Through the years, the construction industry has gravitated toward alternative project delivery methods like CMAR and integrated project delivery. And one of the fastest-growing delivery methods is Design-Build construction. It is known to save money and make otherwise impossible timeframes more realistic and achievable, making it an easier sell to project owners.
But should you embrace the design-build delivery method as you expand your general contracting business? In this article, we’ll discuss the benefits and drawbacks of the Design-Build construction method and whether it is a viable alternative to traditional methods, like Design-Bid-Build.
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What is Design-Build Construction?
Design-build construction is a delivery method that involves a single contract between the owner and the builder. Unlike traditional construction contracts, which require two separate entities: a designer and a contractor, a Design-Build contract combines these two entities. Only one company is responsible for the design and building contract for a project, removing the bidding stage.
According to the “Design-Build Utilization” report, the DB method is becoming more popular, with over half or 58% of owners planning to use it in the coming years. Because of its advantages over the traditional DBB method, it’s now permitted for public agency projects in 43 states, including New York, Virginia, and Washington.
This delivery method is used all over the world because it aims to eliminate the complexity of multiple contracts and time-consuming processes done in the traditional project delivery method.
Advantages Of Design-Build Construction
Faster delivery: Under the Design-Build method, the bidding phase is removed, and design and construction happen concurrently, resulting in faster project completion.
Smooth process: The single-source of responsibility eliminates the blame game, making conflicts easier to resolve.
Better collaboration: Because professionals collaborate in a single team, changes are addressed and communicated quickly, resulting in fewer change orders.
Cost savings: Because the actual builders are involved in the design phase, all ideas are brought to the table, ensuring prudent use of materials, a cost-effective construction process, and timely completion.
Accuracy: Project budget is established from the start, resulting in more accurate construction, reduced cost, as well as avoiding last-minute surprises.
When Design-Build Worked Best
The major benefits of Design-Build construction include streamlined communication between the contractor, subcontractors and owner, faster project completion, increased collaboration, and cost savings. As a result, DB may be appropriate for large and complex projects that require the best and quickest turnaround.
Highway and Bridge Construction
The Design-Build method is ideal for highway and bridge construction, particularly after natural disasters such as floods, hurricanes, and tornadoes, which can paralyze and distress communities. The method was proven effective when the I-35W Mississippi River Bridge collapsed on August 1, 2007. The bridge was reopened in just over a year. The Minnesota Department of Transportation saved time and avoided $400,000 in lost revenue by overlapping design and construction.
Libraries, Hospitals, and Other Public Buildings
During the design phase, some Design-Build contractors provide pre-construction services such as budgeting, value engineering, and scheduling, among other things. This approach frequently allows construction to begin before the design is completed, fast-tracking the project. Johnson County, Kan.’s emergency communication center was an example of a quick turnaround project. It can withstand an F4 tornado and has electrical and mechanical systems that can run for up to four days. It was completed seven months ahead of schedule, thanks to Design-Build construction.
When Design-Build Should Be Avoided
While this delivery method has many advantages, it is not suitable for all projects. Under DB, there could be substantial losses due to improper risk allocations. Design-Build firms limited or ended their services in specific projects due to significant losses, such as Granite Construction Inc. They announced substantial quarterly losses from fixed-price Design-Build projects forcing them to change their business strategies.
SNC-Lavalin Group also suffered losses and has stopped bidding on lump-sum construction projects. Therefore, taking note of what can be encountered can help you, as a contractor, know when to use it and when not to.
Risk Shifts To The Design-Build Team
If there are mistakes during the design or construction process, they should be resolved by the Design-Build team rather than the owner, making the firm liable for any miscalculations or delays. This puts your finances at risk because you, as the contractor, absorb the budget overages from construction reworks rather than the client. If you’re a contractor whose primary experience has been in the traditional delivery method, the single point of responsibility can be a challenge.
Owner Is Unfamiliar With Design-Build Practices
It is also not good to proceed with a design-build project if the owner is unfamiliar with Design-Build practices. Contractors are chosen using this method based on their qualifications, capabilities, experience, and price, avoiding some pitfalls associated with contract awards based solely on low prices. If the owner doesn’t understand this, it will lead to problems during the construction process.
If you offer a Design-Build service, there may be ambiguous roles, especially if everyone works in-house and the entire company is responsible for the whole output. This may lead to scope creep, in which people do more than they are supposed to. As a result, your contracts must include specific descriptions that are not open to interpretation, as well as clear objectives and requirements, methodologies, and payment processes.
Contract Wording Problems
It is preferable to be as specific as possible when negotiating a Design-Build contract. When the language used in your contracts is ambiguous, it can cause problems. It may also limit your ability to use your insurance and warranty. Warranties and insurance can help general contractors deal with challenges, but gaps and ambiguity in contracts can make them difficult to use.
Best Practices for GCs When Collaborating with the Design Team
Here are some best practices for general contractors when working with the design team to ensure a successful Design-Build project.
- Involvement of Key Players- Everyone involved in the planning and decision-making process, including the owner, architects, engineers, contractors, and subcontractors, must be kept informed and have a say. This will help everyone develop a strategy for dealing with any issues that may arise.
- Open Lines of Communication- Regardless of the organization’s hierarchy, making everyone feel as if their opinions are valued will ensure that information flows both ways. When employees in the lower bracket can speak up, it may also lead to more project solutions.
- Build Good Relationships- Socializing outside of work and playing team-building games could help team members form strong bonds. Strong relationships in the workplace can reduce workplace loneliness and stress, resulting in increased productivity and employee satisfaction.
- Analyze Present Data- You can use completed projects to assess a team’s strengths and weaknesses and use them to improve construction and reduce inefficiencies.
In general, the ability of the team to function as one body is the key to good collaboration. That means information flows in a two-way direction, no one is left behind, and key players and decision-makers are capable of leading and making decisions. Without these, it is difficult to complete a project efficiently.