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AN INTRODUC TION TO DESIGN-BUILD

Introduction to
Design-Build
M an u a l o f P ractic e

The Number One Reference

Document for Professionals &
Students researching the basic
concepts and key elements of
the Design-Build Industry.
An Official DBIA
Manual of Practice Chapter

AN INTRODUC TION TO DESIGN-BUILD

Table of Contents
1 | Intro/Overview............................................................................3
2 | Benefits of Design-Build.............................................................5
3 | Who Uses Design-Build..............................................................6
4 | Design-Build Entity Selection......................................................7
5 | Contract Types.............................................................................8
6 | Owner Cautions..........................................................................9
7 | Summary..................................................................................11

AN INTRODUC TION TO DESIGN-BUILD

1.0 Introduction to
Design-Build Project
Delivery

esign-build is a method of project delivery in which the owner executes a single contract with one
entity (design-builder) to provide architectural/engineering services and construction services. Designbuild is also known as design-construct and single source or single responsibility.

By contrast, with the traditional design-bid-build approach, the owner commissions an architect or engineer to
prepare drawings and specifications under a design contract, and subsequently selects a construction contractor by
competitive bidding or negotiation.
When discussing project delivery methods, it is important to distinguish between delivery systems and other contractrelated trends and philosophies. Design-build, design-bid-build and construction management are the three project
delivery systems most commonly employed in North America. On the other hand, partnering and total quality
management (TQM), while excellent tools when appropriately applied, are not project delivery systems.
During the past decade, the use of and interest in design-build in the United States and Canada has greatly accelerated,
making the growth of this delivery method one of the most significant trends in the design and construction industry.
According to an American Institute of Architects (AIA) Practice Memo, Design-build is attracting a lot of attention,
because owners, including government agencies, are finding it attractive [for] complex and unusual projects, because it
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eliminates some of the major seams in getting a project built.

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In its recent study on design-build, the American Society of Civil Engineers (ASCE) reports that Design-build has
been used successfully on complex power plants and chemical process facilities and on simple straightforward office
buildings and family housing. In fact, states the ASCE report, there is no reason that design-build cannot be used on
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most types of construction projects, including traditional civil infrastructure projects.

1. American Institute of Architects, February 1994 Practice Memo What is Design-Build and Why Is Everyone
Talking About It, by Douglas E. Gordon, p. 14.
2. American Society of Civil Engineers, Design Build in the Federal Sector, Washington, D.C. 1992, p.11.

AIA, ASCE and others cite a number of reasons why owners and the design and construction community are
considering design-build. Primary among these are:
Owner-driven demands for better quality and continuous improvement in project delivery and
in the final product;
Interest in saving time and money, through a process wherein budget, schedule and
constructability are key concerns from the outset;
Desire to avoid the legal entanglements of adversarial relationships; and to reap the advantages
of a cooperative effort by all parties united under a single contract;
Need to realign the responsibilities and risks on a project, by dividing responsibilities/risks
according to the party most capable of managing those risks;
Response to the restructuring of American business and government and the increased influence
of global markets/foreign competition.

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Design-Build project delivery should not be viewed as the most effective delivery system for every project, however.
Traditional methods provide clear advantages in many situations.

2.0 What are the Benefits of

Design-Build?

The benefits of a well-designed and -managed design-build process include the following:

Singular Responsibility. With both design and construction in the hands of a single entity, there is a
single point of responsibility for quality, cost and schedule adherence. The design-builder is responsible for quality,
budget and schedule, and performance of the completed facility. Conflicts between design and construction are the
design-builders responsibility, not the owners. With design-build, the owner is able to focus on definition of needs
(scope of work) and timely decision-making, rather than on coordination between designer and builder.

Quality. The singularized responsibility inherent in design-build is a powerful quality motivator. Because
the design-builder is solely responsible for the completed product, and cannot shift responsibility for defects to another
party, he is motivated to build in quality throughout the design and construction process. Traditional design-bid-build
often relies upon restrictive contract language, adversarial audit and inspection, and the legal system to ensure project
quality.

Cost Savings. Design and construction personnel, working and communicating as a team, evaluate
alternative designs, materials and methods efficiently and accurately. Value engineering and constructability are
utilized continuously and more effectively when the designers, contractors
and vendors work as one during the entire design and construction process.

Time Savings. Because design and construction are overlapped,
and because bidding periods and redesign are eliminated, total design and
construction time can be significantly reduced. Design-build is ideal for the
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application of fast track construction techniques without associated risks to the owner. Materials and equipment
procurement and construction work can begin before construction documents are fully completed. The resulting time
savings translates into lower costs and earlier occupancy of the completed facility.

