12 CHAPTER ONE
DESIGNBUILD CONTRACTS
The designbuild concept, as originally conceived, was based
on the concept that a single firm had the in-house staff and
expertise to perform all planning, design, and construction
tasks. Later, increased interest in the concept had engineers,
architects, and conventional contractors seeking to compete
with the original designbuild firms to meet the growing
interest by owners in the project delivery process.
Under the current approach, instead of limiting
designbuild to firms with in-house capability in both areas,
the field has now been opened up to permit contracts with
engineers who subcontract the construction portion to a
contracting firm, with construction contractors that sub-
contract design services to an engineer or architect, and with
engineers and architects in joint venture with contractor
firms.
There are basically three types of designbuild firms
today: contractor-led, designer-led, and single firm.
Contractor-led firms tend to dominate due to their experi-
ence in estimating, purchasing, cost control, and construc-
tion supervision, not to mention the contractors better
financial backing and ability to manage risk.
DesignBuild Documents
In recognition of these relationships, a special group of stan-
dard contract documents for designbuild projects was
prepared by the Engineers Joint Contract Documents
Committee (EJCDC).1 They are available from ASCE, NSPE,
AGC, or ACEC.2 The documents, and an accompanying
guide on how to use them, are probably the most compre-
hensive set of standard documents now available to those
who work with designbuild projects.
The special designbuild documents cover a variety of
situationsfor example, the relationship between owner
and design-builder, which includes both general condi-
tions and two agreements (one for a stipulated sum con-
tract, another for a cost-plus contract that has a provision
for guaranteed maximum price). For design-builders
without a professional in-house staff to perform design
services, EJCDC has prepared a subagreement to be used
by both design-builder and engineer. To cover the rela-
tionship between design-builders and construction sub-
contractors, another document covers general conditions
and two subagreements (one for stipulated price, the other
for cost-plus).
Among the highlights of the new documents are descrip-
tions of the selection process; scope definition; differentiation
1EJCDC is a multidisciplinary group made up of the American Society of
Civil Engineers (ASCE), the National Society of Professional Engineers
(NSPE), the American Council of Engineering Companies (ACEC),
and the Associated General Contractors of America (AGC).
2The ACEC referred to here is the American Council of Engineering
Companies, not to be confused with the Association of Consulting
Engineers of Canada, which shares the same acronym.
of design and construction work in several areas (such as pro-
viding for a general warranty and guarantee for construction
work as well as a standard of care for design work); a dispute
resolution process; responsibilities for subsurface conditions;
remedies in the event an engineer is asked by design-builders
to compromise an engineers legal and professional responsi-
bilities; and communications among engineer, design-
builder, and owner.
An integral part of the new group of documents is
a separate guide describing their use. The guide includes a
commentary, a guide for preparing requests for proposals,
a suggested proposal form, and a how-to guide on the
preparation of supplementary conditions.
Because many owners dont have the in-house expertise
to prepare proposal documents (or review design-builders
design submittals, observe the quality of construction, and
so forth), EJCDC is now preparing another document for
use by the owner (and an owners consultant) to cover such
services.
DesignBuild for Public Projects
While quite popular in the private sector, some public agen-
cies find that the process still presents legal hurdles resulting
from alleged conflict between the design professional selec-
tion process under the Brooks law and similar local regula-
tions and the competitive bid process traditionally used for
contractor award. At the federal level, however, legislation
enacted in 1997 makes it possible to award designbuild
contracts under specified conditions.
The principal barrier to the use of the designbuild
process in the public sector lies in the difference between the
procurement laws governing the selection process for archi-
tects and engineers versus that for construction contractors.
Most state laws require the selection of architect/engineers
on the basis of the most qualified, with the price set by nego-
tiation. Construction contractors, on the other hand, must
be selected on the basis of sealed bids, with award going to
the lowest responsible bidder. As it can be seen, there is an
immediate conflict when attempts are made to contract for
both design and construction under the same contract. To
further complicate matters, many states require bidders to
list subcontractors in their bids, a near impossible task in a
designbuild contract, as the project has not yet been
designed.
Federal DesignBuild Contracts 3
Effective October 10, 1997, the federal government was
authorized to enter into designbuild contracts using a
two-phase designbuild selection process authorized by
10 U.S.C. 2305a and 41 U.S.C. 253m. Under those provi-
sions, a two-phase designbuild selection process may be
3c.f. 48 CFR Ch. 1 (10-1-97 edition) Subpart 36.3Two-Phase DesignBuild
Selection Procedure.