Value Beyond Cost Savings - Green Building Finance Consortium

Value Beyond Cost Savings: How to Underwrite Sustainable Propertiespricing and costs, owners have choices, and bidders get to bid based on completeconstruction drawings.The design-bid-build process can also be problematic due to the difficulty—costs, delaysand disputes—arising out of changes that arise during the construction process.Development of a low cost rather than high value mentality can be an issue. Mostimportantly for sustainable building, the contractor is typically brought in post design,limiting the quality of input and communications.Design-Build“Design-build focuses on combining the design, permit, and construction schedules in orderto streamline the traditional design-bid-build environment. This does not always shorten thetime it takes to complete the individual tasks of creating construction documents (workingdrawings and specifications), acquiring building and other permits, or actually constructingthe building, but can result in a more collaborative environment that can reduce changeorders, enable a more value-oriented decision process, and improve communications.By integrating design and construction in the same entity, input by contractors is providedearly in the project, communication between key parties to the success of the project isenhanced, and responsibility for successful completion of the project is shared by thedesigner-builder. These benefits can be offset by a short-cut design process and reducedcompetition for the construction contract.Intensive at Risk Construction ManagementThis delivery method combines the traditional owner’s representative construction managerduring the pre-construction phase and an “At Risk” construction manager during theconstruction that agrees to deliver the project at a “Guaranteed Maximum Price”.Integrated Project DeliveryIntegrated Project Delivery is a new method where the owner, architect, and contractorenter into a multi-party contract up-front with incentives and penalties. This type of processlinks the three key service providers up front, forcing a more integrated approach todesigning and delivering the project.37