Beyond Low Bid: Exploring Better Construction Delivery Methods
Hello everyone in construction land! Recently, I had the pleasure of hosting Tina McPhail, Executive Vice President and CFO of Pray Construction, on our construction-industry podcast, Construct-ive Conversations, to discuss construction delivery methods and potential legislation that could improve public construction projects in West Virginia.
The Deeper Purpose of Construction
One particularly striking insight Tina shared was about the true purpose of construction work. She recalled a ribbon-cutting ceremony where a client thanked Pray because "it gave him the infrastructure to better serve his mission in the world." This perspective resonated with me - construction isn't just about bricks, mortar, and maintenance. It's about enabling organizations to deliver their missions more effectively, whether that's providing cancer treatment, educating children, creating worship spaces, or offering places for social gathering.
As Tina eloquently explained, while she "may never save a life" like a healthcare worker might, construction professionals participate in "the moving forward of mankind and how they use their space" to free up people's minds and workflows to be creative and solve problems.
Construction Delivery Methods: The Problem with Low Bid
Currently in West Virginia, design-bid-build (commonly called "hard bid" or "low bid") is the predominant method available for public works projects. The low bid process creates several significant challenges:
The owner (the entity with the need and the funding) and the contractor who will build the building gets extracted from the equation until the very end. As Tina explained, the process begins with an owner approaching a designer who creates plans without much input from the owner regarding some very practical considerations, cost of choice being one of them. The owner then disappears from the conversation until bids are opened, at which point they may discover the project as designed is completely unaffordable. This disconnect creates tremendous waste and frustration for all parties involved.
Contractors focus solely on having the lowest bid rather than delivering the best value. In this environment, contractors aren't incentivized to consider what's best for the building or its future users. Instead, they focus exclusively on beating their competitors' prices. As Tina pointed out, "The only thing I have to care about is how to win against the next guy." This fundamentally changes the paradigm of what contractors are doing at the table.
Budget considerations don't enter until after designs are complete. Architects may reach out to retail estimation services for a ballpark estimate, but that is not the same thing as a collaboratively driven detailed budget. One of the most problematic aspects of the low-bid model is that financial considerations are an afterthought. Tina described scenarios where a commercial low bid building might come in at $15 million when the budget was only $10 million. At this point, the project either stalls completely or gets dramatically scaled back, wasting valuable time and resources for everyone involved.
Designs are often flawed because they're created in a vacuum. Tina made the candid observation that "designs are flawed" because they're created without practical construction input like detailed pricing and constructability. Contractors often identify issues in the plans but deliberately don't address them during bidding because doing so would increase their price and cost them the job. Instead, they wait until after winning the contract to introduce these concerns as change orders.
According to Tina's experience, the low-bid method rarely delivers an optimal outcome for those commercial building projects where performance of the building is the key desire. When asked how many public low-bid jobs finish without a single change order, Tina indicated overwhelmingly zero. Most projects end up with dozens of change orders, extending timelines and increasing costs.
Tina shared a particularly heartbreaking example of this system's challenges: the Nicholas and Kanawha County flood recovery. After devastating floods, bids for new schools came in significantly higher than FEMA's allocated budget. The result? Years of delays, with some students spending their entire high school careers in trailers. As Tina noted with visible emotion, "They never had a high school. They were in trailers the entire time. Never had a prom, never had a high school, never had a gym, never had a football field." This tragedy might have been avoided with a more collaborative procurement process that considered budget constraints from the beginning.
A Better Way Forward
Tina and the team at Pray Construction are advocating for alternative delivery methods through Senate Bill 587, introduced by Senator Glenn Jeffries (also a construction business owner). This legislative effort represents a grassroots campaign driven by industry professionals who witnessed firsthand the limitations of the current system. The bill, currently moving through House and Senate committees, would allow for a modified design-build approach on certain public projects without disrupting the existing low-bid option.
This proposed methodology would create a fundamentally different project environment. Rather than the linear, consecutive process of design-bid-build, it establishes a team of collaborators who are contractually bound to work together from the beginning. The owner, architect, contractor, and financing agency all sit at the table simultaneously, creating a unified approach to the project. Throughout the design process, pricing and budgeting happen in real-time, allowing everyone to make informed decisions that respect financial constraints while maximizing value.
Pray utilizes this method on many privately owned projects. One of the most significant advantages is schedule compression through concurrent work streams. Once budget is established and while completing the design, teams can begin breaking ground and starting work while continuing to refine interior designs, fixtures, and other details. This concurrent approach dramatically shortens project timelines, reducing costs and allowing facilities to begin serving their missions sooner.
The financial benefits extend beyond just schedule efficiency. Tina shared that on design-build projects, they frequently complete work with zero change orders – a stark contrast to their public bid projects, which invariably involve numerous changes. When cost savings are identified during the project, these typically flow back to the owner who can reinvest them in additional features that enhance the facility's functionality. As Tina described, rather than asking for money back, clients typically use savings to add elements like "extra landscaping, a fountain, a smart board, communication equipment, or furniture" that further advance their mission.
Importantly, this approach isn't meant to replace low bid entirely. As Tina explained, low bid still works well for certain projects, particularly those with more commodity-type activities like highway paving or elevator modernizations. What's needed is the flexibility to choose the right method for each project, a choice that West Virginia's neighboring states already enjoy.
Addressing Misconceptions
Tina also tackled some common misconceptions about contractors:
- Myth: Contractors love change orders
Reality: Change orders extend schedules and disrupt future revenue plans - Myth: The low bidder is always the best option
Reality: When results and performance matter (which is almost always in commercial construction), value trumps initial price
As Tina pointed out, most of us rarely choose the cheapest option in our personal lives when performance matters. We shouldn't expect different standards for our public infrastructure.
Looking Forward
West Virginia has fallen behind neighboring states like Ohio, Pennsylvania, Virginia, and North Carolina, which already allow alternative delivery methods. The proposed legislation would bring our state in line with modern practices while ensuring qualified contractors are selected for appropriate projects.
While it's uncertain whether the bill will pass during the current legislative session, Tina and her colleagues remain hopeful that it will eventually be enacted, whether this year or next.
For now, we at Brown Edwards will continue to support innovative approaches that help our clients deliver their missions more effectively through better-built infrastructure.