The Pros and Cons of Different Design-Build Project Variations

By Axis Marketing

working on plans on tabletop

Design-build continues to grow as a project delivery method of choice for project owners looking for a streamlined approach to designing and building their next project. Rather than having to deal with two primary points of contact (the contractor and the lead designer), the project owner chooses to have only a single point of contact. For the owner, this can greatly simplify the management of today’s complex construction sites.

There are different variations of design-build projects in terms of who takes the role of the Design-Builder. Here are the pros and cons of a few variations:


Lead Designer as Design-Builder

In this situation, the lead architect or engineer on the project contracts with the owner to be the design-builder and then hires the contractor, sub-consultants and possibly subcontractors.

The primary advantage of this approach is that he or she maintains direct contact with the project owner, which helps ensure that the project design meets the owner’s objectives. The design-builder directs the contractor and project subs to construct the project in general conformance with plans.

The major disadvantage of this approach is that the design-builder is liable for the actions of the contractor and all subs regarding construction means and methods, and job site safety. Most contracts governing the traditional design-bid-build project delivery method include specific clauses stating the designer is not liable for construction means and methods nor job site safety. But with designer-led design-build, because the designer has a direct contractual relationship with the contractor and oversees its activities, liability for job site activities is inherent.



A Third Entity (e.g. Construction Manager)

A second approach to design-build is to have a third-entity design-builder (who isn’t the lead designer or contractor) take on the role of design-builder. This may be a construction manager, a design firm hired solely to serve as the design-builder (but not the project lead designer), or a general contractor other than the contractor building the project.

An advantage to this third-entity approach for the lead designer is that there should be no added liability related to construction means and methods or job site safety. The third-party design-builder and the contractor will handle all decisions regarding construction means and methods on the job site.

A major disadvantage of this approach is the lead designer’s lack of direct interaction with the project owner. Working with a design-builder intermediary inevitably complicates communications and can lead to misunderstandings or gaps regarding client needs and design intent. You can design in accordance with the requirements specified by the design-builder, but the design-builder may not be accurately communicating the desires and expectations of the owner.



Joint Venture

In this design-build model, the lead designer and the contractor join to form a separate legal entity, often a joint venture. This new entity serves as the design-builder and primarily acts as the owner representative and conduit to the lead designer and contractor, which continue to operate as separate firms in their design and construction roles.

The advantage of this structure is that the lead designer and the contractor continue to have communication with the owner through the conduit of the joint-venture design-builder. Also, the union of the designer and contractor in the design-builder role should lead to a more harmonious, less adversarial relationship than normally found between lead designer and contractor.

The primary disadvantage of this technique is that the joint venture will have liability for construction means and methods and job site safety. Even if the contractor has agreed to assume those responsibilities via a contract with the designer, that contract only applies to those parties. If the owner has a dispute regarding either design errors or faulty construction, you can bet it will take a shotgun approach and file claims against all three entities: the joint venture, the contractor and the lead designer.



Find out more:

Download our free guidebook “7 Tips for Managing Risks on Design-Build Projects” to learn more about how to better manage risks on design-build projects:

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Tags: Professional & Financial Services

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