Residential and commercial building sectors are responsible for approximately 7.9 percent of carbon dioxide emissions globally and approximately 40 percent of energy consumption in the U.S.1 The U.S. building industry is capable of designing and building more sustainable projects that have lower environmental impact. However, doing so can add a first cost that owners have been hesitant to pay. This tendency has been exacerbated by traditional design-bid-build (DBB) project delivery, in which the emphasis throughout both design and construction is to reduce the capital cost of a facility.
Greater cultural awareness of environmental issues has persuaded many building owners to “go green.” For others, motivations include healthier long-term living conditions, increases in tenant base and profit potential, as well as decreased ongoing energy costs. Regardless of cause, high-performance building is growing and shows few signs of slowing down.
Research has shown that integrated delivery methods or methods with a greater degree of early team integration were superior in meeting owners’ stated goals on schedule, cost and quality.2 Similar research into the effect of procurement procedures has found that procurement procedures may in fact have a larger impact on success than project delivery methods.3
While the impact of project delivery methods and procurement procedures on schedule, cost and quality goals is well documented, their influence on sustainability goals is in need of further study. The Charles Pankow Foundation and the Design-Build Institute of America commissioned a study to determine the effect of project delivery methods on achieving higher-performance sustainable buildings. The study is being conducted by a team of researchers from the University of Colorado, University of Oklahoma, Pennsylvania State University and Michigan State University, extending over a two-year period from September 2008 to September 2010. The first phase of the research involves a definition of the state of practice in project delivery and green building. The second phase of the research will document case studies for each of the major project delivery methods.
To understand the state of practice, the research team employed a three-tiered research approach encompassing:
- industry survey
- content analysis
- structured interviews
The industry survey elicited 230 responses from Leadership in Energy and Environmental Design Accredited Professionals (LEED APs) regarding the project delivery methods, procurement procedures and certification level on specific LEED certified projects. The content analysis was based on solicitation documents from 92 public and private projects representing over $2.2 billion in building investment. Structured interviews were conducted with members of the industry as well as with owners to help interpret the results. Responses were received from 47 of 50 states and the District of Columbia.
The study found that all project delivery methods (design-bid-build or DBB, construction manager-at-risk or CMR and design-build or DB) had been used to achieve all levels of LEED certification (certified, silver, gold and platinum). It also found that all procurement procedures (low bid, best value, competitive negotiation, qualifications-based selection and sole source) had been used to achieve all levels of LEED certification. However, some delivery methods and procurement procedures were more successful than others. Success was assessed through the ratings by LEED APs who have completed certified projects and by identifying those projects that met or exceeded their initial LEED rating goals. Two key facts relating to success are:
- Integrated project delivery methods are used in 75 percent of the projects surveyed; and
- QBS procurement was most successful procurement procedures.
Delivery methods for sustainable projects
Integrated delivery methods (DB and CMR) were used for 75 percent of the certified projects surveyed in this study. This is not surprising; the ability to integrate construction knowledge early in design is essential to maximizing sustainability. Strong industry preferences and biases on project delivery methods for LEED projects are confirmed by a number of survey respondents.
A typical comment is associated with an Oregon LEED Silver CMR project: “As a GC, we will NOT bid a LEED project if it is DBB.” Another comment related to a Missouri LEED Silver DB project shows the same industry preference/bias, “Can’t do it [earn LEED certification] if you don’t use DB.” To show the full range of attitudes toward LEED and project delivery methods, a comment connected with an Ohio LEED Silver DBB project is interesting: “The design dictates the level of sustainability … Nothing else.”
Finally, a comment about a Texas DBB project that failed to achieve certification is instructive: “Ability to negotiate is a key need during design and procurement to allow flexibility in design and cost.” Apparently, this respondent was alluding to the potential for the negotiation of scope and budget which is inherent to CMR and DB, and not available in DBB.
Therefore, when an owner selects a project delivery method, constraints are created that will affect the design and the final decision, and may ultimately affect the achievement of sustainability goals.
Procurement procedures for sustainable projects
For each project delivery method we must consider a number of procurement procedure options. Table 1 shows the five different procurement procedures sampled in this study. They range from low bid to sole source. One can see that the highest success rates were associated with the procurement procedures that did not include price in the selection process. Competitively negotiated procurement placed third with best value a close fourth and low bid scoring a full 10 percent less than best value.
Again, all four LEED certification levels were successfully delivered using all five procurement procedures. QBS procurement is normally used in both DB and CMR projects where construction price is negotiated after the award of the contract through a guaranteed maximum price. Best value and competitively negotiated procurements tend to be popular for DB lump sum projects. Low bid is usually reserved for DBB projects. However, each procurement procedure had at least one instance of each of the three project delivery methods.
Most integrated project delivery methods either eliminate price competition or include price as one of several factors evaluated to make the contract award.
The results of this study provide insights for owners seeking to achieve their sustainability goals. While all project delivery methods are in use, integrated project delivery methods are most commonly applied to projects seeking LEED certification. If owners choose QBS procurement methods to select team members, they may increase their chances to meet or exceed their sustainability goals.
The complete results of this research are available from the Charles Pankow Foundation in a report titled “Sustainable, High Performance Projects and Project Delivery Methods: A State-of-Practice Report” (www.pankowfoundation.org).
Table 1: Impact of Procurement Procedure on Final LEED Ratings (PDF)
Footnotes:
1 Intergovernmental Panel on Climate Change (IPCC). (2007). “Climate Change 2007: Synthesis Report.” Geneva, Switzerland; and Energy Information Administration (EIA). (2008). “Annual Energy Outlook 2009.” Office of Integrated Analysis and Forecasting, United States Department of Energy, Washington, D.C.
2 Konchar, Mark, and Sanvido, Victor. (1998). Comparison of U.S. project delivery systems. Journal of Construction Engineering and Management 124, (6): 435-44; Pocock, J., Hyun, C., Liu, L., and Kim, M. (1996). Relationship Between Project Interaction and Peformance Indicators. Journal of Construction Engineering and Management 122 (2): 165-176; Ling, Florence Yean Yng, Swee Lean Chan, Edwin Chong, and Lee Ping Ee. (2004). Predicting performance of design-build and design-bid-build projects. Journal of Construction Engineering and Management 130, (1): 75-83; and Hale, D., Shrestha, P., Gibson, G.E., and Migliaccio, G. (2009). Empirical Comparison of Design/Build and Design/Bid/Build Project Delivery Methods. Journal of Construction Engineering and Management 135, (7): 579-587.
3 Ibbs, C. W., Young Hoon Kwak, Tzeyu Ng, and A. Murat Odabasi. 2003. Project Delivery Systems and Project Change: Quantitative Analysis. Journal of Construction Engineering and Management 129, (4): 382-7.