Design-Build Institute of America

P3 Design-Build Offers Valuable ‘Tool in the Toolbox’ to Make Mega-Projects Successful



Public-private partnerships – P3s, for short – offer owners, investors and contractors the opportunity to make large-scale construction ventures happen while allocating risk across the entire project team.

Funding capacity and risk allocation are undoubtedly two of the biggest drivers of a decision to structure a mega-project as a P3. Associated General Contractors of America’s Brian Turmail, vice president of public affairs and strategic initiatives, says P3s enable owners to move forward on a project without having to secure full financing on their own.

“However, P3 projects can be risky because they are often run by internationally based financiers who do not know or understand construction,” Turmail says. “These financiers come up with contracts that are typically very long – hundreds of pages – and are non-standard, and they tend to pass all the risks of the project to the construction teams. For instance, inappropriate risks like underground utilities or all permitting might be shifted to the lead builder.”

Material quantities and subsequent pricing risks are often also passed to the contract on P3s, according to Turmail. “Because these projects are typically enormous, involve a lot of money and are often extremely complex, the quantities involved for these massive projects have very expensive ramifications,” he adds. “When the assumptions are off, even by a little, it can have massive impact on the project overall.”

Because P3 construction projects, by their nature, often take multiple years to build, says Turmail, this also increases risk.

To balance project risk, a growing number of mega-projects structured as P3s are being delivered via design-build rather than traditional design-bid-build. Advantages to design-build mega-project delivery, says Bill Hasbrook, include proper risk allocation, team-wide accountability and shared goals with a stake in the project’s outcome. Hasbrook is a board member of the Design-Build Institute of America and vice president in the Austin office of San Diego-based Kleinfelder, Inc., a professional services firm that performs engineering, construction management, design and environmental due diligence.

“You don’t have to use design-build project delivery for every P3,” says Hasbrook, “but it is a solid tool to have in your toolbox and use when you need it. Design-build can often help you leverage your dollars more effectively. For public sector entities, it does a great job of freeing up the money you would have ordinarily spent on the construction project on another budgeted need.”

For example, LaGuardia Airport’s nearly completed $4 billion, 1.3 million-square-foot Terminal B, a six-year construction project, is a P3 known as LaGuardia Gateway Partners with design-build delivery. Its operators, the Port Authority of New York and New Jersey, and its owner, the City of New York, are partners with a Paris-based global investor and asset manager, a Swedish construction and development company and a Vancouver, Canada airport management, development and investment firm. Design-build project delivery within the shell of a P3 holds all entities accountable to stay on track and within budget. The terminal will reach completion later this summer.

“The Design-Build Institute is an interesting organization because we don’t cater to just one entity,” Hasbrook says. “We cater to the design-build method itself. We have a three-legged stool that includes owner, designer and builder. Design-Build Done Right® best practices ensure that owners and practitioners will unlock the inherent value of design-build project delivery.”

Four key risk-oriented questions should guide contractors when considering whether to bid on a job, says Hasbrook: 1) Can I insure the risk? 2) If I can’t insure it, can I quantify the risk and put a dollar amount in my bid? 3) If I can’t insure it and can’t quantify it, can I still handle the risk? and 4) If I can’t do any of these, should I walk away from the project?

“There’s no cookie cutter answer to any project,” he adds. “Each stands on its own.”

Texas Facilities Commission Director of Public-Private Partnerships Jon Conant says the TFC builds and maintains state facilities in 258 cities for more than 100 state agencies totaling 26 million square feet. “Balancing a portfolio of built and owned facilities versus leasing buildings from the private sector is always a debate for governments,” says Conant. “With limited funding, the cost of ownership and maintenance is constantly competing with funding requests for essential services. The P3 model is becoming attractive to states as they see the risk transfer results in a lower cost of the risk retained by the state compared to traditional delivery methods.”

In a traditional design-bid-build, the owner must specify all the details and let the project as a hard bid. Conant says an interesting advantage to a P3 project is that the owner doesn’t have to price a project upfront before all the cost unknowns are determined, thus shifting the cost risk across the P3 partners.

