THERE ARE SEVERAL METHODS church leaders can use when embarking on a building project. The design-build method and the competitive-bid method (often called “design-bid-build”) are the two most common approaches for churches to take. The bid option can allow you to choose the lowest projected construction cost, while the design-build system can offer all design and construction services from one company. Since these two approaches are in hot competition with one another, churches must weigh the pros and cons of each – more church control, room for future growth, a project finished on time. Find out which delivery method is best for you.

Looking to sound off? E-mail opinions on this or other hot topics to Managing Editor Lacey Nadeau at lnadeau@vpico.com. 

Todd Phillippi is a licensed architect and professional planner with more than 25 years of experience. Since 1999, he has led WPH Architects for Ministry, a company that provides solutions for ministry space needs. As an involved member in his local church, he has worked in numerous ministry and leadership capacities.

Bill Derrick is president and CEO of Derrick Companies, a commercial and residential development and construction firm serving western Wisconsin and the greater metropolitan area of St. Paul and Minneapolis. He is a certified church consultant and member of the board of directors for the National Association of Church Design Builders (NACDB).

THERE ARE SEVERAL DELIVERY methods that a church can use for building projects. The two most common approaches for churches to take are design-build and competitive bidding. Many design-build contractors characterize the latter method – the way architects work – as “design-bid-build.” The downfall to this approach, they claim, is that an architect designs everything you want, but you don’t know how much it will cost to build until after bidding-out their very expensive plans, when you realize that you can’t afford it. While such criticism may be valid at times, this oversimplification can prevent a church from seeing the significant value gained by hiring an architect from the onset. This characterization also obscures another – perhaps better – project delivery option available to churches.

When a church hires a design-builder, it hires a builder who agrees to build for a predetermined cost. The design-builder contracts the many trades needed for the project, including a licensed architect, whose plans are needed before a building permit can be obtained. The design-builder may also facilitate or contract out other aspects of the project, such as the municipal approval process, which would otherwise often be led by the architect. In order for the design-builder to be able to deliver the building for the predetermined cost, the church must give up control over many decisions. The church trades the risk of cost overruns for the risk of an end-product that might not serve it best in the long run. Examples of this include products that do not stand up to the heavy use a building sees over time, less expensive heating and air-cooling systems that use substantially more energy, and accumulation of significant building code and construction issues that can interfere with future expansion.

One of many advantages gained by hiring an architect is the fact that planning will be done with future growth in mind, as most architects are also master planners. Master planning includes analyzing the development potential of a property and relating it to growth trends in the church. Architects are professionally trained to do this, whereas most design-builders are not. By developing a phased master plan, the building placement and type of construction used will allow the church facility to grow in an organized manner over time.

If you’re concerned about cost overruns, hiring an architect from the onset can offer plenty of price protection. The standard American Institute of Architects (AIA) agreement used by most architects requires the design to conform to the church’s approved budget. In fact, if the project is bid out competitively and comes in over budget, the architect is often responsible to redesign it to fit the budget – at no cost to the church. Competitive bidding of a good set of plans ensures that the church gets what it wants for the best price possible.

During construction, the architect serves as the church’s watchdog, reviewing the work for quality and conformity. This is not only in the church’s interest, but the architect’s as well, as his liability lasts long after the contractor has left the project. (The typical liability period for a contractor or design-builder is only one year, whereas the architect’s liability can last up to 20 years in some states.) Under a standard AIA agreement, the architect is legally designated as the person to decide the validity of any claims the contractor proposes for additional costs or change orders, protecting the church from unscrupulous contractors. A church misses out on these benefits if it chooses the design-build method.

