The context for this discussion is a Fixed Price / Variable Solution competition process using a performance-based design-build RFP Convention that includes a Problem-Based Contract.
The question becomes, "What opinions do I need to see, and what are those opinions worth?"
Design worth considering is design worth paying for. A proposed design solution that informs the owner during the Evaluation & Selection stage of an acquisition process can be the difference between excellence and disappointment. So, getting "valuable" proposed strategies and/or solutions (an opinionated answer) that satisfy your "stated problem" becomes critical in performance-based design-build.
This is a 2--part question deserving a 2-part analysis. "What opinion do I need" is directly promotional to the unique attributes and characteristics of the project at-hand. What should be included (as far as a 'design opinion') in a response to a design-build RFP? That's like asking, "What should I do with my life?" or "What kind of person should I marry?" It depends...
The "response" to a RFP is meant to inform as to the selection of the Design-Build Team. If your purpose behind the submittal requirements of a Design-Build RFP is to "establish" the design, two things become apparent: 1- No one can "establish" the design without taking time to establish the design, and 2- establishing the design prior to award of the contract is called "Design-Bid-Build". I know...I know...Old habits die hard.
As I stated above, selection of the Design-Builder, in a proper performance-based design-build acquisition process, should be centered on the unique attributes and characteristics of a particular project, a particular 'set of challenges', a particular 'set of project risks'. I think the reason most owners request floor-plans, elevations, renderings, etc, is because "most owners request floor-plans, elevations, renderings, etc." Automatic inclusion with the proposal is an institutional bias.
Of course, the Design-Builder must understand their 'proposed solution or strategy' to the extent they must guarantee price and performance, which does require design to some measure. But that's an internal function of the Design-Build Team, not a subject for direction by the owner's RFP submittal requirements.
Of course, the Design-Builder must understand their 'proposed solution or strategy' to the extent they must guarantee price and performance, which does require design to some measure. But that's an internal function of the Design-Build Team, not a subject for direction by the owner's RFP submittal requirements.
Again, the question is "what do you need to see, review, and evaluate" in order to differentiate between 3 Short-Listed teams that have already been qualified and deemed the 'most appropriate' the market has to offer (you have no other "design-build team" options if you did the RFQ process correctly). Other than selecting one of the 3, you must design and build the project yourself, of defer the acquisition altogether.
What the "owner needs to see" is the product of "Risk Analysis". The deep understanding of unique project needs in the context of counter forces and odd conditions likely to impact a successful outcome. Seeing floor-plans, elevations, renderings, etc. is fun and all, but I don't think we need to promote a beauty contest in order to select a Design-Build Team. Besides, its expensive. Make it too expensive and the market-place shrinks, ultimately leaving only "Risk Takers" who, as they fall off the cliff, grab hold of your ankle.
Think about it this way. If your project has no significant "Risks" (and your Risk Analysis indicates such) and is "Routine" (I know, for some reason every project is the most important project in the world) then request RFP-Responses that are based on a 5 page letter stating "how they intend to satisfy the RFP in contrast to the other Teams?" No plans, no elevations, no renderings. The basis of contract award is how they demonstrate (not speculate) that their 'strategy' will be successful.
But if your Risk Analysis indicates a "high degree of likely failure "for specific Project Objectives, then focus the RFP-Response requirements only to those "High Risk" elements. Not everything is critical, or "the most important", or needs the Design-Builder to "prove" that it has been been solved within the proposal.
Focus on the Risk...that's what 'design-build' and integrated delivery is developed to do. I think most owners (and designers/builders for that matter) expect to see "designs"...its what we know...as Maya Angelou once said "We do what we know, and when we know better we do better, but we ALWAYS do what we know"
Focus on the Risk...that's what 'design-build' and integrated delivery is developed to do. I think most owners (and designers/builders for that matter) expect to see "designs"...its what we know...as Maya Angelou once said "We do what we know, and when we know better we do better, but we ALWAYS do what we know"
I'm not saying an owner never needs floor-plans, elevations, renderings, etc. to make a selection. Although I think its more rare than most think. Maybe its their first stab at Design-Build, maybe they have statutes of strict policies to follow, maybe their Risk Analysis indicates so. But, as I said before, well thought out floor-plans, elevations, renderings, etc., those with any real value anyway, are expensive to create. I believe owners can trust professionals (that have been properly vetted during the RFQ process) to keep their 'promise' embodied in their RFP-Response.
What's an RFP-Response Worth?
As to the amount of a stipend, again it depends. As stated above, the required level of effort to respond to the owner's RFP is key. For anybody to suggest that the appropriate stipend amount can be derived as a simple percentage of a project's value sacrifices methodology for expediency in the process; ultimately satisfying neither. A lack of method drives away the market by not establishing "confidence" in the owner's approach, and using a simple percentage lacks "thoughtfulness"and consideration of the unique, again undermining confidence in the owner and the owner's process.
We can bracket a range, somewhere between zero and 8% of construction value. That's somewhere between Free and Full Design. I sarcastically say this only to address the prior question; What does the owner absolutely need to see to differentiate between proposals? I've known owners who need little, and owners that need to see damn near "everything" (at least they believe they do).
Its worth keeping in mind that designers don't traditionally provide design for free. That is to say, designers have built their fee-structure based on a qualifications-based selection process (RE: Brooks Act). So for an owner to insist on receiving reliable fixed-price proposals without offering a stipend is problematic at least, and catastrophic at worst (it brings out the gamblers). By the way, I discuss the inherent value in design in another post.
Builders, on the other hand, have a tradition of putting together bids at no change in order to compete for work. This is exemplified by the Design-Bid-Build process. That is not to say that guaranteeing a Price based only on conceptual designs is not a challenge, and depending on the challenge may require a level of effort off-set for the builder.
