-build delivery and a driving force in the creation of the DBIA, Haskell adapts to best suit its clients and provide the best possible outcomes.
Infrastructure and government procurement come in various forms with a wide range of motivations.
For example, the federal government may use design-build even though it does much of the early design work.
“In many cases, the federal government creates very detailed drawings that are issued as part of their procurement,” Kinsley said. “It appears they are using design-build to transfer risk, not because of speed or their desire to collaborate during design development. A single party is responsible for everything, and the way they protect themselves and control scope is to advance the design prior to procurement. In addition, there are owners that still prefer to have a sealed bid with a price that they can open and compare. While not as effective as progressive design-build, traditional design-build transfers risk from the owner very effectively and is more expeditious than design-bid-build.”
In another example, Haskell’s highly respected Water Division, which represents one of its core markets, does a considerable amount of work as the construction manager at-risk (CMAR). With this delivery method, the designer works directly for the owner, who gains the benefit of incorporating a contractor’s perspective and input during design and planning.
“The fundamental decision that an owner makes when it comes to CMAR versus design-build is control,” Kinsley said. “If they want a single point of accountability, a single point of responsibility, then that's design-build. If they want to maintain that direct contractual tie to the designer but also want early integration and collaboration with the builder, that's construction manager at-risk.
“The collaborative nature of an owner and the designer and the construction manager working in partnership drives innovation and creativity. And we have an innate ability of identifying cost-saving measures through value engineering studies that create significant value.”
Through its Design & Consulting Services Group, Haskell also performs a wide range of design-only work, including master planning and high-level civil infrastructure, road and bridge design.
“The truth is that all industries are going to have a certain percentage of work that is going to remain conventionally delivered, because that is what certain clients prefer,” Kinsley said. “And in those circumstances, there is a need for great design in order to maximize available funds and create world-class engineering for roads and facilities that meet or exceed their intended useful life. There’s a tremendous need for design that is innovative, thorough and well thought-out.”
Haskell delivers more than $1 billion annually in Architecture, Engineering, Construction (AEC) and Consulting solutions to assure certainty of outcome for complex capital projects worldwide. Haskell is a global, fully integrated, single-source design-build and EPC firm with over 1,800 highly specialized, in-house design, construction and administrative professionals across industrial and commercial markets. With 20+ office locations around the globe, Haskell is a trusted partner for global and emerging clients.
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