Best Practices – Why Your Design Build Contracts Are All Wrong!

Recently, I posted an article about the Cole Report which chronicled the failures of several public schools in London.

Cole reported that one of the causes for these failures was the use of design-build contracts that removed the Architect from the construction phase.

Design-build contracts are quite popular in certain parts of the world.  Owners frequently choose this method of delivery because they enjoy the simplicity of hiring a single consultant who takes responsibility for the design as well as the construction.  There is nothing inherently wrong with design-build, but problems arise when an owner selects the wrong lead consultant.

I don’t mean selecting an unqualified or inexperienced person or company, I mean selecting the wrong type of supplier to lead the project.

There are many companies that offer design-build delivery.  However, there are only certain types of suppliers who have the training and legal obligation to look after the Owner’s best interests.

To understand this better lets look at the four suppliers that could offer a design-build delivery.

Project Manager / Facilities Manager / Owner’s Agent

I have lumped these supplier types together because their roles, responsibilities, experience, and training tend to be the same.  Of course, there are differences in the education and background of specific individuals performing this work, but few will share the credentials of the other supplier profiles.

To simplify the discussion I will simply refer to these as Project Managers.

Project Managers generally have a construction background and often have work experience as general contractors, architects, or engineers.  They are often certified in project management methods but do not hold professional licenses.

Their certifications in project management grant them a special kind of credibility and skill at keeping all parties on task.  Unfortunately, the varied backgrounds and experience coupled with a lack of legal responsibility makes for an uncertain candidate for leading a design-build project.

Project Managers are great for keeping the project moving but an uncertain technical background and limited liability make them an uncertain option to lead a design build project.

Construction Managers / General Contractors (CM/GC)

Perhaps the most prevalent Consultant used to lead design build projects are construction managers and general contractors.

This class of supplier is characterized by a broad range of background and experience.  Many individuals in this profile have nothing more than a high school education or perhaps a trade background.  The full spectrum of education including Phd’s and professional degrees can be found here as well.

In order to deliver a design build project a GC/CM will subcontract an Architect to perform the design work.  This often means the Architect’s role is significantly reduced.

The strength and skill of the GC lies in sequencing and planning the various components of the work.  They carry a high financial burden and liabilities associated with safety and security of the job, but rarely are required to be licensed or certified.  GC/CM’s tend to be  hyper focused on cost because the less their costs are to build a project, the higher their margin.

CM/GC’s are essential for organizing and scheduling the work, but the various pressures and liabilities they have, the broad range of education levels, and the lack of certifications make them the worse choice to lead a design build project.  In fact, the failed projects referenced by Cole were delivered in this manner.

Architects / Engineers

In many parts of the world Architects take a lead role through the construction phase. They still perform design services, but when its time to begin construction, they carry on sequencing the work, selecting the trades, and overseeing the construction.  In fact they take on the role of general contractor.

For those in the United States and the United Kingdom this may seem like a foreign concept but throughout South America, Asia, and Europe, this is quite common. It may be surprising to hear that less than 100 years ago this was the way all projects were delivered everywhere in the world.

The emergence of general contractors who only perform construction work and Architects who only perform design work grew out of a desire from Architects wanting to focus only on design.  The resulting gap gave birth to a new class of supplier and new delivery models.

Despite a small movement within the Architecture profession to revert back to Architect led design build, the evolution of insurance needs (and the associated costs) have made re-entry into construction management a challenge for most firms.

Architects and Engineers are the only construction professionals required to be licensed and who have rigorous education requirements.  As such, for me in geographies where this model is prevalent, because of the higher standard Architects are required to follow, Architect led design build is a great option.

It is lamentful to recognize that in areas where this model is uncommon, decades of conditioning have probaby rendered most Architects incapable of effectively managing a project without a steep learning curve, so if your project is in such a place, this will not be an option for you.

Engineering Procurement and Construction Management (EPCM)

The fourth option for delivering design build projects is engaging a unique type of Supplier known as an EPCM.  EPCM stands for Engineering Procurement and Construction Management. These suppliers tend to be larger firms that offer the full range of construction services inclusive of Architecture and Engineering.

EPCM firms offer the benefits of Architect led design build together with the project management skills of a Project Manager and the construction skill of a Construction Manager.

Epcm firms are distinguished by having all of these services in-house.  Although these suppliers will offer either design or construction management as stand-alone services their greatest value is realized when they are engaged fully.

Because of the full range of in-house capabilities and the high level of skill and education within EPCM firms, this is by far the best supplier for design build projects.

Closing

There are many benefits to design build projects, but choosing the wrong lead consultant exposes you to more risks. Be sure to choose the best supplier available to you and you will be very happy with the results.

What about you? Have you done a design-build project? which supplier class did you choose to use? Tell me your stories.

Thanks for reading.  If you enjoyed this content, please feel free to browse my previous articles and please like, share, comment, and subscribe.  This helps promote my content and is greatly appreciated.

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