Commercial Contractor Project Delivery Methods
Project delivery methods define the contractual and operational structure governing how a commercial construction project moves from concept to completion. The method chosen determines who holds design responsibility, how risk is allocated, and when costs are established. Owners, developers, and public agencies select among these frameworks based on project complexity, budget certainty requirements, and schedule constraints. Understanding the distinctions between delivery models is foundational to commercial contractor selection criteria and shapes every downstream agreement.
Definition and scope
A project delivery method is the legal and organizational framework that establishes the relationships among the owner, designer, and builder on a construction project. The Construction Management Association of America (CMAA) identifies four primary delivery methods used in U.S. commercial construction: Design-Bid-Build (DBB), Design-Build (DB), Construction Management at Risk (CMAR), and Integrated Project Delivery (IPD). Each method differs in the sequence of design and construction activities, the number of prime contracts the owner holds, and the point at which a guaranteed maximum price or lump sum is established.
The choice of delivery method is not purely a procurement preference — it directly affects commercial contractor contract types, bonding exposure, and the structure of pre-construction services. Public projects in 49 U.S. states are subject to state-level procurement statutes that may restrict or mandate specific delivery methods, particularly for projects funded with public dollars (American Institute of Architects, Primer on Project Delivery, 2nd ed.).
How it works
Each delivery method follows a distinct sequence of phases and contract structures:
Design-Bid-Build (DBB)
- Design phase — The owner contracts separately with an architect or engineer to produce 100% construction documents.
- Bid phase — Completed documents are released; general contractors submit competitive sealed bids.
- Build phase — The lowest responsive, responsible bidder executes a separate construction contract with the owner.
DBB is the traditional model. The owner holds two sequential prime contracts and bears the risk of design errors that produce cost overruns during construction.
Design-Build (DB)
A single entity — the design-builder — holds responsibility for both design and construction under one contract with the owner. This consolidation reduces the owner's coordination burden and transfers design-construction integration risk to the contractor. According to the Design-Build Institute of America (DBIA), DB delivery reduces project schedules by an average of 33.5% compared to DBB on projects of equivalent scope (DBIA, Doing Design-Build Right, 2018). Design-build commercial contractor services are structured around this single-point responsibility model.
Construction Management at Risk (CMAR)
The owner hires a construction manager (CM) early in the design process as a fee-based adviser. At a defined design milestone — typically 60–90% construction documents — the CM converts to a contractor role and provides a Guaranteed Maximum Price (GMP). The CM then holds contracts with all trade subcontractors. This model allows owner involvement in subcontractor management and procurement while still transferring cost risk through the GMP.
Integrated Project Delivery (IPD)
IPD uses a multi-party agreement that binds the owner, architect, and contractor into a single contract with shared risk and reward pools. The American Institute of Architects defines IPD as a method that "integrates people, systems, business structures, and practices into a process that collaboratively harnesses the talents and insights of all participants" (AIA, Integrated Project Delivery: A Guide, 2007). IPD is most common on complex healthcare and laboratory projects where coordination failures carry disproportionate cost consequences.
Common scenarios
Public infrastructure and government buildings — DBB dominates public-sector work because competitive sealed bidding satisfies transparency and anti-corruption requirements embedded in state procurement codes. Municipal and government contractor services are structured almost exclusively around DBB or CMAR frameworks.
Healthcare facility construction — Healthcare facility contractors frequently operate under CMAR or IPD because the complexity of mechanical, electrical, and infection-control systems demands early contractor input during design. A 2020 FMI Corporation study found that 62% of healthcare owners reported using CMAR on major capital projects.
Retail and tenant improvement — Fast-track schedules in retail commercial contractor services and tenant improvement work favor Design-Build because the owner can begin permitting and procurement before design is finalized.
Industrial and warehouse construction — Industrial contractor services and warehouse and distribution projects often use DB because building systems are standardized and design risk is low, allowing a single entity to price and deliver efficiently.
Decision boundaries
Selecting a delivery method requires evaluating four primary variables:
| Variable | Favors DBB | Favors DB | Favors CMAR | Favors IPD |
|---|---|---|---|---|
| Design completeness required before pricing | High | Low | Medium | Low |
| Owner's tolerance for single-point risk | Low | High | Medium | Shared |
| Schedule compression need | Low | High | Medium | Medium |
| Project complexity and coordination intensity | Low–Medium | Low–Medium | High | Very High |
DBB vs. Design-Build — the core contrast: DBB maximizes price competition and owner control over design but extends overall project duration because construction cannot begin until design is complete. Design-Build compresses schedule through design-construction overlap but limits the owner's ability to modify scope after contract execution without significant change-order costs.
Budget certainty is established at different points across methods. In DBB, a firm price exists only after bids are received. In DB, the contract price is negotiated before design is complete. In CMAR, the GMP is established mid-design, with savings below the GMP typically shared between owner and CM per a split defined in the contract. Owners evaluating commercial contractor cost estimating practices should understand that each method produces estimates at different levels of design completeness, affecting accuracy and contingency requirements.
Regulatory context matters at the state level. The Associated General Contractors of America (AGC) tracks enabling legislation for CMAR and DB on public projects by state; as of its most recent legislative survey, 48 states had enacted some form of alternative delivery authorization (AGC, Alternative Project Delivery Legislative Survey).
References
- American Institute of Architects — Primer on Project Delivery, 2nd Edition
- American Institute of Architects — Integrated Project Delivery: A Guide, 2007
- Design-Build Institute of America (DBIA) — Research and Resources
- Construction Management Association of America (CMAA) — Industry Resources
- Associated General Contractors of America (AGC) — Alternative Project Delivery
- Federal Acquisition Regulation (FAR) — Subpart 36.3, Two-Phase Design-Build
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