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Design-Build vs Design-Bid-Build: 3 Reasons to Simplify Your Construction Process

Two contractors collaborate and contemplate over design plans

A building won’t stay up for long if it stands on a poorly laid foundation—which is to say that decisions made in the earliest stages of a project have enormous implications down the line.  

September 25, 2020 Liz Haagensen

Process is critical. It’s one of the first and most important questions we as construction professionals must ask: how will our work be done?  

There are many ways to go about it, but two of the industry’s most widely applied project delivery methods are known as design-bid-build and design-build. The popularity of the former one is on the decline while the other is on the rise. We’ll get to that in a moment. For now, let’s focus on defining them. 

They’re simplistic names to be sure, and the ideas behind them are just as they sound. For those unfamiliar, design-bid-build refers to the notion that a client hires a designer and then a builder for any given project, and that these two entities are separate from one another. For the most part, this is how the business of construction has been done traditionally in the US: A designer for the design and a builder to build it.  

Maybe you can already guess where this is going. The design-build school of thought holds that there is no need to contract with two separate firms, and that both the conceptual and construction elements of a project can be handled by a single entity. In other words, the designer and the builder are one and the same.  

A growing number of construction companies are shifting toward the more unified design-build philosophy of project development and away from the comparatively siloed approach of design-bid-build. In fact, the design-build process is expected to grow 18% by 2021 and exceed $320 billion in value, according to a 2018 study by the construction consultancy firm Fails Management Institute. The FMI study goes on to show that 58 percent of surveyed project owners have used or planned to use design-build in the last five years, while 32% believe that it’s more traditional counterpart is on the decline. 

Here are 3 of the reasons why design-build is on the rise and why you might consider adopting the design-build method for your construction enterprise. 

Design-Build Advantage #1: Fostering Collaboration 

The design-build method fosters a culture of collaboration.  

Owner-operator and subcontractor shake hands over design plans

Under this model, the architect and contractor are part of the same organization and work together as a team, from day one to finalization. Each party is aware of the priorities, capabilities, and limitations of the other and is able to more mindfully incorporate these factors into their work. Communication happens in real time. A shared vision is arrived at cooperatively, and any changes that need to occur can be adjusted for in the moment as opposed to after the fact.  

Not so with the traditional design-bid-build method. Here, the architect works out a design ahead of time and it’s the contractor’s job to interpret and enact that vision to the best of their ability at a later date. Rather than encouraging team cohesion, this more compartmentalized model can lead to factionalization—where the designer and builder each prioritize and safeguard their own pieces of the puzzle instead of focusing on the bigger picture together. 

Design-Build Advantage #2: Streamlining Efficiency 

With greater collaboration comes heightened efficiency.  

Two subcontractors discuss design plans displayed on tablet device

When the conceptual and construction elements of a project are worked out in tandem, the job gets done much faster and there is simply a lower likelihood of error. Having the two pertinent specialties aligned as part of a cohesive team speeds up construction and adds multiple layers of accountability that can prevent serious headaches in the future.  

For instance, an architect that doesn’t have a firm handle on the conditions under which their project will be built runs the risk of slowing work to a crawl due to an easily avoidable design flaw or misunderstanding with the contractor. The design-build approach anticipates and solves for precisely this situation. Having the designer and builder under one umbrella saves time by keeping everyone on the same page from beginning and middle to the end. 

It also saves time by reducing the need for bidding. Remember, instead of having to bid for two contracts—one for the designer and another for the builder—it’s only necessary to bid for a single contract using the design-build method. Which says nothing of the other agreements that typically get drawn up for subcontractors under the traditional design-bid-build model. With the design-build framework, none of those extra arrangements are necessary. 

Design-Build Advantage #3: Cost Savings 

Cost savings are built-in to the design-build method. According to a study conducted by the Design-Build Institute of America (DBIA), the design-build method can deliver a 6% cost savings on average while also delivering 12% faster construction speeds and 33% faster overall project delivery.  

Graphic depicts buildings with cost arrow pointing down indicating savings

The streamlined processes that emerge from tight collaboration and communication between designer and builder keep you from expending resources on extraneous work. Poor communication can lead to mistakes in the construction process that drive up the costs of materials and equipment. Fewer mistakes equals fewer change orders equals money in the bank.  

A collaborative culture also leads to the lower likelihood that costly disputes will arise between designer, builder, and client in the course of a project’s development. Litigation resulting from building defects or construction delays can put a serious dent in a company’s financial future and dry up other job opportunities on the horizon. As a faster, more transparent, and accountable system, design-build helps avoid these kinds of outcomes.  

What’s more, there are savings to be realized from having to associate with fewer companies in general. Rather than having to pay the contract and fees for separate architecture and contracting firms, you need only worry about the one bill. Contracting with a single design-build entity also means you will be spending less time on traveling between different offices and meetings, cutting back administrative and project management costs in addition to everything else. 

Simplifying the Process: Should You Adopt the Design-Build Method? 

As with many of the emerging trends we discuss here at Milwaukee Tool, whether or not you should adopt the design-build project delivery method depends a great deal on the particulars of your situation.  

Perhaps the most important factor is you. Switching to design-build could require a dramatic shift in mindset. Breaking from tradition, this relatively new approach represents a significant change in how construction professionals imagine and work on their projects. Remember, no building will stand long on a shaky foundation—which is to say that if sharing creative and decision-making power doesn’t sit well with you, or if you’re just more comfortable with the traditional methods of project delivery, then maybe the design-build approach isn’t the best fit.  

On the other hand, if you thrive in highly collaborative environments and are looking to improve how your work gets done, then design-build could be precisely the change you’re looking for. 

Consider, too, courses and certification do exist and are at available to you should you want to start building a leaner construction process into your playbook. 

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