The Design-Build Process – What exactly is “Design-Build?”

You have probably heard of the term “design–build”, but what is it that, exactly? Design-build is a one-stop, seamless way to build a home or undertake a remodeling project. Think of the players as having hats. There is a “design hat” and a “construction hat” needed to do a construction project. Most people think these are two separate disciplines, but they do not have to be. In fact, it’s better if they are not! With the design-build approach, one company wears both of these hats.

Instead of having a separate architect (who does not know what things cost, or what things might be overly complex to build), and a separate builder, they are wrapped into one firm that does it all. Even better, most design–build companies also take care of the permitting process and also the engineering work required to build or remodel. This is why we are such big proponents of design-build at Legal Eagle Contractors.

The client’s budget is respected throughout the process and the final price is negotiated to the mutual satisfaction of both parties. The design work is often done as a separate contract from the building contract. Some contractors allow you to take the plans and have another contractor build them once the design phase is done, but most do not. Usually it is not needed because the parties know and trust each other very well after working closely together on the design work.

A typical step-by-step design-build process can be found here.

 

Design-Bid-Build (DBB) vs. Design-Build (DB)

DBB is probably what would be viewed as the more traditional building process used in the United States historically while DB is anticipated to grow exponentially over the next two to three years to reach nearly 44% of construction spending, according to a study by Fails Management Institute (FMI) in June 2018.

Typically, the DBB process includes hiring a separate designer and contractor. The designer delivers the complete design. After completion of the design, the project owner solicits bids from contractors to perform the construction work according to the design. Throughout this process, the design company and the contractor have no contractual relationship or obligation with/to each other. The owner is burdened with all the risks associated with the design and the construction.

DB’s process is quite different and more attuned with the changing design and construction needs and wants of both the private and public sectors. This method is characterized by a high degree of collaboration between the designers and contractors and all risk is borne by this same entity. DB’s rise in popularity stems from recent trends in the building and construction industry:

  • A want for enhanced quality.
  • A want for customized projects.
  • A need for reduced costs.
  • A need for shortened delivery.

DB is currently used in many smaller projects, but can also accommodate more complex building projects due to the collaborative approach of the design and contractor. 

 

Design-Build Firms vs General Contractors

When a construction project is planned, a contractor is required. An owner can choose between a general contractor or a design-build agency, among other types of contractors.

A general contractor manages the construction part of a building project. It is provided with the design and then plans appropriately to complete the physical work of those plans according to code. A general contractor will retain subcontractors to perform the necessary carpentry, electrical, plumbing, and other specialty work. A general contractor has no input or participation with the owner developing the design documents.

A design-build firm must perform the same responsibilities and duties as a general contractor. The design-build firm, however, is also responsible for much more than those duties. The design-build firm oversees the entire project from start to finish, contributing both to the initial vision of the construction project to the final function and aesthetic appeal of the completed project.

 

Example: How Design-Bid-Build Can Cost Time & Money

Here is a common nightmare scenario that occurs when you are not using the design-build approach:  You hire architect Bob Budget-buster, and give him a budget, say $600,000, to build a new 3000 ft.² home.  He charges you $10,000 to do this. Bob asked questions and listens attentively to what style and features you want to put into your new home.

However, along the way, Bob gets excited about a number of gorgeous details he can put into your home, to make it spectacular from his perspective.  Suddenly there are curved walls, barrel ceilings, complex roof lines and top-of-the-line appliances. You love what you are seeing but you are not sure if all this is within budget.

Bob assures you that all this can be done within the budget. In fact, however, Bob has no idea what it will cost to build. You put the job out for bid with two well-known, competent local builders. Both of the bids come in around $950,000. Way out of your budget.  Bob the architect defends himself and says that the builders are charging too much and that his plans are good budget–wise (in fact, he has no idea). You get one more bid, and it falls into the same range as the others. Bottom line: You spent $10,000 for plans for a home you can’t afford to build. You must abandon the project. Very frustrating, and a huge waste of your time and money.

