Benefits and Risks of Involving a Project’s Contractor in The Design

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The roles of designers and contractors are being combined for more and more construction projects. This approach has benefits, but it also creates risks.

One traditional method of project delivery is called “design-bid-build.” The owner retains an architect to prepare a design, and then it retains a contractor to build according to that design. This method is well-suited for public projects in which multiple contractors are solicited to bid based on a completed design.

An alternative method is for the owner to hire a contractor (a “construction manager” or “CM”) during design development to provide advice about constructability, budget and schedule. The CM enlists major subcontractors at this early stage to collect information about preferred design details and probable cost. This CM method is intended to align the contractor with the designer to reduce claims based on design defects, and it can result in a more informed budget and schedule than design-bid-build.

A third method is called “design-build.” The owner hires a contractor/designer team, provides performance requirements for the project, and allows the team freedom to design and build the project to meet the stated requirements. In this method, the contractor and designer are closely aligned, which should limit claims of design defect, and work on the project can begin while the design is being developed. This method can work well for infrastructure or industrial projects in which technical performance is more important than appearance or amenities.

The foregoing methods are not exclusive. Different projects may include different roles for owner, designer and contractor. In design-bid-build, it is common to leave the design details for mechanical, electrical and plumbing as well as fire protection systems to specialized subcontractors. On the other hand, even in design-build the owner may retain control over certain design aspects.

Each method of project delivery offers advantages. However, involving the contractor in design, as happens in CM and design-build, can create risks. A project participant may fail to understand and carry out its responsibilities. For example, a contractor hired for a CM project may lack experience in pricing a developing design or analyzing it for constructability. A CM project architect may not realize what is involved in working with a CM and may defer to its preferences. An inexperienced owner on a design-build project may be tempted to intrude into design decisions without recognizing that by directing design matters it is incurring risk.

Because of the various ways that owners, designers and contractors can interact, it is important to have a clear understanding about each party’s responsibilities and to express that understanding in clearly written contracts.

In design-bid-build, the responsibility for design rests entirely (or mostly) on one party — the designer. In the CM and design-build methods, the responsibility for design is shared, so there can be misunderstandings about who is doing what, particularly when multiple parties have contributed to design decisions.

On a CM project, for example, suppose the owner wants the exterior of the building to have a series of attractive planter boxes. The architect may depict those boxes on the plans, expecting the contractor to detail them. But the contractor may say, “Wait; those boxes could be heavy and they need to drain. The architect needs to figure out how to support them structurally and where the drains should run.” On a design-build project, the owner may specify that the structure must meet the seismic code but then reject the design-build team’s analysis of how the code applies and require significant design changes — thus causing a delay.

The best protection against these risks is design coordination, which begins with a clear understanding of roles and responsibilities and continues with open communication. On CM and design-build projects, the contractor and designer must work together to detect and resolve problems and conflicts.

The contractor’s role is particularly important. During the design phase, it should be preparing a comprehensive plan for constructing the project. This includes identifying work packages for subcontractors, ordering long-lead materials, and preparing a cost-loaded schedule so that critical activities can be identified and tracked. Having this constructability focus informs the contractor’s comments on the developing design and gives the owner early notice of issues that may involve a trade-off between project quality, on the one hand, and budget and schedule on the other.

To reap the benefits of getting the contractor involved in design, provide for and recognize the risks.

Originally published as an Op-Ed by the Oregon Daily Journal of Commerce on March 18, 2021.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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