Design-build contracts

Dennis Brand, Traprain Consultants.

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Perhaps the best way of describing ‘design-build’ is to describe what it is not.
The traditional ‘design-bid-build’ method of construction is a sequential process in which the owner or developer first contracts with a design professional to prepare a concept or basic design, then a detailed design for construction. This includes specifications to solicit competitive bids for construction, and finally the award of a construction contract to the lowest bidder.

In ‘design-build’, one entity performs both design and construction under a single contract. Often the ‘design-build’ contract is awarded by some process other than competitive bidding; thus ‘design-build’ differs from traditional ‘design-bid-build’ in two ways. First, the design and construction components are packaged into a single contract and, second, the single contract is not necessarily awarded to the lowest bidder after competitive bidding.

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FEATURED COMMENT A good point regarding value engg. in DB but still it is not an easy procurement process to follow for public sector wor   2 Comments Read more comments »

POTENTIAL
Why ‘design-build’? ‘Design-build’ has the potential to reduce overall project costs because the ‘design-build’ contractor performing the design has a better feel and appreciation for the construction costs of the various alternatives, and can therefore produce a design that is less expensive to build and has an incentive to do so.

Another way to look at this advantage is that it moves value engineering from after contract award, with the contractor proposing cost-reduction ideas and sharing the savings with the owner, to pre-award (with the owner enjoying most of the cost-savings).

‘Design-build’ may result in earlier completion and occupancy of the project because there is no downtime between completion of design and start of construction. Furthermore, the ‘design-build’ contractor can begin construction of early phases of the project – for example, grading foundations, etc. – before design of later phases (building envelope, interior partitions, electrics, etc.) is complete. This process is sometimes referred to as ‘fast-track’.

It eliminates the traditional liability gap which one finds with the design being produced by the design professional under his contract and the contractor constructing the design under his construction contract. Design professionals can obtain insurance coverage only for professional liability insurance, which covers negligence, error and omissions, and virtually all design contracts limit the designer’s liability to this.

However, there can be non-negligent errors and omissions on the part of the designer which cost the owner money, but for which the designer is not liable. An example of this is where the designer undertakes reasonable subsurface investigations, but fails to detect a rocky outcrop that will require additional work on the part of the construction contractor.