Design-build construction is a project delivery method in which an owner signs a single contract that covers all aspects of design and construction. Unlike traditional construction delivery methods, which usually involve separate contracts with a design team and a construction team, design-build utilizes a single team that manages all aspects of the building process.
The design-build project delivery method has the advantage of streamlining communication between the architects, engineers, contractors, and subcontractors working on a project, and it potentially leads to cost savings as well. On the other hand, design-build construction can potentially stifle innovation and may require a more hands-on owner to reduce potential conflicts of interest.
Read on to learn exactly how design-build construction works, which projects benefit from this project delivery method, and the pros and cons of design-build for everyone involved in a construction project.
Design-build construction explained
Design-build construction is best understood as an alternative to design-bid-build, which is also referred to as the traditional project delivery method.
With design-bid-build construction—also called the “traditional method”—the owner will employ a firm consisting of architects and engineers to produce a building design. Afterwards, owners use a bidding process to allow general contractors to compete to produce the design in the most cost effective way. After the bidding process, the owner will have two main contracts: one with the design firm and another with a general contractor.
With design-build construction, on the other hand, a single entity is responsible for both the design and the construction of the building. As a result, the owner has a single construction contract that covers all aspects of the construction process.
Design-build construction contracts
Design-build uses one contract—typically the AIA 141—for all aspects of the design and construction of the project, creating one responsible party.
This method encourages efficiency by streamlining communication and by removing layers of process and bureaucracy from the process. As a result, it is cooperative by design and depends on one primary relationship for success.
Design-build involves the subcontractors in the design portion so that all work is familiar to them—and often informed by them—before they ever arrive at the jobsite.
Design-build management structures
The design-build process fuses the architects and engineers (A/E) and the builders into one entity. The structure of that entity—and the relationship of designers and builders—can take many forms. For example:
- A/E as employee: The design staff (architects, engineers, interior designers, etc.) are directly employed by the general contractor
- A/E as subcontractor: The general contractor has the prime contract with the owner and hires the A/E team as subcontractors
- Joint venture: The general contractor and the A/E firm establish a joint venture (one combined company) specific to the job to carry out the work as partners
Owners may choose one of the above structures based on a variety of factors, including their relationships with the parties, the scale and complexity of the work, and any requirements from responsible agencies, particularly in the public sector. And within those structures, there are two more variables in design-build contracts.
Either the contractor or the architect can take the lead in a design-build project, and which way it’s structured often depends on the specifics of the project.
- Contractor-led design-build: Typically used for projects where the contractor’s strengths are dominant, like infrastructure work, industrial construction, and manufacturing
- Architect-led design-build: Often used for projects that require very complex and nuanced design, such as hospitals, museums, and large-scale commercial buildings.
Both of these styles of design-build construction are common, and the owner ultimately decides which arrangement is most suitable for the project.
Examples of design-build construction projects
Though design-build has been on the rise for decades, its recent growth is significant. This is particularly true of large-scale and public projects such as manufacturing facilities, infrastructure projects, and industrial developments.
Recent projects like the 68,000 square foot John W. Walstrum Center for Advanced Manufacturing Technology in Lakewood, Washington, and the eight-mile West Lake Corridor addition to Chicago’s South Shore Rail Line (which has already seen a cost reduction of $110 million from its $665 million budget) are high-profile reminders of the trust that private and public bodies are placing trust in design-build.
According to a 2021 study by FMI consultants for the Design-Build Institute of America, design-build is expected to make up 47% of construction spending in the segments studied by 2025. The same report notes that design-build construction spending in the United States is estimated to top $800 billion by 2025.
Segment leaders in design-build
- Highway/street construction, responsible for 16% of DB contracts
- Educational construction, responsible for 15% of DB contracts
- Manufacturing construction, responsible for 13% of DB contracts
The growth is being driven, in part, by changes in the law. In recent years, states across the country have revised their procurement laws to allow for, and even encourage, design-build contracts in-state work for an expanding number of job types. To date, all but two US states allow design-build in at least some of their public works projects.
Pros and cons of design-build
As with any competing forms of procurement, there are upsides and downsides to each and the decision rests with the owner. The general downside for owners in design-build is that the architect and engineer no longer works directly for them, so the role of advocate now rests solely with the owners themselves. This leaves owners vulnerable to contractor conflicts of interest and adds to the work and attention required to properly supervise the work. The upside to owners is that the improved efficiency in the process typically leads to reduced costs, shortened construction timelines, and fewer disputes.
Pros of design-build construction
- One liable party: Conflicts are generally easier to resolve in all phases of the construction project.
- Efficiency: Streamlined communication and quick resolution of problems are possible due to the single point of contact for owners. Additionally, design-build projects can often be fast-tracked, allowing for the final design work to be done after construction has begun, reducing project time.
- Collaboration: Projects are often more collaborative since design-build tends to include everyone, including subcontractors and suppliers, in the process from the very beginning.
- Project costs: By involving the actual builders in the design phase, efficiencies are realized and cost-saving measures considered before the design is finalized.
- Fewer disputes: Design-build projects create fewer disputes on average than design-bid-build.
- Direct payment: By streamlining the payment process and keeping all pay requests and approvals under one roof, payment can be expected to be faster and more consistent on DB projects, reducing delays and disputes over payment, hopefully reducing the need for mechanics liens.
Cons of design-build construction
- Conflicts of interest: The contractor has a financial incentive to reduce costs and time that may be in conflict with the owner’s desire to have a higher-quality project.
- Less innovative design: Designers working for contractors are often discouraged from exploring new ideas and materials because it’s most efficient, always, for a contractor to go with what they know.
- Requires more engagement from the owner: Without an unbiased advocate in the architecture and engineering team, owners take on significantly more responsibility to manage the work and are far more reliant on the professionalism, skill, and integrity of the contractors they hire.
- No bidding restricts access for subs: For a subcontractor, it can be harder to get work if competitive bidding is removed from the process.
- Increased liability: Though all architecture and engineering professionals carry liability insurance, folding that work into the contract for construction can add additional liability for the general contractor.
Deciding between design-build and traditional project methods
Ultimately, design-build is not the answer for every construction project. Some of the questions an owner might ask include:
- Are the expected cost and time savings worth the extra attention required by an owner?
- Is the building type suited to tried-and-true construction methods and design?
- Does the project require highly specific design considerations or expertise only available from a specialty design firm?
- Can I find a design-build company that can be trusted with every aspect of this project?
Similarly, contractors and suppliers considering a design-build contract will want to review the past performance of the general contractor and the architect involved. Have they completed similar design-build projects in the past? Do they have a track record of good project management? And, perhaps the most important question at the end of the day, does the business have a history of mechanics liens or slow payment on their record?
For the many projects for which it’s suited, design-build has been proven to be efficient and cost-effective and to reduce construction claims and payment disputes.