"Design Build. What is It?"  by Lincoln Moss, Ramtech Building Systems

Over the past couple of years, the phrase "design build" has been much used in the construction industry. By the nature of modular construction, either wittingly or unwittingly, our industry has participated in the design build process for many years. This was due primarily to owners and architects not being familiar enough with our product to execute complete design packages reflecting modular construction. As design build has grown in popularity, the bar has been raised for expectation and greater a definition of responsibilities assigned. This article briefly discusses design build and explains what it is.

The design build process is one of several processes referred to as a delivery system, or a means of defining roles and executing the project. Design build means that the owner contracts with a single company that is responsible for the building's design and construction.

There are several project delivery systems. The most traditional delivery system is design bid build. This is where the owner enlists the services of an architectural and engineering firm to execute the design, then takes those designs and goes out for bid. The award for construction is issued to a general contractor or multiple prime contractors typically based upon price and reputation of the contractor(s). In design bid build, there are several variants involving construction management. Construction management is the review and inspection of the construction process that assures compliance with the initial design.

Construction management agency and construction management at risk are examples of the variants mentioned. For the sake of simplicity, we will assume that the architect will act in the role of construction manager with no financial risk (construction management agency).

As with construction types, there is no perfect project delivery system. There are some advantages and disadvantages to both of these delivery systems that we will discuss.

The immediate advantage to design build is the direct line of communication between owner and the designer/builder. Since these are one and the same, there should be little or no interpretation errors associated with the owners requests. Typically design build projects allows for "fast-tracking" of the job. This is where the contractor is released to commence a portion of the actual work while other aspects of the project are still in the design phase. In addition to communication and speed, costs are much easier to control in a design build environment since the designs are reflective of the construction means and methods of the contractor.

The downside to design build is an increased workload upon the owner. In this arrangement, typically the owner plays a more active role in design and construction decisions. Another area of concern is publicly funded projects.

Typically public funds are spent with the lowest bidder only. This normally precludes letting design and construction contracts to the same entity. With the concept of design build becoming more popular as a project delivery system, many existing laws addressing public funded projects are under review and will probably be rescinded in the near future.

Design bid build as mentioned above is the oldest most traditional means of building a project. The advantage to design bid build is that the owner can greatly reduce their amount of involvement in the project (given a good relationship with the designer). Depending upon the architectural and engineering firm's skill and familiarity with the type of building, this delivery system can also render a lower initial project price.

The downside is increased project duration due to construction not commencing until 100% of the design work is complete and additional layers of communication between owner and builder. Unfortunately if the architectural and engineering firm is not familiar with the building type or current construction cost, project pricing can quickly get out of hand, rendering a higher initial cost that may exceed the owner's budget.

Design build requires that a company have strong in-house design capabilities and/or strategic partnership with an architectural and engineering Firm. For the most part, our industry has long had in-house design capabilities covering code compliant design of our buildings and all related systems. An area we have normally lacked expertise is civil design. This encompasses the improvements to the land that the building is to be sited upon. These improvements typically address drainage, utilities, paving and landscaping.

It may be necessary to form strategic partnerships with civil design firms before acting in the role of a design build company. Additionally, some states require all commercial construction or buildings over a certain square footage be sealed by an architect. As with the civil work, either in-house professionals or a partnership with an architect will be required.

Finally, the last item for consideration is the increased liability associated with total design and construction responsibility. Professional liability insurance or errors and omission insurance, as it is sometimes called, covers problems with the design that does not meet either an express or implied warranty with the owner. Due to the inherent serious nature of design problems, professional liability insurance is hard to qualify for and is very expensive. Also it is important to realize that unlike builder's risk, professional liability insurance coverage does not end when the project is completed. Three, five, and even ten year discovery periods are not uncommon.

From this short introduction, you can see that the design build process may make sense as a strategic means to market and operate your business. This is particularly applicable to integrated companies. One thing to keep in mind, though, as the design build process gains momentum, there are many steps necessary before taking advantage of this exciting change in the construction landscape.
 

Lincoln Moss of Ramtech Building Systems in Mansfield, Texas is immediate past president of the Modular Building Institute.  He is also a recipient of MBI's Outstanding Achievement Award for his contributions to the commercial modular industry.