Reduced Administrative Burden. Although design-build can be resource-intensive during the early
phases of a project, the owner is not required, during actual design and construction, to coordinate and arbitrate
between separate design and construction contracts or resolve budget and schedule conflicts.

Early Knowledge of Firm Costs. Guaranteed construction costs are known much earlier in advance
compared to other delivery systems. The entity responsible for design is simultaneously estimating construction costs
and can accurately conceptualize the completed project at an early stage. Design-build can afford the owner one or
more go, no-go decision points during the design phases. The decision to proceed with the project is made with firm
knowledge of the final cost and scope.

The aggregate benefit of these advantages come at considerable risk to the design-builder but will generally
translate into far greater value to the owner than that traditionally available. Correspondingly, a design-builders reward
should reflect a portion of the greater risk assumed and value created.

3.0Who Uses Design-Build

Design-build is the project delivery system of choice on more than 40 percent of the non-residential
construction projects in the European Community and is used on more than 60 percent of the non-residential projects
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in Japan, according to recent industry authorities.

In the United States, use of design-build in the private sector has been
increasing in frequency and application during the past thirty years. Designbuild is being used in a wide array of commercial and institutional applications
including hospitals, educational facilities, office buildings, retail centers and
hotels. Design-build has also been used for decades in the industrial and power
sectors.
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In the U. S. public sector, the federal government, many states and local governments employ design-build
contracting for a significant percentage of their building programs. In the six years from 1986 to 1991, total use of
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design-build in the public and private sectors grew 172%, from $18 billion to $49 billion. In 1992, new awards of
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design-build contracts to the ENR top 400 contractors exceeded $80 billion, and in 1993, $71 billion. In the 12month period ended April 1996, publicly reported design build contract awards of $5 million or more increased by 103
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percent.
3. Brian Bowen, President, Hanscomb Associates, Inc., Design Build and Construction Management - International Trends,
Professional Design-Build Conference, October 21, 1994, Atlanta, Georgia.
4. Arthur Fox, ENR Editor Emeritus, DBIA Annual Meeting, Chicago, IL, October 12, 1993.
5. Engineering News Record, June 6, 1994, p. 27.
6. Engineering News Record, June 19, 1996, p. 34.

4.0 How Is A Design-Build

Entity Selected?

The methods for selecting a design-builder range from pure qualifications-based selection to pure pricebased selection, with many combinations in between. Qualifications-based selection or negotiation permits the early
involvement of the design-build entity with the owner in critical initial decisions while preserving the range of benefits
that design-build can provide.

On the other hand, public sector owners and some private owners may be prevented from using negotiated or
direct selection. The methods most commonly utilized by such owners have been competitive negotiation, cost/design
competitions, and pure price competition.

A summary of design-build selection methods follows:

Direct Selection. The design-builder is directly selected by the owner on the basis of such factors as
reputation, technical and managerial qualifications, past performance, and prior association. Direct selection is most
commonly utilized by private sector owners.
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Competitive Negotiation. A number of design-builders are prequalified or interviewed, with selection
based upon a combination of technical and managerial qualifications, references and past performance, preliminary
design solutions, fees to be charged, budget cost estimates, recent comparable costs, personnel to
be assigned to the project, and scheduling commitments. As with direct selection, the negotiated
source selection approach is most commonly utilized by private sector owners; however, major
federal agencies (such as General Services Administration, U. S. Army Corps of Engineers, U.S. Postal
Service) and many states are also adopting this method on certain projects.

Cost/Design Competitions. This method, also known as best value selection, is
perhaps the most widely used competitive approach. Proposors are shortlisted on a qualifications
basis. The owner issues technical criteria, to which each proposor responds with a qualitative
proposal and firm price. The owner establishes an evaluation system for qualitative features and for
price. The owner reviews each qualitative proposal, then price, and makes selection based upon best
value (combination of qualitative factors and price).

Cost Competitions. This method of evaluation most closely resembles the design-bid-build process. The
owners design concepts are developed to a highly detailed and prescriptive level in the Request for Proposals (RFP).
The selected firms role in design is more that of a detailer than conceptualizer. Proposals are evaluated as to whether
they meet the base criteria, and award is made to the low bidder. This process, which is not recommended by DBIA,
eliminates two of the most advantageous features of design-build competitions: multiple proposed design solutions
and innovation in the use of materials and systems. This approach can also lead to conflicts in design professional
responsibility.

5.0 WhatTypes of Contracts

are Used?

Depending upon project characteristics and selection method, numerous forms of contracts are used in
design-build. Among the most common are:
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For negotiated design-build engagements, the contract is typically a two-part arrangement.

