Discussion on the advantages and disadvantages of the

Design and Build Procurement Method for Standard

Construction Projects.

By

Sergio Faria: D22124756

This Report is submitted in partial fulfilment of the requirements of the the Masters in Quantity
Surveying (TU 223)of the Dublin Institute of Technology

13/11/2017

Supervisor: Mr Tony Cunningham

School of Surveying and Construction Management
Contents
Contents ......................................................................................................................... 2
Introduction .................................................................................................................... 3
1.1 Design Build – Concept ........................................................................................... 4
1.2 The Characteristics of Design and Build ............................................................. 4
2.1 Advantages & Disadvantages .................................................................................. 6
3.1 Implementation ........................................................................................................ 8
Conclusion ..................................................................................................................... 9
Bibliography ................................................................................................................ 11

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Introduction
The purpose of this report is to discuss the concept of the Design and Build
procurement method on typical projects with a focus and advantages and disadvantages
compared to the traditional procurement route.
The procedure that customers utilize to start and complete construction projects is
generally referred to as procurement. This procedure entails the selection of a legal
framework that expressly outlines the structure of obligations and participation roles for
parties involved in the construction process. The selection of the most appropriated
method it will be obviously varies with the type of project, time required, level of clients
involvement, Risk level that the client are willing to take it and many others.
There are many categories of procurement and subcategories designed to suit differente
projects. The most commonly are the traditional method, Design and Build and management
contracting. For the purpose of this report the discussion will focus in the Design and build
approach highlighting the differences from the traditional Method

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1.1 Design Build – Concept
The procurement technique known as "Design and Build" comprises the contractor
performing the job, including the design work as well as the building and completion of
the work. It is a type of building procurement where the project is designed and built by
the contractor. In a design-and-build agreement, a single company, typically a contractor,
is in charge of both the design, either entirely or in part, and the building and completion
of the project.
The main idea on this method is to have a main point of contact and responsibility trough
the project. A Survey

The main concept is single point responsibility, although Design and Build projects can
vary depending on the level of design responsibility given to the contractor.
A survey by the Design Build Foundation, published in the Egan Report, illustrates the
reason why this approach is often favoured by clients over traditional procurement
methods as:
 Clients want greater value from their buildings by achieving a clearer focus on
meeting functional business needs;
 Clients’ immediate priorities are to reduce capital costs and improve the quality
of new buildings;
 Clients believe that a longer-term, more important issue is reducing running-
costs and improving the standard of existing buildings; and
 Clients believe that significant value improvement and cost reduction can be
gained by the integration of design and construction (Egan 1998)

1.2 The Characteristics of Design and Build

The Design and Build procurement method can take several different forms, which are
generally tailored to the client’s needs and wants. The main concept of single point
responsibility allows the client to reduce risk. The client will generally go directly to the
contractor instead of traditionally going to the architect first. In many cases the
contractor will use their own in-house team or appoint a consultant. Sometimes the
contractor will also take on the clients consultants, and continue to use them to complete
the required design. This is known as a novation agreement. This can vary depending on
the level of design responsibility given to the contractor.

The client will prepare the particular requirements needed for the project and provide
the contractor with an appropriate amount of time to prepare a tender price and
proposal. Research undertaken by (Gidado and Arshi 2004) shows there are as many as

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six different variations of design build procurement methods used in the industry and
new ideas are always being introduced into the industry.

Client led Design and Build is where the client is completely involved in influencing the
design process of the project. The design risk is fully taken on by the client and is and
generally used in circumstances where the client has specialist design features and
installations for the project. Client led Design and Build is not used as commonly as the
contractor led form of Design Build which leaves the contractor fully liable for design
rather than the client.

Under the general Design and Build contracts, the contractor will take on the work of
the Design and Build for a lump sum price. The contractor assumes all liability for the
design except in circumstances where the subcontractor has a design clause in their
contract. In such circumstances, the client may require a collateral warranty.
The U.K Joint Contracts Tribunal (JCT) describes a collateral warranty as “a contract
under which a construction professional, contractor or sub-contractor promises to a
third party (the "beneficiary") that it has complied with the requirements of its
professional appointment, contract or sub-contract.”

