Why Is Design-Build Becoming Such a Big Industry?

By
Home Builder

As a professional involved in the real estate sector, you may have heard of the design-build industry and noticed that it's popping up in more conversations lately. The design-build approach involves a single contract shared by the designer and construction contractor. Traditionally, the customer requesting the building project negotiates one contract with a designer, and another deal occurs with the team handling construction. 

However, problems can arise with the conventional approach when things go wrong. A designer and contractor may blame each other for the problems. This scenario often causes delays that stress the customer, and litigation may be the only option that ultimately resolves the issues. 

A report published by Fails Management Institute (FMI) investigated spending in the design-build sector for a selection of industries. The research expects an 18% growth from 2018-2021, totaling over $320 billion. Moreover, the report anticipates more design-build accounting for 44% of construction for the period studied. 

Let's look at some of the factors contributing to the rising popularity of the design-build industry. 

This System Prevents Significant Delays Caused By Incomplete Information

One of the common issues with having a separate design and construction team is that slowdowns happen if the design instructions arrive to the contractor and don't include all the necessary information. According to the 2019 Associated General Contractors (AGC)/FMI Risk Management Survey, 43% of contractors increased their in-house design capabilities.  

The company that released the survey also reported how, in 2018, 92% of respondents said they received incomplete design documents. It makes sense, then, why firms would prefer to become more equipped to handle design-build contracts instead of continuing to tolerate the delays that could come about due to having questions regarding the design materials.

Some small delays could still arise, of course. But, since a designer and contractor work together under a design-build contract, it's easier to get any missing information sorted out quickly. 

Design-Build Projects Let Owners Get Returns on Investment Sooner

Federal and state authorities often choose the design-build approach because it lets them speed up the returns on investment. Construction can begin before the design phase completes, which often cuts costs and suits projects defined by tight schedules. 

The design-build approach promotes achieving shared goals on a similar timeline, which boosts efficiency among all the parties working on a jobsite. All the respective parties collaborate, and they should all have the same perspectives about what needs to happen and when.

Owners are typically concerned with project expenses regardless of the size and scope of an endeavor. However, when they have to answer to superiors such as city officials to give information about timelines and budgets, the design-build method can help because it keeps everyone on the same page and makes the project pay off sooner for an owner than it otherwise might. 

This Method Allows for Better Responsiveness to Problems

Sometimes, problems arise once construction work begins, and designers must get called in to decide how to overcome those obstacles. Since the  design-build method has designers and contractors working together to figure out a consistent schedule for the overall project, it's easier for the designers to weigh in if their expertise is necessary due to unforeseen circumstances. 

In one award-winning design-build project for an airport concourse annex, people involved in excavation for the project discovered soils making the existing foundation unstable. This issue required a redesign of the structural foundation, but the project stayed on schedule. The designers and contractors kept communicating with each other throughout the process and came up with the best way to overcome the challenge. 

Doing Things the Design-Build Way Reduces Risks to Owners

Risk reduction for owners is also driving the popularity of the design-build industry. Other approaches to construction keep designers out of the pre-construction and scheduling processes. But, since design-build brings designers in early, owners can minimize risk, which improves their relationships with lenders.  

The design-build process also brings more predictability into the equation, which can help owners set expectations for stakeholders. However, success requires more than everyone making plans early. Each party must remain disciplined to stick to the agreed-upon plan but show enough flexibility to adapt if circumstances change. 

More Growth Ahead

The reasons mentioned here are just some of the many advantages causing more projects to move out of the conventional design-bid-build process and choose design-build instead. The design-build method is no longer seen as an alternative, but it's coming into the mainstream. As such, the growth seems set to continue beyond the period discussed here. 

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