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Section I-7
Design-Build Delivery System

Design-Build is a method of project delivery in which one firm assumes the responsibility for both the design and the construction of a project. The one firm is known as the Design-Builder, Design-Build Contractor, Design-Build Entity or the Master Builder. This single entity delivery system is used to minimize the project risk for an Owner and to reduce the delivery schedule by overlapping the design phase and construction phase of a project. In this system, the design, permit, and construction schedules are all combined in order to streamline the process. The time it takes to complete the individual tasks of creating Construction Documents, acquiring building and other permits, or actually constructing the building are not reduced, but an environment is created where these tasks can be done concurrently rather than sequentially.

Typically, in a Design-Build project one entity takes the lead; if this entity is a Contractor, the process may be known as "Contractor-led Design-Build." If the entity is a design firm, the process may be known as "Design-led Design-Build." In either case, the organization employed by the Owner rarely handles both aspects of design and construction in-house. The Design-Build entity often subcontracts with construction personnel if design-led, or with Architects and Engineers if Contractor-led.

Potential Advantages of Design-Build
Among the chief advantages of the Design-Build delivery system are:

  • Schedule compression allowing for earlier occupancy;
  • Integrated solutions;
  • Single point of contact;
  • Focus on maximizing the value to the Owner.

It is important to note that the Design-Build method, while not focused on saving the Owner construction costs, can often save the Owner money on the overall project. An earlier occupancy date usually yields considerable overall profitability to the project and may make seemingly unfeasible projects into genuine opportunities. The schedule compression is an important aspect of the implementation of this system.

Rather than a distributed level of responsibility, as is customary of the classic Design-Bid-Build, Design-Build provides an integrated solution for the Owner. This moves projects away from the adversarial relationships between the Owner, Design Professional, and Contractor that are often commonplace in traditional delivery systems.

Instead of having several contractors and consultants, an Owner only has one entity to deal with. Design revisions, project feedback, budgeting, permitting, construction issues, change orders, and billing can all be routed through the Design-Build entity. This single point of contact allows a certain degree of flexibility for the Owner. Most Design-Builders will leverage that flexibility for the Owner's benefit by continually refining the construction schedule to maximize the Owner's value at the completion of the project.

Typically, in order for a Contractor to bid on a project, very specific details relating to the methods and materials must be given to avoid any ambiguity and to allow for an equitable comparison of bids. In a Design-Build context, the Owner, the Owner's other consultants, and the Design-Builder can work together to determine what methods and materials will maximize the Owner's value. In instances where marginally more expensive materials, designs, or construction methods might yield a higher return on investment for the Owner than those of lower cost, the Owner is free to adjust the project's program without having to re-bid the entire project.

Potential Disadvantages of Design-Build
Potential problems of the design-build process include:

  • Premature cost estimating;
  • Short-cut design process;
  • Decreased accountability by the service provider;
  • The need to correct completed work.

Cost estimating for a Design-Build project is sometimes difficult because design documents are often preliminary and may change over the course of the project. As a result, Design-Build contracts are often written to allow for unexpected situations, and the price of the completed project may vary greatly from the original estimate. The uncertainty of the early estimate requires the Owner to rely a great deal on the integrity, acumen, and competence of the Design-Builder. As the certainty of estimate decreases, the reputation of the Design-Build firm becomes more important. Estimates should be accurate, and reasonably verifiable in order to minimize risk.

The short-cut design process may restrict regulatory review efforts to a potentially cursory overview. Projects may be designed as they are built, thus providing those with the responsibility of oversight little to no time at all to review completed plans and specifications. Projects completed before they may be reviewed can be forced into costly change orders to bring the project into compliance with regulatory requirements. The short-cut design process may also create an ill-defined scope of the work. Since the purpose of the design documents is to describe the project's desired outcome, an abbreviated design process can result in leaving out some details of the quality, workmanship, and/or desired aesthetic attributes of the project, thus making it impossible to hold the builder accountable for the desired level of quality.

The Design-Builder is given a great deal of control over the entire process of both how the project is configured, and how it is completed. With no third-party observer such as an independent architect to administer the process, the unscrupulous Design-Builder may sacrifice the quality of materials and systems such as HVAC, lighting, plumbing, and even structural elements in order to pad his own profits at the expense of the Owner.

Since the Owner may not have the expertise to evaluate the quality of portions of the work, the Owner must trust the Design-Builder to properly design a facility that will meet its needs, and to execute the design properly, according to codes, and consistent with industry-standard specifications. Unless the Builder agrees with the Owner's assessment of the situation, the Owner may have no means to insist on correction of work done improperly but to go to some form of formal dispute resolution such as litigation, or arbitration. To avoid this issue, it may be beneficial for an Owner to consider utilizing a third party consultant to assure that the Owner's needs are met - this point is especially important in instances when an Owner inexperienced in the Design-Build process is involved.

In exchange for the ability to save money, the Owner assumes the risk and responsibility to review contract documents, such as plans, specifications, and agreements for services, and to hold the Design-Builder accountable to design and deliver a quality product. By contrast, under the typical Design-Bid-Build or Negotiated Bid delivery systems, the Design Professional is in a better position to reject work not performed according to the Contract Documents.

Several organizations, such as the Design Build Institute of America, provide standardized form contracts for Design-Builders to use, but it is not unusual for the Design-Builder to provide its own contractual documents. The American Institute of Architects warns that when non-standard documents are used, great caution should be exercised because they may be untested, or may be written to favor one party or the other; Therefore, qualified legal council should be employed to review all contracts before signing.

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TAGS: Change Orders, Design-Bid-Build, Design-Build, and Design Build Institute of America.

Glossary Terms for the Best Practices Guide

History of Recommendation:
Amended November, 2011
Amended July, 2010
Approved March, 1995
Revised Oct. 25, 1995 I-1

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