Originally published in the July 1998 issue of:

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Design? Build? Design/Build?

by Barry McKinnon

of Mc2Systems Design Group

This is because there are fewer ways to get these things right than there are to get them wrong

...the reality of these projects can be somewhat different than the theory...

The shape of the construction market has been changing quite radically in the past few years, and the roles that contractors and consultants play in that process has been changing as well. The growth of the design/build market on a grand scale has led to some interesting new arrangements amongst the design and contracting players. Some of the changes have led to a streamlining of the design process, and some have produced a process that looks more like a football game in the configuration and alignment of the design team(s).

In the 1990's world of corporate reorganization, re-purposing, outsourcing and team building, the quest for lower cost approaches to major construction projects are inevitable. The new order of project design and construction certainly raises some interesting questions for the design community. It also can force some new responsibilities upon the designers that they are unaccustomed to dealing with.

In the old days (way back, like 5 to 10 years ago), the role that the acoustical consultant / system designer played in a new construction project was to be the owner's knowledgeable representative and advocate to ensure that the design team produced a facility that had suitable acoustics and sound/video systems for the program that the owner had in mind for the facility. The consultant would typically be hired directly by the owner, or by the architect, and operate in the owner's best interest, optimizing the owner's investment in equipment and materials. In that role, the acoustical consultant's responsibility is clear. Even where the consultant is hired by the architect, the consultant has to keep the design team's rear-end out of the fire, and keep the design on track with the owner's program. This is usually a case of persistently nudging the team in the right direction, but may mean going head-to-head with the design team to keep nasty mistakes from being made. This is the classic consultant role where acoustical consultants and system designers have developed their reputation for being annoying and uncompromising, and a general pain in the behind. This is because there are fewer ways to get these things right than there are to get them wrong. The right way to do things is almost always more expensive than the wrong way to do things, and always more work to implement, so there's almost always a fight for justification for doing it right.

How does that classic taste of consulting differ from the new taste of consulting? The answer to that depends on who actually employs the consultant. There are many options, and they can fall into the entire range from tiny to huge projects. It can be as simple as a sound contractor hiring a consultant to produce a loudspeaker or system design for a difficult or novel environment that is outside the contractor's experience. Sometimes the contractor will use the fact that they will hire an independent consultant to design and test the system as a selling point to the client. In this situation the consultant may end up working for the owner or the contractor, it really depends on the owner's comfort level with the contractor. As long as the consultant has the flexibility to choose the most applicable products from the contractor's product lines, and can deliver the required performance with the final system design, there is no inherent conflict of interest in this approach. If the consultant is just providing the appearance of credibility for the vendor's design without actually vetting the design, or double checking the performance, that's a more questionable situation. This is a small scale example though, and the really interesting situations happen at the large project end of the scale.

One of the possible scenarios is a design/build consortium of a general contractor and a design team. In this type of scenario, the owner may have issued an RFP (Request for Proposal) for a complete turn-key package for a facility, and the general contractor will assemble a team of designers and subcontractors to develop a design and then build it for some specific budget amount. The theory behind this approach is that the project can move forward more quickly because the normal tender process is abandoned and construction can occur as fast as the drawings are produced. Because the contractor has already agreed upon a price, the contractor will (in theory) work to keep the costs as low as possible and deliver what the client has asked for. Much like that phrase "your mileage may vary", the reality of these projects can be somewhat different than the theory, but we'll come back to that.

In this type of arrangement, the project team will be responsible for keeping the project on track and on budget. The makeup of that project team may vary as well, depending upon the agreement with the owner. One possible arrangement is to have the general contractor be in charge of the project, taking on the role of project manager and contractor. That presents some interesting challenges for the consultants because that means that even though the design team is developing a design for the owner, the contractor controls both the purse strings and the design team, the design team is working for the general contractor/project manager. You may see a potential conflict of interest there, and you'd be right. In this case, the consultants are not in a position to ensure (even though every liability insurance company on the planet will tell you to never use the word "ensure" in any communication) that the owner's interests are being looked after. Because the combined project manager/contractor has hired the design team, the consultants do not have the leverage as the owner's representative that would be desirable. When the project has budget problems and cuts have to happen, they can include important items that affect the owner's program for the facility, but the consultants are not in a position to protect that program.

That situation can be offset by having an independent project manager that is hired by the owner to assemble and coordinate the design team and the construction team. That provides the necessary independence in decision making to allow the consultants to bring issues forward to the owner's representative so that there is a chance that the owner's requirements can be met. This process at least provides a usable forum to bring issues to the owner through the project manager and have informed decisions made involving budgets and function.

con sultant or con tractor

Value engineering is never more of a blood sport than in this type of project

...the consultant is on the verge of becoming an OEM manufacturer rather than just a consultant

Another situation that happens occasionally (and the one that looks more like a football game than a design/build project) is the home team versus the visiting team approach. In this interesting model, the owner assembles a team of consultants that develop an RFP and a detailed program for the facility. The RFP calls for a general contractor to assemble a design/build team that includes a different group of consultants who then proceed to design a facility that meets all those requirements for the agreed upon budget amount. As the design develops, the home team then reviews the design produced by the visiting team, comments on it where necessary and bounces it back into play for a few volleys. In this process, changes happen, things come and go, and a design is winnowed out of the chaff. This arrangement offers a more sporting approach where one team is looking out for the owner's best interest (the program), and the other team is looking out for the contractor's best interest (the profit margin). The home team is trying to get the best quality and performance for the owner's investment, the visiting team is trying to get the best quality and performance while balancing the contractor's pressure to do it for the least amount of money spent. Value engineering is never more of a blood sport than in this type of project. The advantage is that the owner can get all, or most of, what they were after (as long as the budget was realistic to start with), and the contractor generally gets an adequate profit margin that they don't go into receivership. And through that process, two entire consulting teams find employment ( a win-win situation if I've ever seen one ).

