Design-Build Best Practices: A Conversation with Michael Loulakis and Diana Hoag

Winter 2013

As design-build expands across all sectors of the construction industry, DBIA recognizes the need to define more clearly the concept of Design-Build Done Right and ensure that all participants in the design-build process understand the key elements that significantly enhance the chances of superior project outcomes.

This year, Michael Loulakis, Esq., DBIA, president and CEO of Capital Project Strategies, LLC, and a member of DBIA’s Design-Build Certification Board, and Diana Hoag, DBIA, senior consultant of Xcelsi Group and a member of DBIA’s board of directors, are leading DBIA’s effort to update our best practices document. We recently sat down with them to discuss the creation of this document and see what kind of insights they had to share.

The practices identified in the DBIA Design-Build Best Practices document have two basic characteristics. First, they are written in a way that is intended to be universal in applicability, spanning any type of design-build project — whether public or private, vertical or horizontal, large or small. Second, they are important enough to directly affect project performance.

DBIA has stated these practices with the intent that their application be as broad as possible. For example, one could reasonably conclude that in a two-phase procurement process, the best practice is not simply identifying that the owner use a short list, but that the short list should be limited to three bidding firms. However, others could reasonably conclude that short-listing four to five firms might be the best practice for certain types of projects.

It should be noted that the term “best practices” itself implies an evolving process. As new technology emerges and more design-build projects provide more lessons, DBIA Design-Build Best Practices must be updated to reflect that. As such, DBIA fully expects that the concepts expressed here will be refined and modified over time. In addition, recognizing the real-world differences among the design-build market sectors (e.g., water/wastewater, transportation, federal projects), DBIA will develop and implement specific tools to apply these higher-level, universal best practices most effectively within our community of design-build market sectors.

What prompted the creation of this document? Why now?

Diana Hoag: This initiative is largely the result of the 2013–2015 strategic planning undertaken by DBIA leadership last year. DBIA renewed its commitment to promoting and promulgating Design-Build Done Right. DBIA Design-Build Best Practices are the most direct means of communicating what “done right” means to the industry and owners. The creation of this document is a natural next step to ensure we deliver the message completely and concisely.

What prompted you to put out a call to the industry for feedback? How has the response been so far? How will it shape the next version of the document?

Michael Loulakis: We conducted broad outreach within the DBIA community to develop the first draft of the best practices document. We then believed it was very important to reach out to other industry associations to hear their views. The response has been excellent both in terms of the number of associations providing responses as well as the thoroughness and thoughtfulness of the responses. While we are still in the evaluation process, it is clear that the industry has largely agreed with the views expressed in DBIA’s document. However, they have also provided some constructive ideas on how we can make the final product even more valuable.

What challenges do you foresee in the adoption, acceptance and implementation of the new best practices?

ML: In my view, the biggest challenge will be encouraging industry to go beyond complying with the literal words of the practice and embrace the spirit behind those words. Many of the practices are written broadly to give the parties latitude on how to implement them.

In what ways do you believe this document will serve to advance and educate our industry?

ML: Getting these practices written into one comprehensive document is a major step forward, as it allows the industry to go to a single source for how to do Design-Build Done Right.

What are your personal goals with regard to this document? What do you hope to see the document achieve?

DH: This document should serve to unify our industry by succinctly answering the question, “What is Design-Build Done Right?” I believe the document’s role is to serve as a starting point to develop targeted tools and resources to benefit all sectors of the design-build community at the practical level. It’s my belief that those tools and resources, which will reflect the best practices tailored for the water/wastewater, transportation or federal sectors, are the real payoff from this effort.

What do you think design-build best practices will look like in five years?

ML: This is hard to answer. I do think that we will see greater integration of lean construction principles into the practices than we currently have. I am hopeful that we will see more project execution practices (e.g., post-award) generated as the industry becomes more willing to share its success stories.

What does this document symbolize? How far we have come? How far do we have to go?

DH: To piggyback on Mike’s previous comment, it’s apparent that we have a fairly good understanding of pre-award practices that owners need to embrace to realize the benefits of design-build. We have more work to do to identify and agree on pre-award best practices for design-builders and the best practices that make a difference after contract award. Clearly, there are best practices that successful design-builders consistently use, but we haven’t captured them yet. That’s on our to-do list for future updates to the document.

What area of this document do you believe is most critical for industry adoption?

DH: There really isn’t one area that’s more important than others. By definition, each one individually is fundamental to project success. It’s also the case that collectively they reflect the reality that design-build is different from other project delivery methods, and owners and practitioners need to approach design-build with that in mind.

Diana Hoag is a Senior Consultant with the Xcelsi group. Her expertise comprises acquisition planning and execution for complex systems and design-build construction projects, including development of effective performance-based solicitations, source-selection approaches and contract incentives. She has more than 31 years experience and is an expert in acquisition planning and management.

Michael Loulakis is President and CEO of Capital Project Strategies, LLC. He has more than 30 years of experience in representing parties engaged in all aspects of the construction industry. Before founding capital project strategies, Loulakis served as chairman and president of the national construction law firm of Wickwire Gavin, P.C., where he represented clients in matters involving procurement, risk management, contract drafting and dispute resolution. He is well known for his extensive background in design-build and other alternative project delivery systems, and has been one of the industry’s most active writers and speakers on the subjects.