Not To Repeat Myself, But...

Performance-Based Design-Build
Originally Published May 2007: "Design-Build DATELINE"
Written: December 2006

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Of the two prominent design-build delivery techniques (prescriptive-based vs. performance-based), prescriptive-based design-build dominates our industry. I make this statement based on my own experience as an owner’s representative and design-build consultant, corroborated through countless conversations with other leaders of the design-build community. The purpose of this article is to discuss and illuminate the latter, performance-based design-build. By comparing the two, I would like to make clear many of the challenges and advantages of performance-based design-build procurement.

I believe that just about everybody is familiar with prescriptive-based design-build procurement. This approach includes most or part of the design solution within the procurement or RFP (Request for Proposal) documents. Usually referred to as “bridging,” prescriptive-based design-build begins with the basis of the solution being determined by the owner and conveyed to the design-builder through drawings and specifications contained in the RFP. Its foundation, the prescription, is a familiar collection of elevations, floor plans, sections, materials selections, specifications, and product cut-sheets. Prescribing the solution is what owners, architects, and engineers have done for as long as we can remember. The disadvantage of this approach is it splits project accountability into two pieces. It may be less severe than design-bid-build, but nonetheless, the solution and accountability for project out-come is split. Irrespective of how perfect the owner’s prescriptive solution might be, the design-builder cannot be held accountable for its basis. The design-builder cannot be held accountable for the solution’s “free market price” or “schedule impact.” The design-builder cannot manipulate the schedule and price (via re-designs) to align with the owner’s functional needs because fulfillment of the prescription forbids it.

Why Performance-Based Design Build Works

A performance-based design-build RFP, in its purest form, focuses only on the problem, not the solution. If by some means the owner can focus on the pure needs of the project, the pure problem statement that must be solved, then adherence to the owner’s price and schedule can be achieved. Because the outcome of a project (both cost and schedule) is a direct function of a project’s design; manipulating design controls cost and schedule. If you want satisfaction of all three needs (design, cost, and schedule), the design-builder must initiate and control all elements of design and construction decision-making. This is a scary, if not impossible, idea for some owners to embrace. “Are you crazy? I’ll end up with a window air-conditioner in my office.” This is but one response I have heard on how an owner’s project expectations will surely not be met, and many owners believe that allowing the design-builder to control all measure of the solution will only end in disaster.

Let us presume that just about every RFP is made up of the same three primary sets of expectations: procedural expectations, programmatic expectations, and performance expectations. Component 1 is Procedures: the contractual roles, responsibilities, and obligation of the two parties (owner and design-builder). This section is not about “bricks and sticks,” it mostly the “legal stuff,” budget, completion date, contract definitions, and so on. The second Component is Program: the metrics, capacities, equipment, and other information that tells the design-builder how much to design and build. Third is Performance: the level of quality for all systems and assemblies that can be measured in terms of function, life-cycle cost, service lifespan, durability, serviceability, and so on. (This is known as the "3PQ RFP" strategy...see more about this advanced process)

The difference between prescriptive-based and performance-based design-build is not whether these three sets of expectations exist, they do. The difference is by whom are they defined and solved. Performance-based begins with the same set of expectations as prescriptive-based, but more fully defined and separately documented without passing into the solution (bridging). Performance focuses on what something must do, not be. By focusing on what something must do (problem) then all the possibilities of what it must be (solution) are available to the design-builder (problem solver), thereby allowing innovation that saves cost and time.

The owner is the only true source of what these three sets of expectations are. While using design-bid-build the owner focused on the same three sets of expectations: procedures, program, and performance. In design-bid-build, owners worked through their expectations by solving them, and presenting the solution in the form of plans and specs. If the owner stops just short of initiating the solution and instead, documents all three sets of expectations, you have a performance-based RFP. Herein lies the challenge for our industry, how do we stop ourselves.

Achieving Performance-Based Design-Build

First, the owner and design-builder must be open to changing the way they control and are accountable for the project’s outcome, and both must believe that these controls and accountabilities will result in their success. They must understand how performance-based RFPs allocate control and accountability between both parties much differently than prescriptive-based design-build or traditional design-bid-build. For the owner, when the RFP states what something must do and provides a “measure” to establish its satisfaction, all control of what it is resides with the design-builder. For the design-builder, when the RFP states what something must do and is provided a “measure” to establish its satisfaction, be accountable for meeting the measure obligated by the RFP.

Second, know what a true performance-based program and specifications are. If the performance expectation does not have an objective and clear measurement, then it is not truly a performance expectation. This measurement must be definitive and based objectively so that irrespective of who conducts the measurement, the results will be the same. One simple example is lighting whose expectation is stated in foot-candles and whose measurement is recorded with a light meter.

Third, we need a consistent format to convey the three sets of expectations. Just as the format for the “solution” (plans and specs) has been made a convention, so must the documents of the “problem” (RFP) be made a convention. In conveying this problem statement, the owner must discover the tools of the Performance-Based RFP trade. The Project Program that is hidden within the traditional singular solution (plans) must be extracted. The level of Project Performance contained in “Bridging” documents must be converted to measurable performance criteria. The restrictive and misaligned contractual language required by the Project Procedures must be rewritten to allow new control mechanisms for both the owner and design-builder.

Fourth, the owner must select a design-builder; a unique entity that combines skillful design-management and construction-management. The characteristics of this entity can and has filled entire books, so I will presume we all know what a design-builder is, though selecting one is a skill in itself.

Owners Using Performance-Based Design-Build

For public sector owners, using the design-build delivery method has become common. From my observations, the speed of delivery from concept to occupancy, and adherence to budget, appear to be the driving factors in choosing design-build. Yet speed of delivery, particularly in the concept or RFP development phase of a project, can be improved. The use of “bridging” documents to narrow the solution may appear to be a time-saver. However, for most “bridged” design-build projects, design seems to happen twice. Preliminary design by the owner contained in the RFP, and rediscovery by the design-builder following selection and award of the contract. I should state that there is nothing evil about “bridging” in and of itself, but the time consumed by the owner in developing the concept of the solution can be eliminated through performance-based design-build.

6 years later...

...the tendency by owners seems to continue to be "Bridging" in some form. Yet we probably all know examples of how Performance-Based Acquisition Strategies has out performed Bridging. Want a step-by-step tutorial...click.