Skip to content

Design-build construction & what it means for subcontractors

Picture of a slding wooden door | Design & Build | Knowify

It’s no secret that design-build construction has been increasing in popularity in the last few years. A recent study found that 58% of owners intend to use design-build as opposed to using traditional design-bid-build systems. Design-build is no longer the alternative; increasingly becoming the preferred delivery system amongst builders. In fact, 44% of construction dollars will be spent on design-build projects throughout the US in the coming year. This comes as no surprise, as the same study found that when looking at the causes of rework on projects, up to 70% of rework is the result of design-induced flaws.

This article will look at what design-build is, how it operates, and what it means for subcontractors.

What is construction design-build?

Design-build construction is a delivery system in which the same firm (comprising of architects, engineers, general contractors, and specialty contractors) provides planning, design, and construction services as one entity. Traditionally the design and execution of a project are handled separately with multiple contracts. With design-build, the designer and builder form a single entity under one contract, thus allowing for a single source of responsibility. Consequently, the risk for every aspect of a build is also held by this single firm.

Why undergo a project in such a way? Utilizing design-build in construction projects aims to reduce the risk of delays and cost overruns.

How does a design-build project work?

Design-build projects typically adhere to the following four steps:

Diagram displaying the four steps of construction | Design & Build | Knowify

Step 1 – Pre-construction & project brief

The design-build team, in collaboration with the owner, will develop a project brief to kick start the project. The project brief is an opportunity to discuss needs, wants, specifications, and budget requirements. From here, milestones, timelines, and budget details are negotiated to ensure all parties are on the same page. Once in agreement, a contract is drafted, including a  scope of work, outlining precise payment details. All expectations will be presented in the contract, resulting in a carefully crafted plan that can be followed; from the initial planning meeting through the end of construction.

Finally, the success of a design-build project hinges on the merits of the team that will execute the project. The early stages will see the hiring of builders, architects, and engineers. From there, contractors will onboard as needed, either by a general contractor or the owner. This team will then unite on a single contract to form a single design-build entity. Rather than aiming to execute just your specific tasks, overall project success becomes everyone’s primary objective.

Step 2 – Project planning & design

Project planning involves the design-build team working together to match the project’s vision to the budget. This step will see the development of preliminary drawings, cost estimates, schedules, and site visits. Collaboration between the architects, engineers, and contractors is paramount here. Input from all stakeholders, from the ground crew to the lead architect, will ensure all parties involved are working as one team with one goal – delivering quality results in a cost-efficient manner.

It’s also necessary to explore how a GMP (guaranteed maximum price) works into the equation. A builder team may want to include subcontractor bids with a GMP to keep the project competitive and to control costs. If costs do go over, it’s on the design-build team to cover the costs and not the owner.

Step 3 – Construction

Considering much of the leg work on planning has already been completed, the construction phase, in theory, can move forward as a streamlined process. Of course, if something can go wrong, it will. Unforeseen complications are inevitable. But, design-build projects are formulated to reduce the number of change orders needed. This is of great importance, as 35% of all construction projects experience major changes. Design-build aims to account for significant changes early in the process ahead of construction. It does this through a single team that can communicate from the ground—allowing for issues to be accounted for well before actual construction begins. This helps reduce the odds of rework that could result in costly project delays.

Step 4 – Post-construction

An excellent design-build team will incorporate a hand-off process, in which the team will transition the project over to the owner. This includes a walk-through, time to answer questions, and any necessary training. This ensures the owner has the information and instruction needed to maintain the final product once construction has ended.

What are the advantages of design-build?

Design-build’s main advantage is its potential to lower the total cost of projects. As mentioned earlier, all parties involved agree on a price early in the process, which tends to reduce change orders. This, in theory will lower total costs as a result of the project having less waste.

A considerable advantage from the customer’s perspective is knowing the price of the project upfront. Comparatively, on a plan and spec job, the owner will not know the cost of a job until the end of the project, when all change orders have been processed. Cost will inevitably fluctuate from the agreed-upon budget. This is significant in an industry where only 31% of projects come within 10% of the original budget. Owner transparency from the initial phases of the project can mitigate communication issues that often plague projects that lack collaboration.

Moving on to builder-related advantages, teamwork is reported as one of the most prominent benefits of the design-build system. A synergetic effort is fostered from input from all stakeholders involved. Field input is critical to the success of a design-build job. Assessment from subcontractors can carry more weight, improving the overall quality of the project. Working as one entity encourages an environment where all contributors can trust one another to march in the same direction.

To conclude, project speed has the potential to radically improve. Working as one entity can allow teams to get into the ground earlier, shortening the entire duration of the project. Work on one aspect of the project can start from a specialty contractor while engineers/architects are working on the details of another.

What does design-build mean for subcontractors?

Design-build benefits for general contractors and owners are clear – reduced costs, time savings, pooled resources, and a single contract. However, you may wonder if those benefits translate to your role as a subcontractor or specialty contractor. The truth is, it depends.

Much of the design process can be offloaded to subcontractors resulting in what may feel like extra work for no additional benefits. Many subcontractors may also feel that they are at the bottom of the chain of command, diminishing their bargaining power.

These are all fair concerns. Although you may feel at the bottom of the pecking order, the more you work on design-build projects, the more you will understand the nuances of how the system works. The more awareness you have, the less ambiguity there will be for the next project. Experience will propel you past the learning curve that comes with this system resulting in confidence that your opinions and voice matter.

That said, relationship building is where subcontractors can get the most out of the design-build process. Working on a tight-knit team allows for invaluable networking opportunities; if you can execute at a high level while getting your tasks done quickly, you can set yourself apart from competitors; establishing yourself as a top-tier specialist. Doing so goes a long way in generating additional leads for future projects with the same team.

In conclusion, a design-build project may not always be in your best interest as a subcontractor. If however, you have the opportunity to work in this system, the relationship-building potential is too significant to ignore.

Looking to stay one step ahead of market changes?

Many contractors are looking for new ways to adapt to rising fuel and material costs – so what can your contractor business do to adjust? We put together a quick guide with 4 tips you can use to fight back against rising costs, and increase your profit margin.

Cover of our e-book "Building success" displaying a picture of a construction site in black and white | Knowify

From tips on developing more accurate quotes, to ideas for managing your projects and improving customer satisfaction, use this guide to grow a healthier and more profitable business.