By James Germano, Esq., Manager and Counsel, AIA Contract Documents
If you’re new to the construction industry, you may have heard of the terms “Design-Build” and “Design-Bid-Build” and wondered what they mean. This article explains the difference and gives some examples. Simply stated, these terms describe how and when the owner hires different parties to complete the project, how those parties are selected, and how they all work together.
First, let’s talk about Design-Bid-Build. In the Design-Bid-Build framework, the owner decides what they want to build (a home, a school, an office complex, a condominium, a stadium, etc.) and they typically hire a design team (an architect and maybe some others) to put together a preliminary set of drawings and a project description. This is where the first word of the term comes in: Design. These design documents are then used to create a “bid package” that the owner sends out to contractors so that those contractors can bid on the project to try and win the award. This is where the second word of the term comes in: Bid. The bids are then evaluated, and a contractor is selected to build the project. This is where the final word of the term comes in: Build. And there you have it; first you design, then you bid, then you build: design-bid-build!
Now let’s look at Design-Build. In a Design-Build framework, the owner decides what they want to build (perhaps the same home, school, office complex, condominium, stadium, etc.), but rather than hiring a design team to create a “bid package,” the owner hires a single company, known as a design-builder, to both create the architectural drawings and build the project. A design-builder can be a construction company who also performs design work, or a design company who also performs construction work. And there you have it; the same company both designs and builds the project: design-build!
Depending on which framework is used (Design-Bid-Build versus Design-Build), a different contractual setup will be necessary. You will need to analyze such questions as: Is the owner hiring an architect to create a “bid package” or a design-builder? Will the owner have any consultants? How will the design-builder (or contractor) be selected? All of these issues will affect which type of contract or contracts you select for your project.
The AIA Contract Documents program offers both types of contract frameworks (called families), which can all be seen on our Contract Relationship Diagrams. The “conventional” family is where you will find the Design-Bid-Build agreements, like the A101-2017 and A201- 2017. These agreements outline the process for a Design-Bid-Build project. On the other hand, if you are looking for a Design-Build agreement, the AIA offers those as well, such as the A141– 2014 .
AIA Contract Documents has provided this article for general informational purposes only. The information provided is not legal opinion or legal advice and does not create an attorney-client relationship of any kind. This article is also not intended to provide guidance as to how project parties should interpret their specific contracts or resolve contract disputes, as those decisions will need to be made in consultation with legal counsel, insurance counsel, and other professionals, and based upon a multitude of factors.