Understanding The Design/Build Method
The design/build method of building isn’t exactly new. But it’s growing popularity in commercial and public construction has taken time to trickle down to custom home building.
And for good reason.
Design/build is a very different animal. Even if you’ve had a home built before, and so are familiar with the standard architect/design and construction contracts, design/build can seem as mystifying as it is attractive. The advantages:
- Design/build is usually a “turn-key” operation. Your building project is overseen by an architect or general building contractor who acts as your representative for the whole project: From earliest conception to handing you the keys.
That can take lot of stress out of what is, for most people, a very stressful project.
- Because the project is under one firm’s management, the entire project is streamlined, which aids in budgeting control and time management.
This reduces costs and decreases the amount of time it takes to deliver the project.
- You don’t don’t have to shoulder the burden for making decisions you might not feel comfortable with: Like selecting a good builder or plumber or making the testy bureaucracy come to the table so you can get on with things.
Your design/builder is (or should be) a professional. S/he knows how the system works, and knows whose going to do a good job building your new home.
How A Design Build Contract Works
Unlike a standard construction or remodeling contract, where the contractor is handed a set of construction documents and asked to quote a price, the design/build project starts with no more than a budget and a conception. The conception is often no more than sketch drawn on a napkin over lunch. The purpose of the design/build process is to turn that napkin drawing into a finished project for the money in the budget.
To do that, the design build contract talks about phases of work, and uses control documents to allow you and your design/builder to manage each phase of the project with respect to the budget.
The first phase is the design phase: Here you and your design/builder turn your dreams into construction documents. In this phase your design/builder will be estimating prices for you from well known statistical data. Your design/builder will also be working with the various regulatory agencies to make sure that their requirements are met, and that there are no road blocks in the way that will prevent the project from ever seeing completion.
In my contract I call the first step in the design phase “project feasibility”: Can we build the house you want to build? Are there any impediments that will either be too costly or virtually impossible to remedy? Questions I like to answer for the customer before money starts being spent on designing a house that can never be built!
In design/build, project progress is usually controlled by a document called a “Notice To Proceed”. This is a document usually given to you by your design/builder, which you have to sign, that gives him or her your authority to proceed with the step. Along with the Notice To Proceed there is also usually some requirement that the design/builder provide you a budget estimate of what that phase of the design process is going to cost.
Personally, I break things up into three phases: Feasibility, design, and production of the final construction documents. That way, at any point along the way, you can stop if you need to. If fixing some site problem is going to bust the budget, we’ll end up stopping in the feasibility phase. If I can’t seem to get the floor plan to look like you want, we’ll never get past the design phase. You’re free to hire someone else to move the project forward. But if we make it through the first two hurdles, then we’re ready to nail down the final construction documents needed to begin construction.
Which brings us to the construction phase: In a linear sense, once the construction documents are completed, your design/builder will ship the plans off to the various suppliers and trade contractors who will be building (or bidding to build) your home.
In practice, the design/builder has usually already been talking to vendors and contractors about the project, so much of the preliminary budgeting and bidding work will have been completed by the time the building department signs off on the final documents.
In any event, when all the bids are in and the prices are known, your design/builder will present you the final price and time line for construction. This is usually done in the form of another (the last) Notice To Proceed with construction. This Notice To Proceed will look the most similar to a traditional construction contract, containing, among other things, the progress points at which you’ll be required to pay preset amounts on the project.
Until eventually you’re writing that final check and being handed the keys to your new home. Project, and contract, complete.
Things To Watch For
Unlike regular construction projects, your relationship to your design/builder is going to be a lot more intimate. There’s going to be quite a bit of back and forth as you make the hundred or so decisions that only you can make about your new home. At the same time, you need this person to be able to tell you when something just isn’t going to work for one reason or another. So your design/builder needs to be someone with whom you can develop a good working relationship.
It also needs to be someone who will treat you fairly. Be wary of contracts that lock you in early. I have heard that new AIA (American Institute of Architects) design/build contracts apparently make you pay a severance fee if you decide to let the architect go prior to completion of the project, for instance. This locks you into a relationship with a person you may hate to death, or forces you to pay a healthy fee to get rid of the git!
At the same time, realize you need to treat your design/builder fairly too. It’s unreasonable to expect your design/builder to put a month or more of time into initiating the construction process, lining up subcontractors, vendor pre-construction materials orders and delivery schedules, putting together a construction schedule so the subs know when they’re expected to appear and so on, only to then be told you’re letting them go. Many design/build contracts, including mine, do expect some compensation in that eventuality. But that’s very late in the process. And long before all that pre-construction time gets invested, you should know whether you want your design/builder actually building your house, or whether you want to put the project back on a more traditional design/bid/build track and look for someone else.
Make sure your contract keeps you in charge! I can’t emphasize this enough. Don’t be bamboozled by some fast talking contractor or architect. This is your home and your money. Certainly there are rights and commitments on both sides, but in the final analysis your design/builder is, or should be, working for you. The contract should reflect that.
In the same vein, don’t ever sign a contract that locks you into your design/builder’s schedule. The schedule should be something worked out between the two of you, and documented via the supplementary documents attached to the Notices To Proceed as circumstances and conditions dictate.
Finally, maintain your self awareness: Building a new home is more stressful that most people realize, even using the design/build method. If you need a break, don’t be afraid to tell your design/builder you want to put the project on hold for a few weeks while you take a vacation. (Don’t over look the fact that your design/builder might need a break too. S/he’s only human, and burn out is as common in construction as it is in other high-stress jobs. But they probably won’t ask. You’ll have to “recommend” it.) If you need to sign a change order to make that happen do it! Believe me, in the long run, losing a month to take a breather will seem a small price to pay for the increase in quality and satisfaction you’ll have with your new home.
Good luck with your design/build project!
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