The first part authorizes preliminary design, some design development and outline
specifications, all sufficient to determine final cost and to conceptually describe the project. The
second part completes the design and authorizes construction, and may include incentives,
targets, and savings clauses.

When best value selection is used, single part lump sum contracts are most commonly utilized
because price and scope are established during the competition process.
With increasing frequency, design-build entities are also offering project finance as apart of a
comprehensive package of services. This may take the form of design-build-lease, design-buildoperate, or design-build-interim finance.

Many variations of these basic approaches are available. Regardless of the type of design-build contract
chosen, it must be tailored to the needs of the owner and the project.

Since the Design-Builder assumes

the greater risk their contractual fee should
reflect such enhanced risk assumption

Because the design-builder usually assumes greater risk
(early fixing of price, warranty of performance, accuracy of drawings
and specifications) than does a contractor in traditional delivery
models, the design-builders contractual fee should reflect such enhanced risk assumption.

6.0 Caveats: Cautions for the

Owner

Complexity of the Process. Design-build project delivery requires careful planning and professional
execution to be successful. The owner should approach the design-build process mindful of factors such as the projects
complexity, funding, design intent, responsibility/risk allocation and other important issues.
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For owners who do not have in-house personnel with expertise in preparing and administering design-build
requests for proposals and contracts, two options should be considered for securing appropriate professional guidance
to assure proper project definition through the early phases. Under the first option, an owners design-build consultant
(sometimes called criteria professional) should be retained to prepare scope definition and RFP documents, and to
provide additional consulting services as needed. With the second option, the owner may use direct selection or
negotiation to bring the design-builder on board at project inception to assist in establishing project goals, scope and
definition.

Converting Owner Needs to Performance-Based Language. Preparing a statement of facility
requirements (sometimes called the design criteria package) that is comprehensive enough to assure compliance
by the offerors, but avoids restrictive details that would inhibit creative solutions, is the most challenging aspect of
preparing a design-build RFP. When facility requirements and quality standards are stated in performance terms and
related to recognized industry standards, the approach not only provides flexibility to the offerors in meeting the desired
objectives, but fixes responsibility upon the design-builder in clearly understood objective terms.

Potential For Conflict of Interest. There may exist the potential for conflict of interest between the
design-builder and the client, particularly since the design professional is often not in privity with the owner. However,
this can be minimized or eliminated by utilizing the practices recommended throughout the Manual of Practice,
particularly:
Alternatively, the engagement of the design-builder on a negotiated basis makes the designbuilder (including the design professional) the agent of the owner, with a professional
responsibility to represent the owners interest.
Articulation of the owners expectations in performance terms, and holding the design-builder
comprehensively responsible for meeting them, makes the design-builder solely responsible for
quality and performance of the completed product - which is a powerful incentive for quality
assurance in both design and construction.
Engaging an owners design-build consultant to represent the owner throughout the design and
construction process will provide an independent professional solely responsible to the client for
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general oversight, review, and approvals.

Prequalification and/or shortlisting of prospective design-builders will generally eliminate those
unfamiliar with the process, unqualified by reputation or experience, and lacking in quality
controls and methodology.

In the ultimate analysis, the reputation and integrity of the design-builder, as in any professional relationship,
is the best safeguard against conflict of interest.

Structuring Appropriate Rewards. Because the design-builder generally assumes more risk and delivers
greater value to the owner than a construction contractor under traditional delivery systems, professional fees tend to be
higher. However, a well-managed design-build process will provide the owner far greater incremental value than the cost
represented by such fees.

7.0 Summary

This document is intended as an introduction to the concept of design-build and the benefits it can provide. A
more thorough discussion of the details of implementing a design-build project or program can be found in DBIA companion
documents entitled:
The Design-Build Process Utilizing Competitive Selection, document number 201
The Design-Build Process Utilizing Negotiated Selection, document number 204

Design-Build Definitions, document number 102

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AN INTRODUC TION TO DESIGN-BUILD

DBIA Manual of Practice Document Number 101

An Introduction to Design-Build
Second Edition, November 2008 Design-Build Institute of America Washington, D.C.
Copyright 2008 by the Design-Build Institute of America. All rights reserved. Printed in the United States of America. No part of this publication may
be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise,
without the prior written permission of the DBIA.
This publication should not be understood to offer legal or other professional service. If legal advice or other expert assistance is required, the services of
a competent professional person should be sought.
Design-Build Institute of America 1100 H Street, NW, Suite 500, Washington, D.C. 20005 (202) 682-0110
First Edition, November 2008 Design-Build Institute of America Washington, D.C.
Design-Build Institute of America

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