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RE: Design Build / GC-CM

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There are reputable companies, and then there are those who are not. IMHO,
it would not be proper to make a blanket statement about any group,
including design/construction firm. I remember when engineers were accused
by apartment owners of creating the earthquake scare in order to create a
market.
I spent a great deal of my time engineering URM Retrofits during the frenzy
of the 80's and early '90's in Southern Califonia. As the work neared
completion, competition became stiff for the work that was left.  Almost
every contractor who specialized in retrofit worked with a particular
engineer. The marketing stradegy was that the client would hire the engineer
who was refered by the construction company. Complete design/construct firms
would sell the total package, but allow the owner to obtain competitive bids
in order assure the client that he is not paying more for the service.
The design plans would be prepared and sent out to for preliminary bids. The
design/construct firm was almost always the low bidder - claiming that the
design included anchor installations which they were familiar with and could
do cheaper than anyone else. The owner received bids from four or six
contractors - and sure enough, the design/construct firm was the low bidder.
The rules of the game were thus:
1. The design/construct engineer overdesigned the retrofit and had two sets
of plans - one for bid, one for submital.
2. The construction portion of the business was not only able to be
competitive, but created excessive margins of profit.
3. The design/construct firm bid on what the submittal drawings would
include and of course won the contract.
4. Once they signed the contract, the actual set would be submitted for plan
check and permit issuance and the owner was never the wiser.

The owner was unaware of the switch and figured he made a good decision. If
times were really tough, the design/construct firm gave the engineering away
(only to recoup it in the inflated construction cost). Sadly, these
companies did very well in the URM business while more ethical companies
learned to diversify their practice in order to compensate for lost URM
contracts at the height of these games.
I, worked for a design construct firm - and, No, we did not play these
games - but that's why, IMO, this company is still in business and doing
well in the tenant improvement industry. However, we competed with the
unethical businesses. Inasmuch as we did a lot of this work, we were atuned
to an overdesigned set of plans and knew how to compete. We combated this
practice by reviewing the plans we received, determined to what degree the
work was excessive and bid the project as a redesign. We passed the savings
back to the owner which generally cost him less than his original
design/construct firm. If we were lucky enough to get the work, we made
money and had a satisfied client.
We tried to be as diplomatic as possible in this type of situation, but knew
that we could have won the contract by bidding on what we received. The
owners were generally told - after they placed their faith in our firm.

I don't think this is typical of design/construction firms in most, but they
do exist and give this end of the business a bad reputation.

Dennis S. Wish PE


-----Original Message-----
From: Bill Sherman [mailto:SHERMANWC(--nospam--at)cdm.com]
Sent: Thursday, October 08, 1998 11:25 AM
To: seaint(--nospam--at)seaint.org
Subject: Re: Design Build / GC-CM


I've worked on a couple of design-build projects as well as several
proposals
for design-build projects.  My main objection to such projects is that "they
are a rip-off to the engineer".  It is difficult to accurately bid a
construction project when the design has not yet been done.  Thus
significant
resources have to be expended during the bid process to develop at least a
preliminary design, so that cost estimates can be prepared.  Sometimes firms
are provided a fixed fee for submitting a bid, but such fees rarely cover
the
actual cost of developing the design-build estimate.  Thus, such projects
substantially increase the cost of getting work.