Alternative delivery is increasingly being adopted in the public and private sectors. Associated Engineering has participated on projects employing various modes of alternative delivery. Our knowledge of alternative delivery comes from our experience in a number of roles, including owner’s engineer, design engineer and environmental support for the contractor, technical advisor to lenders, and engineering for operations, maintenance, and rehabilitation (OMR) contracts.
Alternative delivery is evolving rapidly. As infrastructure needs increase, owners are seeking alternative project delivery models that will result in project efficiency and incorporate innovation to ultimately extract higher value for stakeholders.
Traditional Project Delivery
Most projects are executed through a linear project delivery model that consists of Design, Bid, and Build. In this model, an owner first procures the services of a team to develop a design, which is then advertised for bid. After the bid evaluation process, the owner selects a contractor to construct the asset. Upon completion, the asset is commissioned and turned over to the owner. Design-Bid-Build projects are usually funded by the owner.
What is Alternative Delivery and why has it become a viable method to develop projects?
Several alternative delivery models exist and continue to evolve. The most common forms of alternative delivery are:
- Design-Build: design and construction requirements are merged into one contract between the owner and a contractor (or consortium of contractors) who is solely responsible for the design and construction of a project and accountable to the owner. The contractor arranges for engineering and other professional service providers to design the project in collaboration with the contractor. Advantages of Design-Build are the owner has a single point of contact and accountability. The project can be fast-tracked and construction can be phased as the design is being developed, enabling a shorter project schedule.
- Public-Private Partnerships add a financing mechanism, often consisting of a financial services or investment partner, and operational responsibilities to the Design-Build model. The Public-Private Partnership entity, consisting of a consortium of contractors and financial partner(s), assumes total financial, technical, and operational risk for the project over a concession period - often 30 years. Over this time, the Public-Private Partnership entity is responsible for operating and maintaining the project (asset) and the owner pays for the asset through regular installments to the Public-Private Partnership entity over the duration of the concession.
- Integrated Project Delivery is an alliance of designers, contractors, and the owner with the responsibility to define, design, and construct a project under a single, multi-party agreement that incorporates a waiver of liability between all members of the alliance. The alliance performs under a shared risk/reward model that promotes collaboration between its members to meet a guaranteed maximum price for the project.
Owners will have different and often overlapping drivers for adopting alternative delivery as a mechanism for completing projects. Some common drivers are gaining access to financing mechanisms, reducing or sharing risk, accessing expertise, guaranteeing project cost, and shortening the gestation cycle for completing a project.
Throughout Associated Engineering’s 70 year history, we have participated in alternative delivery projects, and we continue to expand our portfolio of alternative delivery projects. We can help owners identify and assess potential alternative delivery models to help realize the project outcomes they desire.
For more information on the mode of delivery that might work best for your projects, contact Helder Afonso.
About the Author:
Helder Afonso is the Vice President & General Manager of our Northern Alberta operation. In this role, Helder is responsible for managing the operation, including business development, project delivery, and staff development. He has more than 30 years of experience in design, construction, and project management.