Design and Build Contracts: Key Insights Explained

A&T Group Interiors specialize in 3 main types of construction services and contracts, these are: Interior Fit Out Service, Design and Build Service, and Turnkey Service Contracts. As specialist design and build contractors we have experienced a growing demand for our design and build services across various market sectors over the past 9 months. Due to this increase in design and build’s popularity, we decided to take a look at exactly what are the defining characteristics of design and build contracts, explore why project owners in the GCC may be transitioning to this project delivery method, plus examine some of the potential challenges for firms who may be looking to get involved in design and build procurement. 

 What are Design and Build Contracts?

A design and build contract combines both interior design and fit out services under one single contract agreement and can make projects more manageable, and less complicated for clients. These contracts can also be referred to as "single-source" or "sole-source" contracting. This means that the contractor is responsible for the design, planning, control, organization and construction of the project; and will provide all the relevant design documents, preliminary cost estimates and planning specifications to the client. This project delivery method creates a single point of responsibility, eradicating the need for multiple contracts, and thus reducing situations where the client becomes caught between designer and construction company in contract disputes. Further, a design and build contract increases the engagement between the design and build teams which can create greater efficiencies over the course of the project due to the fully integrated nature of the team working together from the beginning.

When is Design and Build Procurement Commonly Used?‍

At A&T Group Interiors, we find that many clients prefer to use this project delivery method for simpler projects, especially in cases where; the interior design is not a primary consideration, a strong pre-concept or concept design is already in place, or for the role out of multiple projects with the same interior design concept, such as a franchise, where the client already has detailed design renders in place and these just need adapting to the new site size and conditions.

Design and build procurement is also frequently used for projects that are on tight schedules in terms of time and budget. As experienced design and build contractors, we notice that clients often turn to design and build services like ours because they see an opportunity to save time and cost by combining both aspects of project delivery under a single agreement, thus creating a single bidding process, and a single-source collaboration culture from the start.

Benefits of Design and Build Contracts

Let’s take a look at some of the possible reasons clients may use this project delivery method: 

• Reduced time in the design phase
• Reduced communication channels - one single point of contact
• Earlier price certainty
• Value engineering alternatives open for discussion throughout the project
• Opportunity to make an early start on site due to the possibility of an overlap of design and construction phases
• Fast-track schedules 
• Earlier identification of long-lead items 
• An opportunity to customize the design to better fit the actual site conditions
• An opportunity for the client to reduce their risk, management and cost per project
• An opportunity for the clients return on investment to be capitalized sooner

 The Potential Challenges of Design and Build Contracts

Like any project delivery method, the design and build method presents it’s own set of challenges that usually revolve around the below: 

• Broad and potentially unclear roles
• High level of simultaneous decision making 
• Requirement of increased speed of decision-making due to the overall compression of the design and construction cycle
• Availability of decision-makers to keep up with speed of decision-making
• Absence of an appropriate feedback and resolution process to ensure queries can be closed out and documents approved for construction
• Misaligned expectations between the client and contractor

If not managed correctly, all of the above can negatively impact the schedule and budget for the project, and ultimately the client’s satisfaction.

‍How to Mitigate these Challenges? 

Design and build contractors can work to mitigate these challenges by ensuring to create early, and continued alignment among all project stakeholders, and work together to cultivate high levels of communication from the start. Before kicking off any project we recommend: 

• Assessing the clients’ motivations for using this project delivery system 
• Assessing the clients decision-making processes
• Developing a risk register 
• Holding internal meetings between all parties including estimation/design/preconstruction and project management/operations to form a clear alignment of responsibilities and expectations from the start
• Chose projects that best fit the organizations culture and experience

In our experience, the most successful design and build contracts are built on strong partnerships and alliances. Thats why it is important to choose your partners wisely and work diligently at creating strong internal alignment within the whole team when going down this procurement route.