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Make Design Build Work for Architects

ALERT: The House and Senate are addressing federal design-build reform this week. The AIA has sent letters reminding legislators what is important to architects both to the House Armed Services Committee on its own and as part of a coalition, as well as to the House Oversight and Government Reform Committee, but we need your voice. Click here to email your member of Congress to tell them how design-build reform impacts you or tweet at your legislator with #reformdb.

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AIA Position

The American Institute of Architects (AIA) urges Congress to update federal design-build laws to ensure that more small design firms can take part. The AIA strongly opposes any legislative or administrative effort to weaken or limit application of the Brooks Act and advocates upholding the provision of the U.S. Code that requires federal procurement of architecture and engineering services to be negotiated with the “highest qualified firm” rather than be awarded to the lowest bidder.

In particular, the AIA urges Congress to update 41 U.S.C.§3309 and 10 U.S.C.§2305a(d) to limit the number of firms who can compete for design-build projects to a group of three to five teams and to oppose any legislative or administrative effort to increase the number of firms who are “short-listed” in the final federal design process.

Background

Design-Build is a type of design and construction process where architects, engineers, constructors, and sub-contractors team together to submit bids on design and construction. Typically, the selection process is a two-step method. In the first step, agencies review the qualifications of the participants. In the second step of the process, short-listed teams develop a bid for a design-build project. Under law, there is a maximum of five teams that can be short-listed. However there is a broad exception which allows agencies to allow more finalists to the project.

The cost of competing is high for architects in design-build. An architecture firm must provide detailed plans and schematics so that the general contractor can get accurate pricing from the subcontractors. Accurate pricing is the key to making a winning and profitable bid, so the level of work required of architects is extremely high. The risk is also high, as there are no guarantees that the team will win the contract. Data shows that architecture firms spend approximately $260,000 to participate in a design-build competition; some firms report that they have spent over $1 million on large federal projects to compete. The benefit to the winning team is high, but when there are a large number of competitors, the chances of winning are low.

Architecture firms are reporting that in recent years the average number of short-listed firms for federal design-build projects has grown. Industry best practice is to have three to five firms on the short list. Now, there are reports of as many as 10 firms on a short-list. When facing a choice of spending a quarter of a million dollars with only a 10-percent chance of winning, many design firms choose to sit out the process,

If lowering the number of competitors is not possible, then looking for potential stipends for all competitors to reduce their costs, is another alternative. Current surveys of architecture firms show that only 12.9 percent of federal competitions provide a stipend, while approximately 41 percent of higher education competitions provide stipends to firms. Even 22 percent of private sector owners provide stipends. The federal government is falling behind the standard set by the private sector and other non-governmental entities, resulting in fewer qualified firms seeking federal contracting work.

Architecture firms are small businesses—approximately 95 percent of U.S. firms employ less than 50 individuals. This makes design-build competitions a huge drain on limited resources. At a time when federal agencies have failed to reach their targets for small business participation in the past six years, it is incumbent on Congress to remove barriers that prevent small entrepreneurs from taking part.

Useful Links

AIA’s resource page on Government Procurement

U.S. Small Business Administration

House Subcommittee on Economic Development and Public Buildings

The Council on Federal Procurement of A/E Services

 

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