PUBLISHED BY THE NATIONAL ENVIRONMENTAL SERVICES CENTER

Design-Build
By Zane Satterfield, P. E., NESC Engineering Scientist

Summary
Design-build is a method of construction where the design and construction tasks are contracted
with a single entity known as the design-builder or design-build contractor. The design-build method
is gaining popularity, with some projections indicating that more than half of all non-residential con-
struction projects in the U.S. will be design-build by 2015. This Tech Brief discusses some of the
aspects of the design-build method and how it might be used for water and wastewater projects.

What is Design-Build?
Design-build is a construction project delivery

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system where the design and construction
aspects are contracted with a single entity
known as the design-builder or design-build
contractor. Design-build is more streamlined
than the traditional method, often referred to as
design-bid-build, where design and construction
were clearly separated.
The design-builder is usually the general con-
tractor, but can also be the architect or engi-
neer. By incorporating the designer and
contractor, design-build minimizes the project
risk for an owner and reduces the delivery
schedule by overlapping the design phase and
construction phase of a project. Rather than
first bidding or engaging an architectural or
engineering firm to design the project and then
bidding out a contractor to build the project
(i.e., the design-bid-build method), the design-
build contractor packages the engineering design The Washington National's ballpark in the nation's capital is one of the
services in with the construction. best-known examples of a design-build project. Construction on the $630
million stadium, which also adhered to green-certified building guidelines,

Historical Precedent
was completed in less than two years.

The design-build delivery concept originates from For most of the 20th century, the concept of
the master-builder model used in the construction design-build was classified as a non-traditional
of structures such as cathedrals. Under the master- construction method in the U.S., which is one of
builder approach, a central figure—usually the the last countries to embrace the standard of
architect or engineer—held total project accounta- design-bid-build. However, design-build is rapidly
bility. From inception to completion, the master becoming the preferred form of project delivery,
builder was the key organizational figure and increasing from approximately five percent of the
strictly liable to the owner for defects, delays, and non-residential development market in 1985 to 40
losses. The design-build system is a return to some percent today. By 2015, the Design Build Institute
of the fundamentals of the master-builder concept. of America projects that this method will be used

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on at least 50 percent of all non-residential con-
struction projects in the U.S.

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DWFSOM137
 Differences between Design-Bid-Build and While either a contractor or an engineer can direct a
Design-Build design-build project, they must have the expertise to
complete the project. If, for example, a contractor is
With the traditional design-bid-build method, chosen, they must have a licensed engineer on staff or
the owner (e.g., a water or sewer system) one subcontracted for the design. If an engineering firm
would advertise for an engineer, adhering to is chosen, they need a contractor for the construction.
state and local policies and procedures, while
also lining up project funding. After the contract is issued to the selected company, a
notice to proceed is given and the project design is
After being selected, the engineer would started. Some activity may begin, such as purchasing
design the project with the owner’s specifica- supplies and materials, as long as it does not require
tions, incorporating state and local regula- permits. In most states, permits are based on the fin-
tions, and sometimes funding agency ished design drawings so that major construction will
specifications, too. The engineer would then have to wait for the proper permits. The design and con-
obtain the proper permits through the various struction may overlap depending on the permits
state and local agencies, including the water required. The selected company is solely responsible for
or sewer primacy agency. design, construction, inspection (quality control), and the
Next, the owner (occasionally the engineer) warranty.
would put the project out for bid to contrac-
tors, usually via a public advertisement. The Benefits of Design-Build
contractor with the lowest bid would typically be A study covering 351 projects in 37 states performed by
awarded the contract to construct the project. Pennsylvania State University in conjunction with the
If allowed, the chosen contractor has subcon- Construction Industry Institute found several benefits
tractors perform some of the construction associated with the design-build method. For instance,
tasks. From the signing of the contract on, any the design-build method reduced total project costs by
changes require a change order from the engi- six percent as compared to design-bid-build. Cost over-
neer and owner. Change orders almost always runs or change orders on the projects improved by 5.2
occur because of unforeseen situations. They percent over design-bid-build. And, most importantly, the
can become expensive if the project has not total delivery time for design-build resulted in an improve-
been planned well. ment of 33 percent over design-bid-build.

