Design and build procurement – the way forward?
by Paul Taylor on Saturday, 08 March 2008 Paul Taylor, partner, HBJ Gateley Wareing UK LLP, considers procurement of construction projects on a design and build basis.
Recent positive comments by leading industry figures promoting the use of ‘design and build’ contracts for Middle East construction projects are encouraging signs that the industry is actively looking for alternatives to the ‘traditional’ procurement method used across the region.
Fundamental changes to the project scope or deliverables would need to be avoidedWhilst there are certainly factors which make design and build attractive, the viability and suitability of design and build for any particular project is not necessarily guaranteed.
In very simple terms, the distinguishing feature of a design and build contract is that the whole design and build of the project is covered in a single document. This should lead to advantages for both employer and contractor.
Single point responsibility – the responsibility and therefore liability for the design and build elements of the project remain with the contractor. There is reduced scope for argument on design and construction liability and this in turn can reduce the potential for claims arising out of cost and time overrun, as well as design errors.
Early contractor involvement – this allows better planning of resources and management, as well as a vastly increased understanding of the project by the contractor from its inception.
Potential cost savings – design and build has the potential to reduce overall project costs because the contractor performing the design should have a better feel and appreciation for the construction costs of the various alternatives and therefore can produce a design that is less expensive to build.
Earlier project completion – design and build may result in earlier completion and occupancy of the project because of the earlier involvement of the contractor. In addition, there should be a reduction in down-time between completion of design and start of construction.
However, it is perhaps naïve for the employer and contractor to think that design and build will solve all the problems that are commonly found in traditional procurement methods. This is because design and build carries with it certain risks and requirements which have to be understood and accepted by the parties in order to enable the design and build method to have a reasonable chance of success.
Less employer control – for design and build, the owner gives up a large part of its traditional control because, by its very nature, he is handing over the design responsibility to the contractor.
Earlier project requirements – with design and build the owner must confirm its project requirements much earlier in order that the contractor can assess and establish what is required and provide a meaningful and accurate price.
Changes to project requirements – changes brought in by the employer at a later date can be very expensive and disruptive, impacting on both project costs and completion date.
Therefore widespread introduction and use of design and build procurement have on the Middle East market, would require some changes in both the mindset and philosophy with which construction projects are currently procured.
Employers would have to resist the urge to interfere with the design and build process. Once the contract is let, it becomes ‘the contractors baby’ to deliver.
The project requirements need to be accurate and fixed such that the design and build contractor can prepare his price with as much certainty as possible.
Fundamental changes to the project scope or deliverables would need to be avoided, otherwise the whole concept and rationale behind the design and build method would be jeopardised, and in real terms, this would lead to very large increased costs.
In summary, there would need to be an acceptance of the design and build concept, led by the employers and owners of projects, and a genuine and concerted effort to move away from the traditional procurement route and contract forms used for so long in the region.
It is a fact that for construction projects ‘one size does not fit all’ and therefore for projects which are able to satisfy the fundamental requirements and factors of the design and build method, it is a viable and potentially successful procurement method for the region.
The question will continue to be whether the changes required for successful design and build project procurement are embraced by the regions biggest developers and by contractors. That can only be answered with the benefit of time and practical experience.
Source: construction Week