This week’s Q&A Spotlight is more about the business of building, and less about the science of building. The case involves a homeowner who is struggling to find a balance between his ethical responsibilities and a desire to save a few bucks.
Matt Mesa has been working with a design-build firm on plans for a 1600-square-foot house in Hood River, Oregon. The two sides of the business are separate, he writes in a Q&A post at GreenBuildingAdvisor, and so far his dealings have been with the folks on the design side.
“We hired the design part of things and have verbally told the build side of things that we want them to build our house,” he says. “We’ve been with these guys for 2 to 3 months now and, admittedly, have built some kind of rapport with them.”
The firm has a reputation for good work, but it’s expensive. “We’re looking at $400K or about $250 a square foot,” he says. “It’s not an extravagant house and it’s a pretty simple build.”
Now a friend is strongly suggesting that Mesa send the plans out to a couple of other contractors and ask for competitive bids.
“So, given that I’ve traveled down the road a bit with this firm, am I doing the right thing by putting our plans out for bid?” he asks. “We haven’t signed a contract yet, but we’re getting close to doing so. There’s something that ethically bothers me about this, but maybe this is quite common. I feel like I’m pulling the rug out from under them, sort of.”
Should he get some additional bids? Or push ahead with the firm he’s already got?
There’s an advantage to using a single firm
Getting another firm involved may lead to “lost-in-translation” syndrome, writes Richard McGrath. “If something does not work, the designers will say it was not done to their spec. You will have a whole bunch of finger-pointing and resolving anything will be a pain in the neck,” McGrath says.
Using a single company will prevent that from happening, he continues. “They must deliver what they promised since they designed it or their integrity will suffer.”
And then there’s the bad taste in the mouth the whole business would leave, he adds. “I would certainly be offended if you did it to me and would offer no future help unless contractually obliged to do so.”
Besides, competitive bidding doesn’t usually work
There’s another reason not to seek bids from other builders, writes Dan Kolbert: “Competitive bidding doesn’t often get you what you think it will.” Kolbert steers Mesa to an article he wrote for The Journal of Light Construction a few years ago. In it, Kolbert recalls an unsatisfying bidding experience he had.
“And we keep doing it this way because – well, we’ve always done it this way,” he wrote in JLC. “I might be willing to continue if I thought the process brought value to the client, but I’m increasingly convinced that competitive bidding from completed plans doesn’t serve anyone’s interests.”
Architects hired by the client usually underestimate the cost of the project, so when the plans are sent out for bids the client discovers he’s paid for plans he can’t afford to build.
Moreover, Kolbert wrote, bids may not provide useful comparisons because not all of the bidders will follow the architect’s directives, and others may miss mistakes or inconsistencies in the plans. Bids that are higher on paper may actually turn out to be the best deal for the client.
Kolbert lists several alternatives to competitive bidding in the article, but ultimately, he adds, “there may never be a way for contractors to avoid competing on price” because most homeowners are convinced they’ll get the short end of the stick unless they seek a number of bids.
Communication is the key
To Jim Blodgett, it would be perfectly reasonable for Mesa to approach his contact at the company and say that while he’s very happy with the design work the company has done so far, he also feels an obligation to check with a couple of other builders. Mesa should ask how the company would feel about this, and whether it would affect their relationship if Mesa decided to stick with them for construction.
“Give them the chance to level with you,” Blodgett writes. “To voice their concerns, share their perspective. It probably isn’t the first time they have dealt with this issue – you shouldn’t feel pressured because it’s yours.”
Get some bids despite the delays that may cause
Scott McCullough writes that while the design/build group “will feel like they got the rug pulled out from underneath them,” he’d go ahead with the bidding process even though it probably will delay the start of the job.
“If you decide to put it out to bid it will take several weeks for the bidders to assemble their prices, making it difficult to begin construction within the month you mentioned,” McCullough says. “So a bidding process would likely delay your construction timeline. A competitive bidding process is something that involves a fair amount of information management in order to end up with bids that are understandable and comparable.
“Be prepared to ask detailed questions about each bid in order to try to figure out if each bid is providing the same quality of construction, timeline, etc.” he continues. “Don’t feel too badly; it’s probably not the first time it’s happened to this particular design/build company.”
David Meiland is another writer who thinks Mesa should feel free to seek construction bids from other companies, although it may be difficult for Mesa to compare the results. He suggests that Mesa ask a couple of companies for “quickie proposals” based on estimates rather than direct input from subcontractors.
“Once you have a few of these in hand, compare them and talk to each company about what you see, and what they see,” Meiland writes. “Spend as much time talking to the actual project manager/superintendent as possible, less with the company owner (unless they’re the same person).
“Personally, I am always happy to ‘bid’ in a situation like this,” Meiland continues. “I don’t want to spend a ton of time soliciting sub bids and shopping materials lists in order to price a job I might not get, but I will definitely spend the 2 to 4 hours it takes to do what I described, especially if I like you, like your project, like where it’s located relative to my shop, etc.”
Too far along to change horses
As helpful as the discussion has been to Mesa, he’s decided he’s too far along in the process to choose someone else to build his new house.
“There has been good integration between the architect and the build-guys and both have been at every meeting we’ve had,” Mesa says. “Perhaps the biggest concern I have is delaying our timeline. This is something that cannot happen. Ethically, I think it’s best if I stick with the design-build firm. We have nothing against them — just that nagging feeling that we could save money by bidding the project out.”
Is he making the right call? Mesa promises to let us know.
Our expert’s opinion
We sent this dialogue to GBA technical director Peter Yost. Here’s what he has to add:
First, my one point: design-build is set up for integration of design, specification, and construction. If a design-build firm captures this in the work, then that has real value; if it does not, then you have missed a real opportunity.
Second, I thought it wise to check in with a building professional who deals with this issue every day, architect and longtime GreenBuildingAdvisor Steve Baczek.
“The basic premise of design-build, and strength for that matter, is all three key players [client, architect, and builder] working together from the start,” says Baczek. “You get the best synergies, greatest efficiencies, and least number of surprises working this way.”
Steve continues: “I believe the most important aspect of any project is managing expectations. When a breakdown in the design-build approach occurs, it is because one of the three key players has failed at managing the expectations of the other two. There is no doubt that this is a very challenging job; every project involves time and money, both highly valued by all parties. Understanding the who, how much, when, and why cannot be overstated. I find myself sometimes ‘handholding’ the client and the builder on what I would assume to be simple and straightforward issues just to be sure that understanding is crystal clear.”
Steve admits that if the architect knows the build side of the company well enough, and has quick and ready access to the builder when questions come up and key decisions need to be made, you might not need the builder actually in the room all the time from the beginning. “But, boy, I can tell you way too many stories about design muffs, wasted time, and blown budgets when the ‘big three’ have not been working together from the beginning.”
Steve wraps up by recommending that the client take his concerns right to the firm and have them make the case for their approach to design-build. “If they are worth their salt, they will have a quick, strong, and compelling case for the way their design-build firm ensures integration and how they will be delivering better value in the overall process. If they don’t have a strong and reassuring response, then maybe you should be looking for another builder, particularly given what you characterize as a relatively simple project.”