As the only organization that defines, teaches and promotes best practices in design-build, an important part of DBIA’s mission is to research how and where design-build is being utilized in the United States today. RSMeans, a leading supplier of construction cost information, conducted a study to analyze the growing use of design-build and update our ongoing research with the latest data findings. The newly released study confirms that the use of design-build on vertical projects has remained steady since its growth spurt at the end of the last decade, and also that the West Coast is leading with the most dollars being spent on design-build projects.
Shortly before the economic downturn a little over five years ago, the use of design-build spiked from 29 percent of the non-residential market in 2005 to 36 percent in 2008. Throughout the recession period, design-build use continued to grow, and now with the economy stable and slowly recovering, the use of design-build has held steady at around 40 percent for the last three years.
“The growing use of design-build is not surprising,” says Lisa Washington, CEO/executive director of DBIA. “Throughout the last five years, and even through the recession, we’ve seen a large increase in demand for information and training on design-build best practices. Owners from all sectors have been turning to design-build delivery because they recognize the inherent value it brings to any project in any sector of any size.”
Design-build’s growth has been particularly strong on large projects. For the first time since 2005, more than half of projects above $10 million are being completed through design-build project delivery. In contrast, the research findings show the use of design-build has slipped back to 2005 levels for smaller, less complicated projects, likely due to tightened budgets discouraging states and localities from reaching outside their comfort zone (i.e. traditional design-bid-build).
“The RSMeans segmentation analysis becomes more powerful each year and now includes nine complete years of actual history, statistically supporting observation of trends at the state and industry sector segment levels,” says Tim Duggan, director of custom solutions, RS Means. “In many sectors, findings show an increasing trend of consistent and significant stability in large dollar projects over the last three years.”
For the first time, RSMeans analyzed projects state by state and found that the West Coast is where design-build is the most prevalent. In fact, 70 percent of construction dollars being spent in Oregon are on design-build projects. California is the second highest at 59 percent and Washington the third highest state at 56 percent. When looking at specific sectors, the military uses design-build on 81 percent of projects. However, even when military projects are taken out of the equation, Oregon is still the top state due to multifamily residential and industrial sectors’ preference for design-build. Those two industries also lift Michigan to the second place spot in the list of states doing the most non-military design-build (when military construction is included, Michigan falls to 18th place).
The research team drew upon RSMeans’ proprietary database of historical and planning construction projects data as the basis for the study. In addition, the study incorporated other publicly and privately available data sources. Detailed data on nearly 1,000,000 construction projects, 300,000 plans and specifications, historical and current material, and labor construction costs was integrated with historical and projected demographic data for valid comparisons. The research team estimates that 95 percent of public projects and 75 percent of private projects were captured in this analysis.
In short, the research confirms that across sectors and across the country, design-build is here to stay.