Status of Design-Build in the US Water and Wastewater Sectors - Design-Build for Water and Wastewater Projects - page 24

STATUS OF DESIGN-BUILD BUSINESS
Although published data on the size of the alternative delivery business are not available,
the Water Design-Build Council (WDBC) estimates the business size in 2009 to have
been between $2 billion and $3 billion (WDBC 2010). This estimate accounts for public
water DB projects at the federal, state, and local levels, and it is believed that municipali-
ties account for approximately 90 percent of the overall business. The state government
portion of the business is negligible, and the federal business consists mainly of water and
wastewater facilities at Department of Defense bases. The federal business in 2008-2010
is substantial due to the Base Realignment and Closure (BRAC) Program, which included
several improvements to water and wastewater infrastructure.
To better gauge DB's growing popularity among municipalities, the consulting firm
R. W. Beck surveyed 85 randomly chosen municipalities, which serve more than 100,000
customers and found that 49 percent of the utilities had used some variation of DB (R. W.
Beck Inc. 2009). More details of this study are presented in chapter 8. The results show
that municipalities in the United States are considering DB for their projects.
To compensate for the limited data on DB projects for water and wastewater projects,
the WDBC, which is comprised of DB industry practitioners, also conducted a survey of
project information, including sales value data, from its members for projects completed
between 2005 and 2010. Sales value is the value of both the design and construction
portion of the DB project on the day the contract was signed, and in this evaluation, the
entire sales value was credited to the year in which the contract was signed. The total sales
value for DB projects of WDBC members for the five-year period from 2005 to 2010 was
$8.8 billion, with the sales value for 2009 and 2010 being $1.2 billion, with a decrease due
to the continuing recession. It should be noted that because the WDBC is not represented
by construction firms; the statistics do not include all the water DB projects in which a
construction firm served as the prime contractor.
Certain states currently dominate the DB business. As shown in Figure 3-1, the four
states that have the highest sales value for DB projects from 2005 to 2010 were Texas,
California, Arizona, and Florida. The top five states in 2009/2010 were California, Texas,
Washington, Arizona, and Florida. It should be noted that the use of DB in some of these
states decreased in 2009 and 2010 (Figure 3-2) because of the recession.
Discussions with North American owners suggest that the number of DB projects
will increase in the northeastern states in the future. The drivers in the northeast are con-
sent decrees, regulations, and aging infrastructure. The use of DB in the northwest (i.e.,
Oregon and Washington) is also expected to increase due to aging infrastructure.
It is apparent that owners who are able to use DB do so for many types of projects. The
WDBC data show that DB is used as much for water as it is for wastewater. In 2009/2010,
31 percent of the projects contracted by WDBC members were for water, while 27 percent
were for wastewater. Figure 3-3 shows the distribution of WDBC surveyed projects from
2005 through 2010, with 41 percent for water versus 36 percent for wastewater.
The survey also showed that DB is used for projects of all sizes. In 2009/2010, on
an average, 31 percent of surveyed projects were greater than $10 million, and 1 percent
were smaller than $500,000. Figure 3-4 shows the distribution of sales value of surveyed
projects from 2005 to 2010.