Report by RCD/RSMeans Market Intelligence shows steady growth in the use of design-build project delivery.
The Design-Build Institute of America (DBIA) is pleased to provide up-to-date information on the use of the design-build project delivery method in the United States. Design-build is an integrated approach that delivers design and construction services under one contract with a single point of responsibility.
The study, which was completed at the end of May, shows slightly more than 40 percent of market share for design-build, with steady growth of the delivery method since 2005. Usage rates and market size were calculated for projects bid between 2005 and 2010. For purposes of comparison the delivery methods analyzed include design-bid-build and CM-at-Risk in addition to design-build. The study was completed by RSMeans Reed Construction Data Market Intelligence, one of North America's largest information providers to the design and construction industry.
The report breaks down the percentage of design-build projects within nine non-residential building categories. Not surprisingly, design-build is the delivery method of choice for military construction projects. Close to 80 percent of military construction projects, including housing and offices, are delivered via design-build. Design-build for medical construction, which includes hospitals, clinics, nursing homes and offices, and design-build for commercial construction (offices and parking garages) have exceeded 40 percent of market share.
Not surprisingly, design-build is more likely to be used on larger projects. Over the course of 2005 to 2010, the use of design-build advanced on project values above and below $10 million; however its rise was particularly marked on projects valued above $10 million dollars, where design-build was the delivery method on more than half of the projects.
As the only organization that defines, teaches and promotes best practices in design-build, DBIA is regularly approached for information on the use of design-build in the United States. “Anecdotal evidence, including significantly increased demand by owners for DBIA education, pointed to design-build’s rising market share,” said Lisa Washington, DBIA executive director. “The desire for both hard data and third-party validation of the growth of design-build, as well as data to support where DBIA educational efforts need to be focused, prompted us to commission the research.”
The research team drew upon RCD RSMeans’ proprietary database of historical and planning construction projects data as the basis for the study. In addition, the study incorporated other publicly and privately available data sources. Detailed data on nearly 1,000,000 construction projects, 300,000 plans and specifications, historical and current material and labor construction costs and historical and projected demographic data was integrated for valid comparisons. The research team estimates that 95 percent of public projects and 75 percent of private projects were captured for the purposes this analysis.
The report also shows that the design-build delivery method is used most frequently in the Pacific Census Regional Division (Alaska, California, Hawaii, Oregon and Washington) and the South Atlantic Division (Delaware, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia, and the District of Columbia). Design-build is least likely to be used in the New England Division (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont) and the West North Central Division (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota) regions.
The fact that some divisions lag behind the rest of the country in adopting design-build project delivery comes as no surprise to DBIA and its members. Officials at the state level in these areas of the country have been slow to authorize their agencies to use the delivery method for building projects, although Minnesota and Missouri, for example, have allowed the use design-build for transportation projects with great success.
“This report makes clear that design-build is an established and proven method of project delivery and is becoming commonplace in much of the country,” said Richard Thomas, DBIA’s vice president of advocacy and external affairs. “It is our hope that public owners in states that limit use of design-build among their agencies will reconsider their policies now that hard data shows design-build is increasing market share.”
Although both water/wastewater and transportation are areas in which design-build is growing very rapidly, it is important to note that this study focuses exclusively on vertical construction markets.
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