Construction Project Delivery Methods Used in Tennessee
Project delivery methods define the contractual and organizational structure governing how design, construction, and risk are allocated among owners, designers, and contractors. In Tennessee, both public and private projects select from a defined set of delivery frameworks, each carrying distinct implications for procurement law, scheduling, cost control, and liability. Understanding these structures is foundational for any entity operating in Tennessee's commercial construction sectors or bidding on public construction procurement.
Definition and scope
A project delivery method is the legal and procedural framework that determines which parties hold contracts with the project owner, in what sequence design and construction activities occur, and how financial risk is distributed across the project lifecycle. The Tennessee Code Annotated (TCA) governs procurement of public construction services, with Title 12, Chapter 4 establishing competitive bidding requirements for most state-funded projects. The Tennessee Department of Transportation (TDOT) applies its own procurement overlays for highway and infrastructure work under federal funding requirements administered through the Federal Highway Administration (FHWA).
Three primary delivery models dominate Tennessee construction: Design-Bid-Build (DBB), Design-Build (DB), and Construction Manager at Risk (CMAR). A fourth model, Integrated Project Delivery (IPD), appears on a smaller subset of complex institutional projects. Each model differs fundamentally in when the contractor enters the project, how design liability is allocated, and whether a single contract or multiple contracts bind the parties to the owner.
Scope coverage and limitations: This page addresses delivery method frameworks as they operate under Tennessee state law and standard commercial practice within Tennessee's borders. Federal acquisition regulations (FAR), which govern federally contracted construction on military installations or GSA-managed properties within Tennessee, are not covered here. Locally adopted municipal procurement variations — such as those in Nashville-Davidson County or Memphis — may impose supplemental procedural requirements beyond state minimums and fall outside the scope of this page.
How it works
Each delivery method follows a distinct contractual and sequential structure:
Design-Bid-Build (DBB)
1. The owner retains a licensed architect or engineer to produce a complete set of construction documents.
2. The completed documents are publicly advertised for competitive bid (mandatory for most Tennessee public projects under TCA § 12-4-101).
3. The lowest responsive, responsible bidder is awarded a prime contract.
4. The contractor holds subcontracts; the owner holds separate contracts with the designer and the contractor.
5. Change orders address gaps between design intent and field conditions.
Design-Build (DB)
1. The owner defines the project through a Request for Qualifications (RFQ) and a Request for Proposals (RFP) that includes performance specifications.
2. A single entity — a design-build team — holds one contract covering both design and construction.
3. Design and construction phases may overlap, compressing schedule.
4. Risk for design errors shifts substantially to the design-builder rather than remaining with the owner.
The Tennessee General Assembly authorized expanded use of DB on state projects through enabling legislation, and TDOT has used DB procurement on major corridor projects. More detail on DB-specific contracting structures appears on the Tennessee design-build construction page.
Construction Manager at Risk (CMAR)
1. The owner selects a construction manager (CM) during early design based on qualifications and a fee.
2. The CM provides preconstruction services — cost estimating, constructability review, scheduling — while design proceeds.
3. At a defined milestone, the CM provides a Guaranteed Maximum Price (GMP).
4. The CM assumes contractor risk at GMP commitment; savings below GMP may be shared per contract terms.
Comparison — DBB vs. CMAR: In DBB, the contractor has zero input during design; design errors discovered during construction generate change orders that increase owner cost. In CMAR, the contractor-equivalent (the CM) participates in design review, reducing constructability errors before they reach the field. The tradeoff is that CMAR requires greater owner sophistication in managing an overlapping design-construction relationship and typically involves a negotiated rather than competitively bid price.
Common scenarios
- State highway projects administered by TDOT frequently use DBB for routine resurfacing and bridge replacement, while major interchange reconstructions may use DB to accelerate delivery. Tennessee highway and bridge construction work above a defined threshold must comply with TDOT's Standard Specifications for Road and Bridge Construction.
- Public school and university facilities in Tennessee have increasingly used CMAR, allowing educational institutions to maintain design control through the architect while gaining cost certainty from an early-engaged contractor.
- Private commercial development — office, industrial, and mixed-use — carries no statutory restriction on delivery method. Developers in the Nashville construction market and Knoxville construction market routinely use DB to compress time-to-occupancy on speculative industrial buildings.
- Healthcare facilities subject to Tennessee Department of Health facility review requirements often use CMAR because phased construction within occupied campuses demands intensive preconstruction planning.
Decision boundaries
Owners selecting a delivery method balance four primary variables: schedule compression need, design control priority, cost certainty timing, and internal contract management capacity.
| Factor | DBB | CMAR | Design-Build |
|---|---|---|---|
| Design control retained by owner | High | High | Moderate |
| Schedule compression potential | Low | Moderate | High |
| Cost certainty timing | Late (bid) | Mid (GMP) | Early (proposal) |
| Owner administrative complexity | Moderate | High | Low–Moderate |
Tennessee public owners operating under competitive bidding statutes have fewer choices by default: DBB remains the statutory baseline, and alternative methods require specific legislative authorization or agency procurement policy that permits their use. Tennessee construction contract law governs the enforceability of GMP provisions, design-builder indemnities, and related risk-transfer clauses under state common law and the TCA. Permitting and inspection obligations under the Tennessee construction permit process apply identically regardless of delivery method — the building official's authority is not altered by how design and construction contracts are structured.
References
- Tennessee Code Annotated, Title 12, Chapter 4 — State Purchasing
- Tennessee Department of Transportation (TDOT) — Procurement and Contracting
- Federal Highway Administration (FHWA) — Design-Build Contracting
- Tennessee Board for Licensing Contractors
- American Institute of Architects — Project Delivery Methods
- Design-Build Institute of America (DBIA) — Project Delivery Resources