The engineer is usually responsible for inspec- Some key aspects of design-build include:
tion (quality control) during and after the con- • Singular responsibility—one entity is accountable
struction process. Once the project is for cost, schedule, and performance;
complete, the engineer verifies that the con-
• Faster delivery—collaborative project management
tractor has done everything to project specifi-
completes work faster with potentially fewer problems;
cation, and the owner signs off that they are
satisfied, too. Most water and wastewater proj- • Reducing change orders—design changes that occur
ects carry a one-year warranty, after which the because the design did not account for certain
project is the responsibility of the owner. obstacles or situations;
• Potential better quality—a design-build meets per-
With the design-build method, the owner formance needs rather than minimum design
(water or sewer system), after arranging requirements;
financing, advertises for a contractor or engi- • Reduced owner risk—a design-builder assumes the
neering firm to do the entire project from start risk to deliver;
to finish. The contractor or engineer chosen is
• Decreased administrative burden—the focus is on
not necessarily based on the lowest bid. A
the project as a whole, rather than on separate
selection process is done to determine if the
functions;
contractor is capable of completing the project.
Evaluation factors include: • Potential cost savings—an integrated team executes
efficient and innovative solutions; and
• Past performance (both the architectural • Fewer litigation claims—owners can reduce and even
and or engineering and contractor and eliminate litigation claims by closing warranty gaps.
major subcontractors);
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• Technical approach; While large design-build projects have been publicized in

• Technical qualifications (specialized experi- the media, this method is gaining popularity in small
ence); communities. Maize, Kansas, a rural town of 2,000
two

• Capability to perform; people about 10 miles northwest of Wichita, was the

PAGE

largest community in the state without a public water

• Other appropriate factors, such as insur-
supply. The homes and businesses there relied on shal-
ance and bonding; and
low wells that had high levels of nitrate. Being close to
• Bid amount.
Tech Brief • Design-Build, Summer 2009, Vol. 9, Issue 2
 DESIGN-BUILD

Diagram courtesy of the Federal Highway Administration

Select
Concept Preliminary Design/ Final Design &
Planning Design Builder Project Clearances Construction

Design-Build-
Minimal to Extensive Associated Time Savings
Contractor Input Extensive Contractor Input

DESIGN-BID-BUILD
Concept Select Preliminary Final Design & Select
Planning Engineer Design Project Clearances Contractor Construction

Minimal Contractor Input Extensive Contractor Input

Wichita, Maize was poised for development, but the lack The Relationship and Loyalties Among Parties
of a reliable public water system hindered the town’s The design professional is not the owner’s con-
potential. To encourage development and provide a safe, sultant but the contractor’s teammate. Design
dependable supply of potable water, the community set professionals have contractual incentives to
out to construct a complete water system. The commu- perform their services so as to further the
nity and its design-build partner brought the system design-build team’s goals, which are not
online in just 18 months. always in line with those of the owner. To
counter this, employ a designer-led design-
Considerations build, in which the engineer or architect is the
Before considering a design-build approach, be sure lead member of the team.
that your state allows it and that whatever funding
source you use endorses it, too. The Design Professional’s Standard of Care
Ordinarily, an engineer (or architect) is only
The most common objection to design-build is the fear held responsible for exercising the degree of
that the owner will lose control by delegating too much skill or care that the average design profes-
or suffer from compromises between design and con- sional would use, and does not usually war-
struction. The owner’s role simply changes from one of rant or guarantee a successful outcome for his
mediating problems between disciplines (design engineer or her services. The rule for a contractor is dif-
and contractor) to exploring and analyzing options to ferent, in that contractors do implicitly war-
improve value for the user. Ultimately, with good per- rant that the result of services will be
formance specifications, the design-build team (instead successful, provided that the design and other
of the owner) becomes responsible for the success of factors over which they may have little to no
the project. control is sufficient. The design-build relation-
ship allows a change in the designer’s stan-
If the owner is afraid that the quality assurance and
dard of care. In the design-build concept,
quality control will suffer, an independent inspection
unless written into the contract, the design
team can be specified for the project. Also, if a problem
engineer is held to the same implied warranty
is perceived, the funding agency may be able to help.
as a design-bid-build contractor.
Remember: whoever holds the purse strings has consid-
erable pull. Performance Warranties
PAGE

According to Friedlander’s article “Design-Build—Legal In a traditional construction contract, the con- three
Obstacles and Solutions,” there are legal considerations tractor is asked to warrant the results of their
OF FOUR

with design-build construction, including the relation- work, but not the overall success of the project.
ships and loyalties among parties, the design profes- This is because there are many other factors—
sional’s standard of care, performance warranties, change primarily design—over which the contractor
orders, licensing problems, insurance and bonding prob- has no control that may determine the success
lems, and conflicts with competitive bidding laws.

