As the options for project delivery respond to market trends and needs increase, so do the tendencies of owners to potentially seek advice and representation throughout their procurement, design and construction processes. These tendencies have led to a growing belief that design-build projects need an owner’s advisor to offer guidance, when often an experienced design-build team and in-house owner staff can provide the same value at an overall lower cost.
The Role of the Owner’s Advisor
An owner’s advisor is a professional services firm that is engaged by an owner to assist in various services. Some organizations may refer to the role as owner’s consultant or owner’s engineer. These services can range from request for proposal (RFP) writing, to contract administration to design review.
Owners who are inexperienced in the design-build project delivery method may feel more comfortable engaging an owner’s advisor that could help guide them and provide essential procedural knowledge they think may be lacking. While it can provide a sense of comfort for the owner to know they have a knowledgeable team on their side within the owner’s advisor role, in some circumstances, the advantages may not always outweigh the disadvantages.
When deciding on a project delivery method, owners are attracted to the increased savings in time and cost. They also like the innovative thinking that can come from choosing design-build. In some cases, the benefits of design-build can be compromised if the owner’s advisor is not experienced in the intricacies of this delivery method. In addition, cost savings could be lost if the owner’s advisor fees aren’t factored into the overall project budget. The overall value and cost of an owner’s advisor must be considered when deciding if an owner’s advisor is right for your project.
Taking Your Design-Build Savings Into Consideration
Consider the appropriate fees for the owner’s advisor, as well as what their level of involvement will be. These fees are highly dependent upon the scope of work they will provide. For owner’s consultants who will fulfill a smaller role, such as RFP development, pay application review and periodic consulting, 1 percent of the construction cost or less might be appropriate.
The Design-Build Institute of America (DBIA) and Penn State University studies have shown the average project cost savings achieved when using the design-build delivery method across multiple industries are around 6 percent. Consider whether the benefits of an owner’s advisor align with the loss of cost savings you’ll experience.
Similarly, allowing an owner’s advisor to engage in extensive conceptual design efforts and potentially prescribe design elements can reduce the benefits you’ll gain by using design-build. A design-builder needs maximum flexibility in developing the designed solution to the problem, and an overly detailed concept design produced by a well-meaning owner’s advisor can limit the creative and beneficial ideas that a skilled design-builder might offer.
Keeping the owner’s advisor scope simple can minimize your cost and allow your design-builder the maximum opportunity to bring creative approaches and ideas to the project.
Analyzing the Need for an Owner’s Advisor
An owner can ask many questions to determine if it is possible to avoid the cost of adding an owner’s advisor to a project. After careful consideration, you may realize that the design-build team and in-house staff can provide all the know-how you need.
Some areas to consider include:
- Are you able to write procurement documents for your project?
- Can you define the project budget, schedule and quality?
- Do you have a team member to monitor construction?
- Is there someone on your team who can review design concepts, layout and equipment with the design-builder?
- Do you have someone you can count on to manage the project?
Many private and public organizations can find the skill sets for a design-build project needed within their own ranks, maximizing the budget, schedule and creative benefits of design-build. Next time you’re considering design-build, take the time to consider if you need an owner’s advisor, and you can be confident that you will have your bases covered for your next project while reaping the budget, schedule and innovation benefits of choosing the design-build delivery method.
Read our case study to see how one water quality reclamation facility owner used a design-build approach — using in-house staff — to streamline processes and procedures while keeping money in the bank.