Introduction
Good News! The endless scrolling is no longer in vain. Think about all the pins, links, and videos you saved in your private collection. Building a custom home is one of many life milestones we strive to achieve. Reaching this part of life requires significant financial and emotional investments. Leading up to this point, you have collected design ideas, set your budget, and started visualizing your dream home. However, one critical decision many new homeowners overlook until too late is how to handle the business aspect of a custom home build.
The business can be handled in various ways. Each path has its strengths and weaknesses. The game plan should start at the end, and we should work backward to the starting point. Ultimately, it is a custom-finished home; before that, it is the construction method. Commonly known as the project delivery method, this changes the overall experience of the ups and downs. Also, you need to know the cost, scope, schedule, communication, and the amount of control you desire as a homeowner. We will unfold all of this to the very beginning.
In this blog, we'll explain how to choose the right delivery method for your custom home or major renovation. We'll also introduce you to a professional tool called the Project Delivery and Contract Strategy (PDCS) framework, which was designed initially for commercial projects but could be utilized to help you, as a homeowner, make smarter, stress-reducing decisions. So, let's begin, shall we? We Shall!
What Is a Project Delivery Method?
The project delivery method is the structure of relationships and contracts between the 3 key players:
You (the homeowner) are often referred to as the Client.
The Designer (Architect or Engineer of Record) is a licensed professional or a Design team that later works with the Architect. A well-known approach to this is called "Bridging."
The Builder (general contractor or construction firm)
**Suppliers and product representatives** They are not considered key players. Still, for context, when dealing with specialized equipment and innovative materials, you will need the right skills and knowledge.
Why It Matters
Once you identify the player you want on the roster, we must determine how to approach and play the game. Keep in mind that each project method impacts how contracts are set up, when each player enters the game, and how risks are handled. Here are some general questions to get you thinking:
How complex is the project?
How much does it cost? Am I prepared for a price hike?
How involved do I want to be? Wave a wand, and it is magically done?
How do you plan to address delays, or how can problems be resolved?
Common Project Delivery Methods
You should get a notepad or set your bookmark. Let's look at the most common project delivery methods. There are many different variations of delivering your project. You are not limited to the four mentioned below.
1. Design-Bid-Build (DBB) Traditional and Sequential
Design Bid Build (DBB) is most commonly used for delivery projects and is considered an optimized option for homeowners. Due to the project sequence, each phase must be completed before moving on to the next stage. You are responsible for hiring a designer first. Once the Design is complete, the next step is bidding; you must collect different contractor bids. Often, with multiple contractors, it leads to competitive bidding, which works more in your favor. You can choose to accept the lowest bidder or the all-around best-fit contractor. The advantage of DBB is that, as a homeowner, there is a clear separation of each phase, role, and responsibility; ultimately, you can control the pace at which you start and stop. The flip side is that there is less collaboration between the Designer and Contractor, limiting constructability reviews, which can make any changes during construction more expensive. So, if I had to give the method a grade for a new homeowner with limited experience, it would be B-. If you have experience, I would upgrade the grade to an A+.
2. Design-Build (DB) One Team, One Contract
Here is a throwback, but do you remember a classic movie called "Drumline" starring Nick Cannon, the famous line "One Band! One Sound!" This mantra rings true under this delivery method. You will hire a single firm (Usually one entity that merges two companies under one Contract) that handles Design and construction. Consider it a one-stop approach. It's incredible, right? It is also considered a faster project delivery due to one point of contact. On the flip side, there will be less design control and fewer opportunities to express your direct inputs. Also, with everything in-house under one umbrella, it is more complex to gain competitive pricing. If you're not experienced with this approach, your grade is A+, and if you are experienced, then B- due to limited control from the homeowner side.
3. Construction Manager at Risk (CMAR) Early Builder Involvement
This option is best suited for obtaining a "safe route" compared to other delivery methods. You will gain many benefits. In this case, you hire a Construction Manager during the design phase. They often offer guarantees of maximum price (GMP) and oversee the whole building process. The advantages are ease of collaboration and early cost control. Best suited for homes that have complexity, for example, steep slopes, major site restrictions, or if you are planning to build a grand home estate involving complexity in the Design. Compared to DBB, the CMAR route may be more expensive. There are alternatives, such as the Construction Manager as Agent or the Construction Manager as Advisor; this is different because advisors are not responsible for the physical build.
4. Integrated Project Delivery (IPD) Everyone Shares the Risk
The easiest delivery is when everyone shows up on day one. Everyone is involved in that first Zoom meeting. The risks and rewards are shared among all parties, which can limit blame and finger-pointing (it does not stop gossip). It is highly collaborative due to early involvement. Granted, it is not common in residential. I share to keep you informed of possible options.
How to Choose the Right Construction Method for Your Home
Due to the infinite possibilities for completing the project, I have curated a series of questions to help think outside the box and narrow down the most suitable project delivery method to proceed with.
Key Questions to Ask Yourself:
Budget: Do I need strict cost control, or can I handle some flexibility?
Schedule: Is there a hard deadline for move-in?
Design Control: Do I want to make all key design decisions?
Complexity: Is the Design straightforward or highly customized?
Risk: Am I comfortable managing multiple contractors or unknowns?
Experience: Have I done this before, or do you need professional support?
The PDCSTool for decision making
Alright, I have a free tool that can be downloaded below. Sign up with your email, which will be sent directly for personal use. The full PDCS is an Excel-based system usually used by construction professionals. You now have the inside scoop! Keep in mind that it is primarily used for large commercial projects, but it is still a great tool to get your feet wet. The PDCS is a tool to assist in the decision-making process. By clarifying your project goals, identifying the top priorities, and comparing how different project delivery methods may perform on what ultimately matters to you.
How the PDCS Framework Works
Step 1: Define Your Project Goals
Step 2: Choose the Key Success Factors (Cost control, Timeline, Level of Control)
Step 3: Assign Priorities to Each Factor by assigning each factor a weight based on its importance to your project. Value 10 is most important to you, 1 being least important.
Step 4: Compare Delivery Methods Using Your Priorities
Step 5: Think Through Your Contract Options (Lump Sum, Cost Plus Fee, Guaranteed Maximum Price (GMP)
Step 6: Make Your Final Decision with Confidence
The true beauty of utilizing the PDCS tool is that it provides insight very early on before any money has been spent. Did you know that most delays, budget overruns, and dispute claims are not the root of a poor design but due to poor planning? Therefore, good planning leads to success.
Conclusion
Did your confidence rise up?! That is what we want for you! Learn about the many delivery project methods and explore your options using the PDCS tool. Before the Design begins, think about the business and the structure of how you want to run your project. Each possible method of the Contract will have to be tailored to that project. Have open communication with everyone on your team. During the planning phase, taking the time now is the best way to limit stress, protect your investment, and turn your vision into reality. Consider reaching out to us directly. We can assist you with making a confident, informed decision from the start.
Free Download. Designed initially for commercial projects but could be utilized to help you, as a homeowner, make smarter, stress-reducing decisions.
About the Author
Anne Harris combines her background in architecture with her passion for construction law to help homeowners tackle their biggest renovation questions. When she's not sketching plans or breaking down legal regulations, you'll find her enjoying live music, hiking, catching sunsets, or exploring new creative outlets. Anne believes every project starts with details of possibilities, whether a home or a dream.