The method I offer as an example: let's assume a risk analysis has been done and the only unique element of the building project is it's being placed on a site that was formerly "contaminated" and the result of "Super Fund" environmental clean-up. The site surface is now uniform, sound, in character with its original self, and contains no residue to a depth of 40'. The only constraining feature of the site is two "monitoring wells" that must remain in-tact, accessible, and undisturbed for the service-life of the project. Guess what the "Risk Analysis" shows as the most likely threat to Project Success.
Your task is to build yet another Fire Station; 8 beds, 3 bays, one Captain for administration. No training ground, no sub-station for police, just code compliant vanilla. What does the owner "need to see" in order to select from the 3 shortlisted design-build teams that prompts consideration of stipends. Other than 'schematic design' to inform a 'guaranteed price', I'd say nothing. So the quick math may be:
$5 million Budget (the average price of the last 10 similar Fire Stations adjusted for market forces)
X
8% design fee (the average fee in the market)
X
10% schematic design (average fee portion for full schematic design)
X
80% without profit (deduction of average target profit margin)
=
$32,000 X 2= $64,000 ($32k paid to 2 non-selected teams)
Comes out to 1.2% of Budget. Is that worth spending to establish a guaranteed price, consideration of 3 alternative and unique solution strategies, attraction of the 'top' design-build teams, and the establishment of equity in the market place. Can an owner get 3 proposals for less than 1.2%? Yes, an owner can (and does) get proposals for free all the time. But with no real guarantee of price and performance. This discussion reminds me of the compelling question: "What do you suppose is in a 99 cent hamburger?"
1.2% is around 1/3 of the probable 3-5% that many owners spend on (non-owner directed) Change-Orders...heck, maybe more depending on what one spends on the design and how one qualifies the design-bid-builder. I've known owners that spend more (per SF) on their carpet pad installation than on their design.
Now if the same exact hypothetical project had the Risk Attribute of being located within a residential community, with an active "Community Association", then one might want renderings (simple as they may be) in order to involve the Association. Maybe it's a very politically active Association, and the Mayor is up for re-election...get the picture. Now tell me what the "Right" proposal is worth?
The point is Stipends are a critical tool in Design-Build. DBIA and other such knowledgable "centers of thinkery" have it right; Stipends are fundamental to Design-Build Done Right. The appropriate amount for Stipends will remain in hot-debate until we as an industry develop a logical objective methodology...like this one.
We can bracket a range, somewhere between zero and 8% of construction value. That's somewhere between Free and Full Design. I sarcastically say this only to address the prior question; What does the owner absolutely need to see to differentiate between proposals? I've known owners who need little, and owners that need to see damn near "everything" (at least they believe they do).
Its worth keeping in mind that designers don't traditionally provide design for free. That is to say, designers have built their fee-structure based on a qualifications-based selection process (RE: Brooks Act). So for an owner to insist on receiving reliable fixed-price proposals without offering a stipend is problematic at least, and catastrophic at worst (it brings out the gamblers). By the way, I discuss the inherent value in design in another post.
Builders, on the other hand, have a tradition of putting together bids at no change in order to compete for work. This is exemplified by the Design-Bid-Build process. That is not to say that guaranteeing a Price based only on conceptual designs is not a challenge, and depending on the challenge may require a level of effort off-set for the builder.
The method I offer as an example: let's assume a risk analysis has been done and the only unique element of the building project is it's being placed on a site that was formerly "contaminated" and the result of "Super Fund" environmental clean-up. The site surface is now uniform, sound, in character with its original self, and contains no residue to a depth of 40'. The only constraining feature of the site is two "monitoring wells" that must remain in-tact, accessible, and undisturbed for the service-life of the project. Guess what the "Risk Analysis" shows as the most likely threat to Project Success.
Your task is to build yet another Fire Station; 8 beds, 3 bays, one Captain for administration. No training ground, no sub-station for police, just code compliant vanilla. What does the owner "need to see" in order to select from the 3 shortlisted design-build teams that prompts consideration of stipends. Other than 'schematic design' to inform a 'guaranteed price', I'd say nothing. So the quick math may be:
$5 million Budget (the average price of the last 10 similar Fire Stations adjusted for market forces)
X
8% design fee (the average fee in the market)
X
10% schematic design (average fee portion for full schematic design)
X
80% without profit (deduction of average target profit margin)
=
$32,000 X 2= $64,000 ($32k paid to 2 non-selected teams)
Comes out to 1.2% of Budget. Is that worth spending to establish a guaranteed price, consideration of 3 alternative and unique solution strategies, attraction of the 'top' design-build teams, and the establishment of equity in the market place. Can an owner get 3 proposals for less than 1.2%? Yes, an owner can (and does) get proposals for free all the time. But with no real guarantee of price and performance. This discussion reminds me of the compelling question: "What do you suppose is in a 99 cent hamburger?"
1.2% is around 1/3 of the probable 3-5% that many owners spend on (non-owner directed) Change-Orders...heck, maybe more depending on what one spends on the design and how one qualifies the design-bid-builder. I've known owners that spend more (per SF) on their carpet pad installation than on their design.
Now if the same exact hypothetical project had the Risk Attribute of being located within a residential community, with an active "Community Association", then one might want renderings (simple as they may be) in order to involve the Association. Maybe it's a very politically active Association, and the Mayor is up for re-election...get the picture. Now tell me what the "Right" proposal is worth?
The point is Stipends are a critical tool in Design-Build. DBIA and other such knowledgable "centers of thinkery" have it right; Stipends are fundamental to Design-Build Done Right. The appropriate amount for Stipends will remain in hot-debate until we as an industry develop a logical objective methodology...like this one.
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