Alternative Project Delivery (APD) methods are reshaping the construction landscape at a staggering pace. APD is currently utilized in nearly 40% of all non-residential construction projects, representing a $500 billion annual market value. Yet, despite this immense impact, many firms, agencies, and stakeholders are still working to understand and fully adopt these evolving practices.
APD methods, which include Construction Manager/General Contractor (CM/GC), Design-Build (DB), Progressive Design-Build (PDB), Integrated Project Delivery (IPD), and Public-Private Partnership (P3), have shifted the traditional, linear approach to planning, designing, and building infrastructure into more integrated, collaborative, and efficient processes. These methods have proven to increase efficiencies, reduce costs, improve quality, and expedite project delivery.
In this first post in a series, we'll delve deep into understanding APD, its components, significance, and the way it's poised to redefine the construction landscape.
Whether you're a seasoned pro looking to stay abreast of the latest industry trends or new to APD and eager to understand more about these delivery methods, we invite you to join us in this series: APD 101.
What is Alternative Project Delivery?
Alternative Project Delivery is an umbrella term that refers to several construction project delivery methods that differ from the traditional Design-Bid-Build paradigm. In the past 10 years, public and private agencies have rapidly expanded the use of APD to reduce risks, foster enhanced collaboration, expedite project delivery timelines, and stimulate innovation.
Typically, APD models consolidate project design and construction services into a unified project delivery team. This unification catalyzes a collaborative environment, nurtures innovation and drives a shared sense of risk management among the Owner, Design/Engineering, and Construction teams.
When selecting a specific APD method for a project, Agencies often consider an array of factors, such as the project's complexity (including environmental, traffic, stakeholder, and access), risk allocation, budgetary considerations, and scheduling constraints.
Alternative Project Delivery Methods: A Closer Look
While Alternative Project Delivery isn't a novel concept, the methods under its umbrella are continually evolving. They're reshaping how stakeholders navigate project planning, delivery, and operation, reinforcing a cultural shift in the industry towards integrated and cooperative models. As we mentioned above, APD methods include Construction Manager/General Contractor (CM/GC), Design-Build (DB), Progressive Design-Build (PDB), Integrated Project Delivery (IPD), and Public-Private Partnerships (P3).
Construction Manager/General Contractor (CM/GC)
The CM/GC delivery method is a two-step process to expedite project completion. Typically the engineering/design team and the contractor are selected separately through a qualifications-based procurement, and both report directly to the owner through the project lifecycle. During the design phase, the contractor provides the engineering/design team invaluable input regarding construction feasibility, innovations, early work scopes, and best means and methods to accomplish the work. The contractor's involvement during design development allows for early identification and mitigation of risks, formulation of cost projections, and refinement of the project schedule.
At the completion of the design, the project owner, contractor, and the owner's cost adviser (the "Independent Cost Estimator" or "ICE") negotiate the final construction contract price, referred to as a Guaranteed Maximum Price (GMP) or Agreed Price (AP). If the parties agree, the construction phase is initiated.
Design-Build (DB)
The Design-Build delivery model combines design/engineering and construction services into a single contract, reducing risk and delivery time. A project design is typically advanced to 30% completion by the Agency before a design-builder is selected through a two-phase procurement.
Phase 1 is a qualifications-based selection that establishes a shortlist of qualified teams. In Phase 2, teams develop a technical proposal, including pricing and approaches based on plans advanced by the submitting team to 60%.
Unlike CM/GC, the design/engineering team directly reports to the Design-Build Contractor rather than the Agency. The benefit is that owners execute a single, fixed-fee contract, reducing administrative overhead and streamlining the project timeline.
Progressive Design-Build (PBD)
Progressive Design-Build is a refined adaptation of the design-build delivery that operates on a two-step approach. The PDB team is selected based on their qualifications or the best value instead of on a fixed price. This selection process is followed by progressive advancement toward finalizing a design and contract price with the team. In PDB, the contractual agreement may encompass both phases of the work or be divided into two separate contracts, one for each phase. This approach allows for flexibility and adaptability in dealing with unforeseen complications or changes in the project.
Many PDB projects use early work packages (EWPs) to advance some aspects of the work, such as critical material procurements, utility relocations, and other long-lead scopes, before completing the 100% plans and authorization for final construction. This aspect of PDB is particularly appealing when time constraints are significant and construction schedules are tight.
Integrated Project Delivery (IPD)
The IPD model is a three-party, negotiated agreement that brings the owner, contractor, and engineer together under one contract to deliver a project. After qualification and an interview-based procurement process, the parties collaborate to advance design and set a project cost target during development. By joining critical parties under a single agreement, IPD allows for ongoing communication and collaboration, improving efficiency and project outcomes.
Public-Private Partnerships (P3)
P3 is an agreement between a public agency and a private sector partner for the design, construction, financing, and often the long-term operations and maintenance of one or more infrastructure assets. The private partner assumes additional project risks such as design, construction, finance, long-term operation, and traffic revenue, making P3s viable for delivering large-scale infrastructure projects.
Mission Critical: A Pioneer in Alternative Project Delivery
As discussed in our February 2023 article "Five Ways Mission Critical Gets You Ahead of the Competition," navigating the complex landscape of Alternative Project Delivery procurements can be challenging, even for experienced proposal teams.
All projects have unique challenges and constraints.
Each procurement has specific technical requirements.
Every reviewer has distinct areas of focus that capture their attention.
APD methods stress innovation, so any successful proposal must meet the stated criteria and demonstrate your ability to provide immediate value to the agency through clear, concise ideas, experiences, and innovations.
As the established leader in the Alternative Project Delivery space, Mission Critical has a proven track record in helping clients navigate this innovative landscape since 2012. Our scope includes strategic pursuit management, technical and narrative writing and content development, and advanced 2D and 3D technical illustration.
In November 2023, Mission Critical is launching Mission Critical: Peak Preparation™, an optimized interview preparation approach combining individual training with in-person, group interview coaching.
Summing Up
Alternative Project Delivery methods offer a value-driven framework encouraging collaboration, risk mitigation, and innovative thinking. As the construction industry grapples with increasingly complex project requirements and changing market dynamics, APD methods present valuable solutions to overcome these challenges.
Interested in Learning More?
The US Department of Transportation's Federal Highway Administration (FHWA) has extensive resources located on its Alternative Project Delivery webpage.
APD procurement methods vary by state. To learn more, a wealth of resources can be found on various Departments of Transportation websites. A sample includes DOTs in California, Colorado, Illinois, Texas, Arkansas, Florida, and Connecticut.