 

Advantages of Design-Build

  • With the design-build process, the design is being done by a builder who knows what everything costs. A budget target is established at the front end.
  • As the design is developed in a very collaborative manner with you, cost of various features is discussed along the way. If you want to add an expensive feature, the builder will tell you what it would add to the project to do that. You can make an educated decision about whether you want to spend the extra money or not. 
  • Money can be saved during the planning of the project (and elsewhere) because your builder can tell you what you would save if you did not put a particular feature in, or traded features to get something included that is more important to you.  For example, the plans include a second laundry area and kitchenette in the master bedroom. You decide you would rather have a covered carport (porte-cochere) built in front of the garage instead. Since your builder knows what things cost to build, he gives you numbers you need to make a decision.  An architect cannot do this. He tells you that taking the laundry and kitchenette out of the project will save you about $30,000, but building the porte-cochere will cost about $45,000. Now you can make an informed decision. Is it worth spending the extra $15,000? To lose the master bedroom features and get the porte-cochere instead?  What if you want to add a patio cover with a medium-size outdoor kitchen? With the design-build approach, you get accurate information and answers along the way.
  • In a nutshell, the design-build process avoids nasty surprises at the end of the design work. You know what things will cost and you simply proceed into the construction phase.
  • Design-build works well for both large complex projects and smaller projects such as bathroom and kitchen remodeling. 
  • Teamwork. This advantage is directly related and subsequent to the collaborative approach of design-build. All members of the team work together to provide their expertise and input into the design — allowing for solutions to problems that would not have materialized but for this team approach.
  • Design-build streamlines the process resulting in things like one point of contact, reduced costs, and faster project delivery because the bid process is cut out, disputes are limited, and solutions to building problems are already solved prior to construction.
  • Superior quality. The designers and contractors work together as a team to meet performance needs, not simply design requirements, which materializes as improved quality.
  • It works well with projects that are done on a turn-key basis and on a cost-plus basis.  All of Legal Eagle’s work is done on a turn-key or fixed fee basis, which means that the risk of overruns is on the builder, not the homeowner.  With the cost-plus approach, the builder shows all of the expenses as the project unfolds and adds a fee to each expense, plus a management fee. There is no way to know what the project will eventually cost.  The builder makes money no matter what, and the owner takes all the risk that it will go way over budget.

 

The Design-Build Process: Sequence of Steps

The following outline will walk you through the sequential steps in typical design-build process on a larger residential project, with an architect involved. We work with an architect we like for our more complex jobs, but do the design work on simpler jobs, like baths, kitchens and simple room additions in house. The steps mentioning the architect would be excluded if Legal Eagle Contractors was doing the plans in-house.

*Updated January 2019.

The Initial Meeting

  1. Client-Contractor Interview
    1. Obtain client data: cell phone numbers, emails, etc.
    2. Contractor qualifications for the project
    3. Client background information. Discuss preferred design style, priorities and budget.
  2. Budget Discussion vs. General Costs vs. Value
  3. Discussion on Design-Build Process – We develop 3-D color plans like you see on HGTV for our projects.
  4. Introduce In-house Interior Designer-Selections Coordinator Services/Fees
  5. We Build to Meet Industry Standards (NAHB Residential Construction Performance Guidelines)
  6. If the project is a large remodel (like a whole-house renovation or second-story addition), determine client living requirements during construction
  7. Obtain copy of owner’s survey, duplicate site plan in our design software

The Design Meeting

  1. If a remodel, we measure and draw the “As–built” layout of the home
  2. Sign the design services contract
  3. Introduction and qualifications of our Architectural Designer
  4. Discuss project goals, style and budget
  5. Discuss project priorities and special interests

The Preliminary Design Drawing Presentation to Client

  1. Meeting at our offices to present and explore the 3-D plans on a large screen TV
  2. Make changes and revisions to the plans at that meeting
  3. Provide clients with Chief Architect “Client–Viewer” software, if desired, so they can explore the plans to their heart’s desire

Start Construction Cost Estimating for Revised Plans

  1. Obtain estimates from major subcontractors on preliminary design
  2. Discuss preliminary costs on project and compare to budget
  3. Make required changes
  4. Have clients discuss allowances and product selections with our Design-Selections Coordinator

Prepare Construction Drawings

  1. Builder works with P. E. engineer to provide additional construction drawing plan pages showing wall sections, roof wall and ceiling framing, nailing patterns, shear wall bracing, etc.

