Design-Build Firms VS Independent Architects & Contractors

[Milad Razavi]

Hi BP community! 

I have a plot of land that I am looking to do my first build (to sell). I just read through J's Diary of a New Construction Project, and am currently trying to figure out whether to begin the process with a Design-Build firm or to work with separate firms for whole process (architect & separate contractors for different respective jobs). 

From an initial standpoint, it seems to me that one of the benefits of the Design-Build firm would be a reduction in project management logistics & coordination, which would hopefully also lead to somewhat of a reduction in the unexpected costs that seem to occur due to miscommunication while coordinating various separate contractors. However I could also see Design-Build firms costing more due to their convenience, and because you'd miss out on the opportunity of getting multiple bids for every step of the journey. Maybe the antidote to that is to get multiple Design-Build firms to bid against each other at the onset? Perhaps all my assumptions here are incorrect from the get go, is there anything I'm missing? And how would you recommend proceeding? 

[Josh Cuthbertson]

I have been trying to get our firm to go the design/build route for years. Hard to teach an old dog new tricks, right?

Regardless, bidding multiple design/build firms at the outset is a great way to go. Don't be too concerned about the prices being higher in this venture because typically if a design/build firm has a good sub base of contractors they are giving really competitive pricing because they always have that firms work.

One advantage, that I really find of value, is that the design/build process keeps the contractors and architects on the same page. They both have incentive to work together. The more design-bid-build process immediately starts the two parties in an adversarial relationship. Them VS. Us.

One disadvantage to the design/build process is that A/E (Architecture / Engineering) fees can be deceiving. Most contractor led design/build firms say, "If you hire us, we'll throw in the A/E fees because we're building the project." Check this. Review their numbers. It isn't free, but they can hide it in their profit/overhead or general conditions numbers.

The other disadvantage (which may be advantageous to some) is cascading liability disappears in a design/build situation. I find it a disadvantage for the owner, because the design/build company insurance can be harder to pierce than would be in a typical design-bid-build situation should you need to go after one sub contractor.

All in all, both processes will work. But find out which situation best suits your needs. If you have time to project manage, then design-bid-build will be fine. If you don't, and want to hand over project management, then design/build maybe the solution.

Either way, reach out to me if you have more questions. I love talking construction delivery methods.

Good luck!