The Center for Alternative Finance and Procurement, managed by the TFC as a 2015 unfunded mandate by the Texas Legislature, connects governmental entities with qualified consultants and other professional resources to assist in determining the scope and merits of a P3 delivery over other delivery methods using a pre-solicitation evaluation process. The Center may also participate in the evaluation of proposals received and in the negotiations of agreements to ensure that government achieves the best value for taxpayers’ money.

A local example is the Highland Mall redevelopment project in Austin. The City of Austin is transforming the retail center into a mixed-use development with offices for city departments.

“We’re here to support governmental entities if they decide to use an alternative delivery method,” says Conant. “We have a bench of advisors – financial, technical, legal and real estate – who can help connect government with qualified private sector advisors to ensure success. P3 is a delivery method that tends to provide faster delivery and better value through risk transfer on complex projects, but it is not a magic wand…you must have the resources to be able to utilize it.”


KAI Receives Design-Build Institute of America Award for Deaconess Center for Child Well-Being Project


FacebooktwitterlinkedinmailKAI Design & Build proudly announces that its design-build team has received a Design-Build Institute of America – Mid-America Region (DBIA-MAR) 2018 Honor Award in the Commercial-Office Buildings category for the Deaconess Center for Child Well-Being in St. Louis, Missouri.

For more than 18 years, the DBIA-MAR has recognized excellence in design-build practices and informed the public of the breadth and value of design-build delivery through its annual awards program. An event honoring this year’s award winners was held on Nov. 15 in Kansas City, Missouri.

“I am proud to have had the opportunity to represent our team at the 2018 awards luncheon,” said Marcus Moomey, Director of Design-Build at KAI Design & Build. “The project leveraged the talents of the entire project team. The owner’s team dedicated the time to define and refine their needs related to the project budget, schedule and level of quality desired. The design team facilitated a process to define and distill the project scope to its core components and developed a solution that was fitting to its owner and its place in the city. The construction team leveraged the talents of our sub-contracting partners to find innovative solutions that aligned with our cost model and schedule requirements.”

KAI completed construction of the $8.5 million Deaconess Center for Child Well-Being in December 2017. The 21,272-square-foot facility at 1000 North Vandeventer in the Grand Center Arts District of St. Louis City provides meeting and office space for child advocates, civic leaders and community organizers dedicated to enhancing the well-being of at-risk children.

Since time was of the essence on the project, as the Deaconess Foundation’s lease at its previous office space was set to expire on December 31, 2017, the organization chose to implement the project using the design-build delivery method with the added advantage of an interactive programming and design process provided by minority-owned KAI.

The Deaconess Center is the Foundation’s first new construction in almost two decades. The design and construction of the building reflects Deaconess’ religious legacy as well as its commitment to social causes by exceeding the city’s business diversity participation goals. The project achieved 36% Minority Business Enterprises (MBE) and 3% Women Owned Business Enterprises (WBE) participation. Elizabeth Noonan, an economic development professional and United Church of Christ member, served as the Project Manager, and minority-owned Kwame Building Group was the Construction Manager.

With input from their talented sub-contractors and with an eye on the project schedule, budget and desired level of quality, KAI’s team selected tilt-up concrete construction for the building’s exterior façade.  Additionally, the team used vibrated aggregate piers to improve the urban soils and drastically reduce the owner’s site remediation cost and associated schedule impact.

The completed Deaconess Center provides meeting rooms, a chapel, and a large conference space for up to 125 people, as well as administrative offices for the Deaconess Foundation, Vision for Children at Risk, and Neighborhood Houses — a United Church of Christ ministry that supports low-income children and families of the inner core of St. Louis City. The facility’s design incorporates many elements that appeal to children such as bright colors, eye-catching artwork by artist and illustrator Cbabi Bayoc and garden spaces.

The Deaconess Center is expected to host more than 6,000 citizens a year in more than 250 meetings focused on children’s issues.

KAI Design & Build is a national 100+ person design and build firm headquartered in St. Louis, Missouri. KAI provides design and build integrated project delivery solutions through client collaboration, the latest technology, proprietary processes and individual expertise. For more information about KAI Design & Build, visit or call 314-241-8188.