Prepare and Submit Final Project Estimate

  1. Major Subcontractors provide final bids based on final drawings
  2. Determine final product allowances or selections
  3. Review drawings and costs with client
  4. Review and finalize scope of work

Financing Procedures (If Applicable)

  1. Loan Application
    1. A 12-day Rule applies from date of loan application until Contractors contract can be signed
    2. Submit bid and drawings to Lender (Appraisal may be required)
  2. Loan Approval
  3. 1. Set appointment for closing of loan and signing of Contractor Contract.
    NOTE: Work may not start until three (3) days after loan is signed.
  4. Submit Disclosure Statement to Client for Signature

Contract and Loan Completion

  1. Loan and the Contractor’s Contract must be signed at the bank or financial institution
  2. Contractor will submit Vendor and Subcontractor lists for project
  3. Obtain mobilization check – 10%

Apply for Permit 

  1. Product selection guide must be completed before we file the application for Building Permit
  2. Clients to work with our Design-Selections Coordinator to make sure this is complete

Do the Pre-Construction Conference

  1. Introduce Project Manager to clients
  2. Complete our “Preconstruction Checklist”
  3. Review scope of work in detail, on site, with the Project Designer, Selections Coordinator, and clients
  4. Discuss initial schedule, working hours, storage of materials, hauling of debris, staging of selections, and other items on the checklist

Start Construction 

  1. Install company sign and flyer box in front of home
  2. Inform nearby neighbors about the construction, if required
  3. Provide dumpster and porta potty as may be required
  4. Assigned Project Manager to walk the proposed site with specifications in hand, with each trade to perform work on the job

Start site preparation and demolition (minimum 3-days after loan approval/contract signing) after work begins. At the end of the first week, submit First Progress Payment (”Draw”) and obtain Payment  Progress Payments every 2 weeks after that.

 

Sample Pre-Construction Checklist:

LEGAL EAGLE CONTRACTORS, CO.

REMODELING PRE-CONSTRUCTION CHECKLIST

OWNER(S): ________________________ DATE: ________________

ADDRESS: _______________________________________________

ATTENDING for LEGAL EAGLE________________________________________

ITEMS REVIEWED WITH OWNER(S):

– Security & Access issues  – lockbox location.
– Construction Schedule – what activities to expect for the first 2-3 weeks.
– Additional Work Requests policy and procedures.
– Communication- What to do if problems arise

Production Issues ~ Call your Project Manager directly.

Office/paperwork issues ~ Call: Dan on his mobile.
– Designate an area on job for a Message Center.
– Contract specifications and Drawings, if required.  Oral vs. Written.
– Location for material storage: ______________  Trash location:______________
– Access location to job: ___________________  Lock box key given?: __________ – Owner’s bathroom available for use: _______________
– Owner’s telephone available for use: _______________
– Progress payment procedures.
– Estimated starting date: _________________  Estimated duration: ____________
– Substantial Completion Punch List and “walk-through” meeting at end of   project.
– Yard sign to remain during construction.
– Lead Disclosure Pamphlet  Delivered? ___ Y ___ N
Texas Disclosure statement? ___ Y ___ N.

OWNER RESPONSIBILITIES: – Keep alarm system off during the day.
– Keep children and pets clear of the construction area. Be advised: It is a   dangerous place.
– Have all selections made for paint, tile, flooring etc. before work begins.
– Have all fixtures and appliances on site before work begins or when Project Manager states.
– Remove and reset all wall hangings, furniture, computers & valuables in   areas surrounding remodeling work.
– Empty cabinets and clear countertops if applicable.
– Remove any shrubbery, flowers, etc that you want to save (room addition   Projects).
– Dust is inevitable – please cover belongings with plastic, move computers,   close doors to other rooms, and vacuum more often to help control dust from   spreading.
– Clear traffic areas to allow access to work areas for tools, materials and   construction activities.
– Material selections still to be finalized: _____________________________
OTHER ITEMS DISCUSSED AT MEETING: ____________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ _______________ CONTRACTOR: Legal Eagle Contractors, Co

OWNER _____________________________________________________
OWNER _____________________                          by: ____________________
DATE                                                                                        DATE

© Copyright January 1999, by Legal Eagle Contractors, Co.


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