Is the Design/Build method of mechanical system installation still preferred among contractors? The answer is Yes, although some have found that they must follow alternative methods, such as Design/Bid or Plan and Spec.
Our recent survey of mechanical contractors finds that Design/Build is generally alive and well. And, although there has been some decline in the number of Design/Build projects performed by contractors, a solid majority of those contractors have been able to keep Design/Build dominant in their regions.
The Design/Build method of mechanical systems design and installation has long been viewed as the method that provides the most value to the customer. With one contractor in command of both design and construction, change orders and other delays are greatly reduced, if not eliminated.
Of the 126 contractors who responded to our email survey, new construction accounts for 31% of HVAC revenue; retrofit/renovation makes up 40% of the business, and 34% engage in mechanical HVAC service. These companies employ an average of 23 people. (Figure 1)
Almost 41% of contractors surveyed use the Design/Build delivery method most often, followed by Plan and Spec (34.5%) and Design/Bid (24.8%).
The “preferred” delivery method (Figure 3), by a significant margin, is Design/Build (63.9%) followed by Plan and Spec at 24.4%, and Design/Bid at 11.8%.
Almost 70% of contractors say they have not seen a decline in their Design/Build projects based on customer perception of higher cost, while 30% have seen this happen (Figure 4).
As a testament to their ability to explain the value of Design/Build, 63% of contractors said they are often successful in convincing customers that Design/Build is the better route to project completion (Figure 5). Thirty-seven percent said they’re often not successful in turning customer opinions toward Design/Build.
Moving forward and looking to a better economy, 61.3% of respondents said they believe Design/Build will regain its prominence as the overall best value for customers, while 38.7% said they don’t believe that will happen (Figure 6).
Comments on why contractors prefer Design/Build, Design/Bid or Plan and Spec
“Design/Build fits the customer needs better and eliminates potential shortfalls. Design/Build makes us the prime contractor.” —Jim Steiner, operations manager, CES/Way Ltd., Houston, TX.
“Design/Build gives us our highest closing rate. It puts us in front of the customer, and gives us the opportunity to sell ourselves.” — Carl Wolf,
president, Service Unlimited, New Castle, DE.
“Profit margins are higher. You get paid for your expertise in design, not just for putting things together.” —Jim Bruno, owner, B&B Mechanical, Philadelphia, PA.
“Less competition, better margins with Design/Build” —Rod Bachman, vice president, Bachman’s Inc., Batavia, OH.
“There’s less competition in this market with Design/Build, and more interaction with the client.” — Joe Needham, CEO, Princeton Air Conditioning, Inc., Princeton, NJ.
“With Design/Build, I have the opportunity to show the client the value of my offering and the benefits, including greater comfort and lower operating costs.” —Sid Stockdale, P.E., ABM Building Services, Fort Worth, TX.
Matthew Grimard, sales engineer for American Combustion Industries, Brentwood, MD, said ACI mostly uses the Design/Bid method, though he prefers Design/Build, as it allows the company, as the HVAC contractor, to control the project, with less time lost in waiting for customer responses.
“Most times the customer wants the best work for the lowest price. We often submit a budget price and scope of work, only to find the customer now requires an engineer and three separate bids for a project. Very rarely do we see a customer willing to look at one contractor for everything,” Grimard said.
Another Design/Bid fan is Frank Donohue, owner, Complete Mechanical Systems, Inc., Monroe, NC.
“Most customers are existing building owners, and we offer complex solutions to their current needs. Because we can negotiate project cost and work to an agreeable solution that best fits the customers needs and budget concerns, this method has worked very well for our company,” Donohue said.
A contractor who was very emphatic in his support for Plan and Spec was Kevin Richison, construction and design manager for Lewis & Lambert, Fort Worth, TX.
“We do both Plan and Spec and Design/Build projects. But it seems that there’s still a misconception of or lack of knowledge of the Building Information Modeling (BIM) process in the industry,” Richison said. “This is leading many general contractors with young people fresh from college taking the reins as project engineers, unknowingly taking the Design/Build approach even to projects not designed as so.
“With a Plan and Spec project, you know what you’re getting into from the start, and can adjust pricing accordingly. On a Design/Build project, undereducated team members are dragging the projects out longer and creating BIM confusion more than they should. There’s a lack of real-world, knowledgeable people making decisions on Design/Build projects. Good quality teamwork with all project members is the only way to make a Design/Build project work as it should.”