In the case Trebor Bassett and Cadbury v ADT Fire and Security, ADT fire and security
had designed, supplied and fitted the factories fire suppression system. In 2005 the
factory was destroyed by a fire, it was held that ADT were liable for failing to design
the system with reasonable care. The damages were only reduced because of Cadburys
own negligence, this shows the risk contractors take on board when agreeing to take full
liability for the design of the building (RICS 2016)

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2.1 Advantages & Disadvantages
The Design and Build approach, like many other procurement methods has both
benefits and complications for each party involved. The main benefit, from a client’s
perspective, is the single point of contact for responsibility. This provides a one stop
shop for the client in terms of project management and it also minimises design risk as
the contractor takes on a greater level of risk for the duration of the project (Franks
1992). In addition, the client has a realistic idea of the financial commitment required
for the project before the project commences, providing no changes are made during the
course of the project.

Furthermore, there is minimum overlap between the design team and contractor which
reduces time wasted, shortens project timelines and reduces expenditure. The timeline
in many cases can be accelerated and the contractor can commence the project even
before the design phase has been completed. There is also the potential to lower costs
because the contractor has greater control and therefore costs can be defined earlier in
the project. In addition an accelerated timeline can also help to reduce costs
(Boudjabeur 2001).

There is also significant increases, in some cases of improved buildability as the

contractor has the opportunity for greater influence in the design process. However, this
entirely depends on the level of guided direction that has been enclosed in the clients
design requirements.

Significant cost savings in project time are also made possible through overlapping the
later stages of design with the early stages of construction. While this may be in the
client’s interest, the contractor also has an incentive to finish the project ahead of
schedule (Akintoye 1994). However, shorter timelines may affect the quality in some
cases and this can often lead to dull design features. However, this may suit government
bodies building schools, motorways or industrial buildings that need quick completion
times and minimal design efforts

One major disadvantage from a client’s perspective in this type of procurement is that
the architect and engineer will represent the contractor’s interest and not the clients as

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much as in traditional procurement. This can lead to the client being less informed
regarding important project information and financial information.

Managing the cost of a design build project from a client’s perspective can be a major
issue as the contractor is in full control of the costs and as a result, their quantity
surveyor has access to minimal cost information. This can result in the project becoming
price driven at the sacrifice of quality (Caddick 2017).

In addition, if the client wishes to make changes to the project it can be very disruptive to
the contractor and can be expensive to implement, depending on the version of design
build that has been used and the level of involvement from the client that has been
taken.

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3.1 Implementation
The client’s requirements are generally used on typical Design and Build projects where
the contractor takes on the design risk of the project. The clients requirements provide a
detailed list of the scope of services, the specification of the building generally and
allocation for risk of the unknown or unexpected items. The contractor will then
commonly respond with the contractor’s proposal which highlights the contractors
suggested approach for designing and constructing the building alongside their price
(Latham 1994).

In most cases the implementation of Design Build can run smoothly however, if the
requirements are not set out correctly early in the tender process, it may lead to disputes
between the parties which can create unnecessary costs for the client. However, this can
be prevented if the client is prepared and is certain the correct type the type of design
build procurement method is being used from an early stage.

In addition, the decision to use a single stage or two-stage tender process needs to be
decided early in the process. Generally, a single stage tender process is only suitable
when the client’s requirements are sufficiently established that the contractor can
provide a reasonably accurate price (Flenn 1992). However, a two stage tender process
may be more appropriate when the requirements are not fully set out and the contractor
can provide a schedule of rates for more clarity on pricing at the second stage tender.

In certain cases the implementation of the design confirmed by the contractor may not
coincide with the clients standards and this can result in a dispute. This execution issue
would require returning to the client’s requirements and discussing if the standard suits
the requirements. In the case it doesn’t, the contractor will have to take on board the
liability. This execution issue ties into general tendering issues and agreeing on a
program.