NATIONAL ENVIRONMENTAL SERVICES CENTER

 of the project. In most design-build projects, tractor even in design-build projects. In some cases,
the situation is reversed. The design-build con- more difficult restrictions exist at the state and local
tractor is responsible for so much of the project levels. Some statutes and regulations require competitive
that it becomes feasible to require the contrac- bidding on the basis of price, which could pose a problem
tor to warrant the project’s performance. Some for design-build projects.
of the liability borne by the contractor may be
considered professional, and the nature of the Closing Thoughts
professional liability borne by the design pro-
The successful implementation of design-build requires a
fessional may not be fully insurable.
cultural shift away from design-bid-build. Throughout the
Entitlement to Change Orders entire process, owners, designers, and contractors must
work together as a team. If followed correctly, design-build
In standard construction contracts, the con-
offers a faster, less expensive way for water and waste-
tractor is usually entitled to a change order if
water utilities to undertake construction projects.
any of these situations occur:
• Impacts caused by the owner (scope For More Information
changes, disruptions by owner); To learn more about design-build construction, visit the
• Changed conditions (unknown subsur- Design-Build Institute of America’s Web site at
face obstacles); or www.dbia.org.
• Design problems (errors, omissions).
The Tech Brief “Quality Control in Construction Projects”
In design-build projects, the first two categories discusses oversight of drinking water and wastewater
may still result in change orders, but the third projects and may be downloaded at www.nesc.wvu.edu/
category does not. Because the design-build pro- pdf/dw/publications/ontap/2009_tb/quality_control_DWF
fessional is responsible for the design plans and SOM81.pdf.
sometimes the specifications, his or her incen-
tives are to profit from the construction and are References
more likely to lean toward how much value they
Beck, Peter. 2009. “Why Design Build?” Accessed at www.beck-
are receiving for the project price. The owner group.com/alt_package/article.pdf.
may, therefore, want to maintain some control. Carter, William C. 2006. “Design-Build: An Innovative Approach
to Project Delivery for Rural Communities, The Maize
Licensing Problems Kansas, Story.” Rural Matters (Fall). Rural Community
Assistance Partnership.
Every state in the U.S. regulates the practice Friedlander, Mark C. 2002. “Design-Build—Legal Obstacles and
of professional engineering and architecture, Solutions.” Journal of Management and Engineering. Chicago:
and each state’s laws are different. Most Schiff Hardin.
design-build contractors do not meet all of Loulakis, Michael C. 2002. “Design-Build for the Public Sector.”
Construction Law Library. Aspen Publishers
these requirements and are not themselves Loulakis, Michael C. and Mark C. Friedlander. 2002. “Design-
licensed as design professionals. Therefore, Build—Legal Obstacles and Solutions.” Accessed at
design-build contractors usually provide engi- www.schiffhardin.com.
neering and architectural services by joining Smith, Gray. 2009. “Design-Build Concept Expands.” Accessed
at www.gsoexpert.com/designbuild.htm.
or subcontracting with a design professional.

Insurance/Bonding Problems
Issues relating to insurance and bonding
affect the relationship between the design-
build parties. Design professionals’ errors and
NESC Engineering Scientist Zane Satterfield is a
licensed professional engineer and a licensed water
omissions insurance usually excludes con- operator, and previously worked for the West
struction services and contractors’ general lia- Virginia Bureau of Public Health,
bility policies exclude professional services.
Environmental Engineering Division.
Certain states have anti-indemnity laws for For a complete list of Tech Briefs, visit the NESC
construction projects that limit the parties’ website at www.nesc.wvu.edu/techbrief.cfm. You
contractual ability to redress this disparate may download Tech Briefs for free from the site or
impact. One solution is appropriate cross- you may order them for a nominal cost by calling
agreements with the design professional and (800) 624-8301 or by sending and email to
[email protected].
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the contractor supported by the design profes-

sional’s errors and omissions insurance.
four
Conflict with Competitive Bidding Laws
PAGE

Projects funded with public money usually

require a competitive process to choose a con-
An Equal Opportunity/Affirmative Action Institution

Published by The National Environmental Services Center at West Virginia University, P.O. Box 6064, Morgantown, WV 26506-6064

Tech Brief • Design-Build, Summer 2009, Vol. 9, Issue 2