"The problem with stipends—when they're offered, which isn't often enough—is that they're far less than the [proposal] expenses that teams incur," says Trey Nobles, vice president and district manager with PCL Construction Services Inc., Denver. "That's why we go after two-step projects, or a very few single-step jobs we are highly confident about getting. The expense is great in either case, but we're far more willing to invest in a 25% chance of winning rather than a 10% chance."

Lea says proposal stipends are "infrequently used" on Corps' projects and only on a case-by-case basis, depending upon the amount of competition for a job. The new guidelines will not change that policy.

For designers, the risks are higher because the cost-to-profit ratios are even thinner. "We can spend on proposal costs close to what the total profit margin on the entire job would be, if we get the job in the first place," says Bill Green, president of The RMH Group, a mechanical-electrical engineering firm in Lakewood, Colo.

Green also argues that single-step works against the collaborative intent of design-build, and as with the subcontractors, it forces designers to be less effective as team members if they are proposing with more than one team on a project. Green estimates that his firm has spent more than $100,000 on single-step proposals in the past year, with only limited success. "That's our break-even on costs," he says.

Best Practices

DBIA has taken a firm stand against the Corps' use of single-step competitions because they stray far from the association's best practices.

"They shouldn't even call it design-build under these circumstances because it defeats the purpose," says Lisa Washington, DBIA executive director in Washington, D.C. "More creativity at less cost is the real intent of design-build." DBIA advocates a two-step process with three firms—not four or five—selected for short lists, performance-based rather than prescriptive requirements and payment of meaningful stipends. Washington says that DBIA isn't singling out the Corps on these issues. The association wants to work with all owners to clear up what it believes is misuse of design-build.

"Some (owners) say single-step is faster—it isn't—or that a low-bid number up front offers them best value—it doesn't," she adds. DBIA says design-build is now used on 40% of all projects built in the U.S., so the goal is to get people to use it correctly.

The Corps, meanwhile, says it won't abandon single-step proposals anytime soon. "We agree with the industry that single-step isn't ideal and it can diminish some design-build advantages—even approaching a low-bid scenario at times," Lea says. "But single-step is also appropriate, and we will continue to use it."

He adds that the Corps' new guidelines should address many industry concerns. "We have not moved away from two-step design-build or best practices, and we feel that none of this will be an issue going forward," Lea says.

However, design-build proponents say they are taking a wait-and-see attitude.

Quick Take

U.S. Army Corps of Engineers

441 G St. NW, Washington, D.C. cMD. engineer: Lt. Gen. Thomas Bostick

U.S. divisions: 9

Founded: 1794

what it does: The agency bid out more than $40 billion in 2011 and completed over 100,000 contracts. Key accomplishments included completing projects associated with the Army Base Realignment and Closure 2005 program, the Hurricane and Storm Damage Risk Reduction System in New Orleans and the American Recovery & Reinvestment Act, among others.