Blue Flag Homes Bespoke Design & Build Contracts
If Design and Build did not benefit owners as well as home builders, there would be few customers for the service. However there are benefits to owners. The benefits arise mostly from the advantages over competitive bidding in a number of respects.
Like many companies we typically charge about half as much as Design firms (and Architects) to prepare plans. In general this is because there are only one company’s overheads to cover. Additionally when designing for competitive bids, Design firms often feel compelled to create exceedingly detailed plans and specifications for two reasons: First they try to solve the proverbial Apples to Apples conundrum: that is. They are trying to ensure that all bidders are covering exactly the same scope of works. Second, they are trying to protect themselves from lawsuits for omissions and errors should the owner award the contract to an incompetent builder who might blame his mistakes on alleged inadequacies in the plan. Design and Build firms, facing no such pressures charge less for design services.
In the design build process, design and estimating proceed in unison, with the result that the final design can be built for the owner’s budget. For competitive bidding however design typically proceeds with little or no builder input on costs until the plans are complete. As a result the owner’s investment in highly detailed and costly design sometimes leads to a grotesquely ironic result. The plans go out for bids. All bids come back far above the owners budget. Having paid out all of the money for a process that supposed to bring them the lowest price they end up with nothing but prices that they can’t afford to pay.
Quality of construction
Because design and build companies are acquiring jobs not on the basis of lowest price but of value they are motivated not to cut corners but to produce good work. In competitive bidding, as architects will warn, owners must be aware of low prices even though they are looking for it. Bids are low because lower cost materials substitutions have been made, not enough time has been allowed to properly build elements of the project and price not quality is emphasised in choosing sub-contractors. To be fair it should be remembered that because no builder is involved during the design and because designers often do not understand construction methods in detail the plans can create unnecessarily complicated and / or inferior construction detailing.
Omissions and Variation orders
Well- delivered design and build services alert owners to the costs they are likely to face during construction for work additional to that shown in the plans. Competitive bidding on the other hand often leads to the owner getting nailed during construction for numerous changes by a builder intent on making up for the too low price he had to submit to get the job in the first place.
Quality of relationships
Often competitive bidding results in a tension between the design firm and the builder. The designers fear that the builder will place blame for problems on their plans or take liberties with details to cut costs. The builder may be annoyed with the designers for the inadequacies in the plans which add to the financial pressure that he is already under. As a result the owners find themselves in the middle of a nasty adversarial relationship. With design build since the design and construction is provided by the same entity the potential for the owners to get caught in the middle virtually disappears.
The design and build process certainly does not always work perfectly. Design build companies do occasionally produce over budget designs. They do falter and bring in inadequate subcontractors. Communication between the designers and builders within the company can break down and details may be drawn or built incorrectly, but the design and build process reduces the problems and if it well presented then owners will often see that it is the best route to follow.