Chapter 3 — Key Takeaways

One-page reference card. Self-contained: you should be able to re-ground yourself from this alone.

Key Takeaways

• Delivery method and contract type are one decision, and that decision is the price. You are not choosing a procurement process. You are choosing who absorbs the unknown — and whoever absorbs it charges for it.

• Three decisions hide inside one phrase. Delivery method = the structure of relationships (who contracts with whom, when the builder shows up). Contract type = the pricing mechanism (lump sum, cost-plus, GMP, unit price). Selection method = how you pick the firm (low bid, qualifications, best value). "We're doing a GMP" tells you only one of the three.

• Each method has a signature failure mode, and it is predictable.

• DBB — design errors become change orders.
• DB — the owner under-specified performance and got exactly what it asked for.
• CMAR — the GMP was set on drawings too incomplete to price.
• CMa / multiple prime — scope gaps between trade contracts land on the owner.

• IPD — the team wasn't mature, or the owner couldn't actually delegate.

• In design-bid-build, the owner owns design errors. The principle usually called the Spearin doctrine: an owner that furnishes plans and directs you to build to them impliedly warrants their adequacy. It is a default that contracts try to modify, enforceability varies by jurisdiction, and it never excuses you from reporting errors you should have caught.

• Design-build shifts that warranty but not cleanly. The owner still warrants what it furnished — criteria, bridging documents, geotechnical data. The design-builder usually owes a professional standard of care on design, not a warranty of fitness. Professional liability insurance follows that distinction, which is why a hard "fitness for purpose" clause can leave an owner holding an uninsured promise.

• The bid-day price and the final price are different numbers. On Northgate the modeled hard bid was $45,850,000 against a $47,500,000 GMP — $1,650,000 cheaper on paper. Modeled to completion, the DBB path costs Meridian about $48,640,250 versus roughly $47,755,000. Of the bid-day gap, only about $856,550 (the fee compression) is permanent savings; the rest is risk repriced or deferred.

• The schedule usually decides it, not the price. Design-bid-build would have pushed Northgate's substantial completion 223 calendar days later. Meridian's interim clinic lease runs $118,000/month — roughly $861,400 of extended rent, which dwarfs the construction-cost difference.

• Your leverage exists earliest and decays fastest, in every method. DBB: the pre-bid question and the first thirty days. DB: criteria review before signature. CMAR: preconstruction. After that you negotiate with money already spent.

Action Items — this week, on your job

1. Find out which delivery method your current project is on, and say why in one sentence. If you can't, ask your PM. You would be surprised how many field engineers cannot answer this.
2. Read your prime contract's change-order and RFI-response provisions. Under DBB they are your only leverage. Know the notice deadlines cold; they are jurisdictional and unforgiving.
3. If you are on a CM-at-risk job, get the GMP qualifications and assumptions list and read every line. That document decides two years of arguments. Most project engineers have never seen it.
4. Ask what the savings split is and whether contingency draws are reported monthly. If the answer is "I don't know," you have found a governance gap.
5. On any design-build pursuit, run a criteria audit before you price. Highlight every instance of adequate, suitable, industry standard, as required, and appropriate. Each one is an unpriced option somebody granted you or took from you.
6. Look up your own jurisdiction's rules on which delivery methods are authorized for public work, and note the date you looked. Keep the summary. It is a genuinely useful document that most working professionals cannot produce.

Common Mistakes — and the fix

Decision Framework

Run these in order. Stop at the first hard constraint.

1. Does procurement law leave me a choice? Public agency? Check the statute first — authorization for design-build and CM at risk varies by state, agency type, project size, and year. No point scoring a method you cannot use.

2. Is the design complete and confidently coordinated? → Yes, and the project is conventional, and you are not in a hurry: design-bid-build. Take the competitive price.

3. Can I state what I want in measurable numbers, with stable user requirements? → Yes, and I value speed and single-point accountability over day-to-day design control: design-build. → No — my users are still figuring out their process: do not choose design-build. You will pay for every discovery at a negotiated price.

4. Do I need a hard price before design is finished, on complex systems? → Yes: CM at risk. Set the GMP as late as the schedule allows, never below 60% documents.

5. Do I have real internal construction staff, want direct trade contracts, or does my statute mandate multiple primes? → Yes: CM as agent. Budget for the scope gaps and write one site-wide safety plan.

6. Am I a repeat owner with a mature team, staff for a big room, and legal freedom for a multi-party agreement? → All five: IPD. Missing any one: take the IPD techniques (target value design, co-location, pull planning, transparent cost models, early trade involvement) into a CM-at-risk contract.

7. Which risks am I accepting by this choice, and have I priced them?

The Master Table, Compressed

The one question to carry forward, on every project, before any other:

Who owns the unknown here — and what did they charge for it?

If you cannot answer it, you have found the thing that is going to hurt somebody.