Increasing Municipal Project Value Through Alternate Delivery

by Andrew Green, Business Development Manager

There will always be purchases where low prices will make the decision for the consumer. Socks, fast food, and almost anything bought at a Wal-Mart typically fall into this category. But there are other purchases where more long-term consequences need to be considered. We call this the “total cost of ownership”. This category typically includes larger purchases like a new vehicle or a house. There is often a direct correlation with price and quality – they rise and fall together. As the quality increases, the price tends to increase as well. ­

Municipalities are regularly put in lose-lose situations when it comes to project funding. Getting money allocated for a particular project can be a dogfight in itself. Once there is money allocated, there comes with it very little wiggle room in terms of project costs. Our contention is that, when it comes to major upgrade projects (or any large project, for that matter), the total cost of ownership should take precedence over the low price approach. One way that is accomplished is through alternative delivery approaches to the bidding process.

What They Are

“Alternative Delivery” can easily be defined as anything other than traditional “design-bid-build” projects. Different options for alternative delivery include design-build and construction manager at risk (CMAR). There are a myriad of benefits seen through conducting an alternative delivery bid process including (but not limited to) reduced risk, reduced cost, and fewer headaches from constant coordination and change orders.

Rest assured, no method is right for every project. But if the total cost of ownership is not considered, the owner is going to end up paying more money in the long-run for the project. In other words, having a design-bid-build process as the default is likely doing more harm than good. Here’s how the different project approaches compare:

Design-Build Comparison
Design-Build Comparison

Unfortunately, alternative delivery receives a lot of negative publicity in the southeast as it is seen as a violation of bid laws in certain states. We should all be working together with our legislators to pass laws that are favorable towards alternative delivery methods in order to deliver maximum value to our municipalities and their respective constituents.

The Design-Build Institute of America is packed full of ways to get involved in these discussions. The organization is passionate about executing better, more cost-efficient projects nationwide through alternative delivery options and are thrilled to help anyone get involved. We not only have a duty to our customers/constituents but also to ourselves to be consistently improving in how we provide them with clean drinking water and wastewater treatment processes. Check out DBIA and find out how you can get involved today!