Construction Management

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Browsing Construction Management by Author "Solomon Sertse(PhD)"

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    Comparative Construction Cost Analysis of Selected Design -Bid-Build and Design -Build Road Projects in Ethiopia
    (Addis Ababa University, 2020-11-01) Muluken Shibru; Solomon Sertse(PhD)
    Design-bid-build (DBB) and Design-build (DB) are the two common Project Delivery Systems (PDSs) that have been used widely in the international and local construction industry. For DB projects, during tendering, unlike the DBB’s contractor, the responsive design-builder offers a lump-sum amount using incomplete detailed engineering design. Although the DB PDS provides better cost certainty, that certainty may come at a higher premium as compared to DBB. This is because the design-builder allocates a certain risk factor to compensate for the design risk as well as for the lack of information to estimate the work quantities. Previous studies have demonstrated the cost certainty in favor of DB projects than DBB; however, it lacks to examine the amount of risk that comes with cost certainty. To fill this gap, this research undertakes a cost comparison between road projects delivered through the DBB and DB PDS using their cost-per-kilometer. It involves seven road projects (three DBB and four DB projects) tendered by the Ethiopian Roads Authority (ERA) from 2009 to 2017. It used a holistic multiple-case study design, primary sources of data, and document analysis. After ensuring the similarity between the projects, the DB’s bill quantities for selected pay items were multiplied by the corresponding nearby and similar DBB’s bill item-unit rates. The first, second, third, and fourth case analysis shows that DB projects exhibit a higher cost-per-kilometer and they are found to be 12.7%, 17.1%, 11.6%, and 13.5% costly than DBB projects respectively. Therefore, DB PDS can increase the project cost on average by 13.7% than the DBB PDS. This is also expected from the theoretical justification that, due to the lack of detailed information, the design-builder can be argued to include higher markup for possible risks. As a result, unless the project has a high state of urgency, the DBB PDS is the better option than DB PDS from a static cost performance perspective for the ERA context.