Now let's have a look at some of the details of what this means for the consultant working inside of a design/build team. Since there's no open or public tender process (or at least there's often no requirement to have a public tender), the choice of products and the design can be more tightly controlled by the consultant. The consultant does not have to check for several suitable alternates for products, and doesn't have to design a system with enough "elbow room" to work with several different products.

The consultant may end up acting as a purchasing agent for the design/build group in this scenario, being actively involved in negotiating with manufacturers or suppliers for special large volume pricing through a local dealer (or in some cases, directly with the manufacturer). This may mean that consultant can use their primary choice product and still deliver a very cost effective system for the owner, and at a price point that would not be possible through a tendered project (exactly the reason many dealers and system contractors dislike this approach).

One of the major advantage to this approach is that custom fabrication is also easier to develop with particular manufacturers. Very specialized products can be designed and because the price can be negotiated directly with the manufacturer, the costs will often be lower than would be expected from tendering custom fabrications. This also means that products from several manufacturers can also be mixed in these assemblies, especially in loudspeakers, resulting in the best performance possible for the owner (despite what the marketing departments of various manufacturers may say).

Where there are significant amounts of custom fabrications involved, the consultant is on the verge of becoming an OEM manufacturer rather than just a consultant. This product specification process is very similar to the one manufacturers will use when having products assembled to their specification for resale. The consultant will often have to provide QC inspections, testing and production supervision during this process unless an established loudspeaker manufacturer is doing the custom fabrication for the consultant. Sometimes it will be a combination of local sub-contractors instead which increases the amount of specialized technical supervision and management required.

For the system designer, not being able to find exactly what you want in anyone's catalog is frustrating, but it can be very cost effective to have custom products made to order, rather than making do with some combination of off-the-shelf-components. This can often reduce device count while improving performance. For this type of "hands-on" project and product management, additional manpower is required and more billable hours, so it begins to make sense to have someone who is charged out at lower billing rate to handle this level of project management.

Taking this one step further, in large scale systems, a good portion of the work involved is pulling wire into conduit and trays. Because the general contractor already has an electrical contractor on site, the electrical contractor will be tasked with the wire pulling and conduit/box installation, and will likely be involved in mounting and installing loudspeakers as well. The task of mounting equipment in a suitable fashion in the racks, and terminating cable, connectors and panels may require more specialized and skilled labour, and once again more specialized project management. Depending upon how the project is organized, the additional skilled labour may be brought in through contract workers rather than a systems contractor, or a system contractor's labour force may be contracted to do the work, even though they aren't technically the contractor that was awarded the job (since the job was not tendered). In this instance, the consultant once again needs to provide a technical site supervisor. Because the consultant's site supervisor will need to spend a great deal of time on site, it can't generally be one of the primary project consultants, but needs to be someone who understands the consultant's approach fully, and can see that the design is implemented correctly.

Just like there was a slim difference between the consultant and a small scale manufacturer, there is an equally slim difference between the consultant and a contractor once this level of "hands-on" is involved. Probably every consultant that has been frustrated by the inability to find the exact product they want, or to have things fabricated and installed the way they were intended, has thought of this. Sometimes its like the old adage " If you want something done right you have to do it yourself."

So what sets the "hands-on" system consultant apart from a systems contractor? They both have a fairly similar job description at this point in the example described, and the end result to the owner looks the same. Part of it relates to following the money (who makes the profit?). If the consultant is directly involved in the manufacture of a custom product to the extent described above, but the profit for the actual sale of the product goes to other vendors at arms' length to the consultant, then it is essentially the same as a consultant handling a disbursement, charged at cost to the owner. The consultant is performing as an extension of the owner, acting as their expert in procurement, purchasing or project management.

If the consultant is making a profit on the products being sold or recommended, then that is a different game entirely, and one where the consultant has crossed the line into being a vendor/contractor. Probably every consultant has thought of the potential profit from the sale of a sure-fire problem solver that they have created or implemented but bumped into that basic ethical dilemma of being a consultant or a contractor/vendor. A few consulting firms have made the full leap from selling information to selling hardware, and others have tried to straddle the fence by starting an independent contracting or manufacturing arm as well. A few contractors have made the move to consulting because they find they have acquired information that others are willing to pay for, so it isn't a one way street by any means.

The primary success factor in moving from consultant to contractor (or vice versa) is carving out a niche in a specialized area of system design/installation/assembly. Even though it seems like it should be able to be a profitable enough venture, most contractors already know how hard it is to make a buck in the mainstream bid business, so specialization is the key. The grass is always greener on the other side, but you can only stand on one side at a time.

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