You’ve probably heard of the term “Design and Build,” also known as a D/B contract, but what exactly does it mean? Is it relevant to your construction project, and does it have a significant impact on the project’s outcomes?
Simply put, in a D/B contract, the contractor is responsible for designing and building the project from start to finish. In a traditional contract, the client, who is usually the project owner, delegates the duties of design conceptualization, project management, actual construction, and engineering services to various consultants or subcontractors. In a D/B contract, however, the contractor works directly with the client as the primary point of contact. Subcontractors and consultants, such as engineers, architects, and quantity surveyors, may then be hired by the contractor.
What Kinds of Projects Involve Design and Build Contracts?
Contrary to popular expectations, D/B projects aren’t just limited to large-scale mega or commercial projects. For a project to qualify as a D/B contract, the key criterion is that the contractor is tasked with coming up with the (re)design and construction of the structure. This could be a small residential building, substantial renovation works, a sizeable commercial project, or even a mega government project such as an expressway or railway.
Do D/B Contracts Offer Better Advantages Than Traditional Contracts?
The cost of a contract or a construction project may not necessarily be dictated by the type of contract, whether traditional or D/B. D/B contracts may offer slight cost advantages in terms of eliminating the external project manager hire costs. However, there are other tidy advantages to be gained from going the design-and-build route. The key advantage is that the contractor is responsible for all the key aspects of the project, including coordination. Hence, for a particular type of project, an experienced contractor can choose the best, likely the cheapest, and the most synergic team of consultants including architects, engineers, and sub-contractors. Having an experienced contractor for a D/B contractor gives you as the client the upper hand when it comes to anticipating future problems with the contract.
Time savings are another critical advantage of D/B contracts. Unlike a traditional contract where the Project Manager might need extra time and effort to coordinate the entire team, a D/B contract moves faster because the contractor can implement group decisions quickly. Complaints can also be escalated quickly and there won’t be any shifting of blame around if mistakes happen.
What are some risks of Design and Build Contracts?
The biggest risk of a D/B contract emanates from the fact that the contractor, whilst they may be great at building, might not be equally good at coordination and team management. Thus, unless the contractor is an experienced firm that offers these integrated D/B services, one might choose to go for an experienced project manager to coordinate the rest of the operation. If, for example, your contractor isn’t well-versed in the legal aspects of contracts or elements such as project financing, the disadvantage may end up costing you.
With an inexperienced contractor coordinating your building project, final costs might end up escalating if the project planning wasn’t done correctly. For contractors who don’t offer integrated design and construction services covering architectural, engineering, and project management, some elements of the final construction might end up unlike expected.
Can You Use D/B Contracts for Small Construction Projects?
For small construction projects such as residential building and remodeling, a D/B contract may certainly be a great solution, since the client will be hands-on with the contractor. Thus, as a client, you will always be up-to-date on what needs to be done. For example, if there are alterations to the design on-site that may be due to an unanticipated site condition, the contractor can quickly make the justification to the client and have the issue resolved or any approvals done quickly.