Agreeing a program can also be an implementation issue in the procurement process as

the client may have different ideas to the contractor as to what stages the project should
be at and when. As the client may not have a design team to advise them on the matter
this can cause disputes within the implementation process. This can be prevented early
on in the process through clear and specific instruction.

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Conclusion
As a method of procurement, Design and Build has been an important change in the
process of procuring buildings when comparing to the traditional and management
contracting methods. The main concept is placing the responsibility for both design and
construction with the contracting side of the industry so that the contractor will take on
all risks involved in the construct and design process. The overall goal is success:
“Success is the ultimate goal in any construction project. Project participants
contribute in a variety of ways to the success level in the building process.
Indeed, project success is attributed to a number of critical factors” (Beale and
Freeman, 1991).

Design and Build has become more suitable over the years to large and complex
projects due to specialist contractors. Although effective on large complex projects the
Design and Build procurement method has shown to be continuously effective on
normal construction projects. For example in 2012 John Sisk and Son undertook a
Design and Build fit out of a 2nd floor in a Nursing home in Drogheda, Co. Louth. The
work consisted of mechanical and electrical services into existing system and matching
specification of the existing layout. The fit-out programme took fifteen weeks to
complete which comprised of 46 bedrooms complete with Ensuite/sitting and dining
facilities alone with additional laundry and cleaning rooms. The project highlights the
benefits of the Design and Fit Out approach as the project was completed in an
extremely short timeframe. Which was particularly suitable this type of project as they
required the building to back fully functional in a short period of time. This can be
attributed the fact that there was minimal overlap between design team and contractor
and specialist contracting (Chappell 2007).

Though there are several different varieties of Design and Build options available they
are generally client focused and in the benefit of the client. There is sufficient evidence to
show that the Design and Build process is growing in popularity. The Design-Build
Institute of America (DBIA) did a study in 2014 and found Design Build in
residential to have increased by ten per cent in the past five years. They also
found that over 50 per cent of projects valued at over $10 million were using
Design Build. These figures represent the newly accepting attitudes towards the
method how it effective it can be whether typical or complex.

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In terms of client value it has proven to be very effective once the requirements are set
out early in the tender stage of the project and the contractor is reputable. In certain
cases the project quality has fallen to meet cost and time which has led to some dull
developments and buildings in terms of design. The plus side is the buildability of the
project. As Design and Build projects require a greater level of managerial expertise
from the contractor for the integration of design and construction, the selection of
contractors and sub-contractors has been considered as one of the most important
success factors (Hemlin, 1999).

Design & Build has been used in the construction industry for decades. It is particularly
embraced by the public sector as it suits their needs for fast, cost efficient buildings that
have a buildability factor. The effectiveness on typical construction projects can in some
cases not be effective. If implemented correctly and the right type of Design and Build is
selected a project can and generally will be a great success.

In 2015 John Sisk and Son contractors took on a Design and Build project for Kennedy
Wilson of 3 apartment blocks of 166 apartments through value engineering they were
able to deliver the building made entirely from precast concrete earlier than agreed
completion date and to a higher spec than the client had anticipated. The use of
innovative technologies such as full bathroom pods from Italy also played a role in the
value engineering. This project showed evidence of how the Design and Build
procurement method is an effective one for both client and contractor, as the
overlapping and better teamwork between design the team and the contractor allowed
for a cost effective, functional building to be built within the defined timeframe and be
delivered virtually snag free.(Sullivan 2017).

The construction industry is constantly evolving and through the use of improvement
tools like benchmarking, the industry can improve the tendering process and improve
the overall Design and Build procurement methods making them largely more effective.
Through the constant improvement within the industry and the evidence of the
effectiveness of this procurement method, it is quite clear that Design and Build is an
effective method of procurement for normal construction projects (Edmond 2004).

Word Count: 2,840

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