However, I do not mean to suggest that the conventional competitive-bid method is the best. The project delivery method we advocate most often involves hiring first the architect as the master planner and designer — allowing the church to get full value from its selection of an architect — and making an early selection of a construction manager to provide cost control and build the project. We require that all parties work open-book with an agreed-upon percentage fee. When the design has been developed to the point that the construction manager is confident of the costs, a not-to-exceed contract for the construction is executed and any savings go to the church. This approach fosters unity, removing the perception of conflicting interests and mirroring the unity expressed in Hebrews 11:10: “For he was looking for the city which has foundations, whose architect and builder is God.”

This team approach provides the best opportunity for quality design, price assurance and accountability. By the inclusion of three parties, it becomes a system of checks and balances, preventing one party from having all the power, which is often the case with the design-build approach. 

WHEN APPROACHING AN UPCOMING building project, a church will eventually have to face the question of how to hire a design and construction professional. Traditionally, the church will first hire an architectural firm to prepare the drawings and specifications. Then it will choose a contractor by competitive bidding, usually accepting the contractor with the best price (though, many times, the lowest bid is still well over the church’s budget). This is referred to as the design-bid-build (DBB) approach.

This method typically results in many change orders, which means the project may come in even more over-budget. Another problem with this approach is the finger-pointing: The architect says a complication is the builder’s fault, and the builder says it’s the architect’s fault. Meanwhile, the church is left with a problem that isn’t resolved and may eventually cost additional money. All these issues cause frustration for church leaders during the construction of their new facility.

So what can a church do to avoid the potential problems of the DBB approach? The answer is to turn to the design-build (DB) approach, which virtually eliminates all problems associated with the traditional bid method. The DB method means one company has a single contract to provide both services – design and construction – which eliminates finger-pointing between the architect and the contractor.

According to the Design-Build Institute of America, the DB approach is now used in more than 30 percent of all nonresidential, low-rise construction projects, and market share is growing by about 2 percent each year. The main reason for its gain in popularity is most likely due to the fact that this process assures a project will be completed on time and within budget.

In 1997, Penn State University conducted a study that presented quantitative evidence that the DB system is more economical and efficient than the traditional DBB project delivery system. It reported the following:

• Cost of construction: DB was at least 6 percent less than DBB.
• Construction speed: DB was at least 12 percent faster than DBB.
• Overall delivery speed: DB was at least 33 percent faster than DBB.
• Quality: DB exceeded quality expectation at all levels.

These figures make sense because, with the DB method, the designer and contractor work as a team from the start, and coordinate to meet the church’s budget and time frame. Certainly, lower cost and less time are major benefits, but let’s look at a summary of DB’s other benefits:

1. Choosing a construction professional on the basis of confidence and trust – rather than low price – means less risk. In fact, with the traditional DBB approach, the owner must guarantee the contractor that the design documents are free from error. With the DB method, on the other hand, the contractor is the one who guarantees the owner that the documents are complete and free from error, thus minimizing risk to the owner.
2. It sets up good communication and a team relationship among the contractor, architect and owner, instead of an adversarial relationship that can result from choosing your contractor based on low bid.
3. The church gets early cost input from the contractor, as well as creative solutions to problems that arise.
4. The number and size of change orders is greatly decreased.
5. Construction costs are minimized by using the latest systems and methods that the contractor knows are cost-effective.
6. Realistic budgets and completion dates are established early by the contractor, who is under contract to meet that budget and timeline.
7. Single-source responsibility means no finger-pointing.

Of course, to realize these benefits, it is important to hire the right design-builder. Make sure your contractor has the necessary church-building experience. Also be sure you know who will be performing the design-builder’s services: Does the builder have a design staff in-house, or does he outsource the work to a separate architectural firm? Make sure that your builder has a proven track record of successfully completing projects on time and on budget. Most importantly, you need to trust that the builder will always be acting in your best interest.

So if DB is so great, why doesn’t everyone use this process? It’s like every innovation: Humans are slow to embrace change, even when it’s for the best. This process is still not as understood as it needs to be. If churches can embrace the fact that they don’t need multiple bids for a project, and let go of the fear that they will be paying too much, I believe they will have a much better building experience using the DB process.