Design-build is not a niche delivery method. By 2028, it is projected to account for more than 47% of U.S. construction and approximately $2.6 trillion in construction spending, according to DBIA. As adoption grows, understanding how design-build changes contractual relationships, risk, and decision-making becomes increasingly important for project teams.
Unlike design-bid-build, where the owner holds separate agreements with the architect and contractor, design-build places responsibility for both design and construction with a single design-builder. That shift can simplify contractual relationships, but it also changes when decisions are made, how risk is allocated, and how owners, architects, and contractors work together.
And not every design-build project works the same way. Traditional design-build and progressive design-build use similar contractual relationships. Still, they differ significantly in how design develops, when pricing is established, and how much the owner participates.
In the AIA Contract Documents (ACD) webinar, “Design-Build Best Practices: What Every Project Team Should Know,” three construction and contract professionals brought perspectives from across the project team:
- Robin Banks, outside legal counsel to the AIA Contract Documents Committee
- Donovan Olliff, general counsel at HOK and a member of the task group that updated the 2024 AIA Design-Build agreements
- Alisa Schneider, senior director and counsel at AIA Contract Documents.
Together, they explore what owners, architects, and contractors should consider when choosing a design-build approach, allocating risk, and selecting contracts.
Watch the Webinar Replay
Quick Decision Guide: Traditional vs. Progressive Design-Build
| Consideration | Traditional Design-Build | Progressive Design-Build |
| Design at pricing | Typically about 20% to 30% developed | Can progress to roughly 60% to 90% before final pricing |
| Owner involvement | More limited after pricing is established | Greater collaboration throughout design |
| Design process | More design development occurs after price commitment | Iterative design development before price commitment |
| Contingency risk | Typically higher because more design remains to be developed | Can be lower because pricing is based on more developed design |
| Potential fit | Projects with clearly defined requirements or repeatable designs | Complex projects with multiple stakeholders or evolving requirements |
The right approach depends on the project, the owner’s needs, and how much design certainty the team wants before establishing its price.
“I see traditional design-build on projects that don’t have a lot of unique design elements, like, for example, a warehouse or self-storage facility. Progressive design-build, on the other hand, is much more appropriate where you’ve got complicated designs and multiple stakeholders.” Robin Banks
How Design-Build Changes the Project Relationship
The biggest difference between design-build and other project delivery methods starts with the contracts.
In a traditional design-bid-build project, the owner contracts separately with the architect and contractor. The architect develops the design, and the contractor typically prices and builds from a substantially completed set of construction documents.
Construction Manager as Constructor (CMc), also known as CM at Risk (CMAR), also maintains separate owner-architect and owner-contractor relationships. However, the CMc typically enters the project earlier and provides preconstruction input on constructability, materials, scheduling, and other considerations while design is underway.
Design-build changes that structure. The owner contracts with one design-builder responsible for both design and construction. The design-builder then contracts with the architect and trade subcontractors. That creates one point of responsibility for the owner and shifts responsibility for coordinating design and construction to the design-builder.
But that structure also means project teams need to think differently about when they establish design requirements, pricing, and risk.
Traditional Design-Build Moves Pricing Earlier
Traditional design-build can move quickly because the design-builder establishes its price earlier in the design process.
According to the webinar panel, pricing may be established when the design is approximately 20% to 30% developed. The design-builder must then account for what could happen as that design progresses. This includes:
- Design refinement
- Owner changes
- Material and labor price fluctuations
- Schedule changes
- Other conditions that were not fully defined when the price was established
“I have a huge contingency risk for all of that design refinement that happens on the back end.” Alisa Schneider
The less design information available at commitment, the more contingency the price tends to carry.
Traditional design-build can work particularly well when the owner’s requirements are already well defined. Examples that the panel pointed to include warehouses, self-storage facilities, repeatable retail spaces, and other projects without significant unique design elements.
Progressive Design-Build Brings Collaboration Forward
Progressive design-build maintains design-build’s single point of responsibility but changes what happens before the final project price is established.
Instead of establishing the price based on a relatively early design, the owner, design-builder, and architect collaborate as the design develops. The contractor can provide preconstruction services, including input on constructability, products, materials, and pricing, while the owner continues participating in design decisions.
The design can progress much further before pricing is finalized. In the webinar, the panel described pricing that may occur around 60% to 90% design development, depending on the project.
That additional development can reduce uncertainty around design refinement and create a more reliable basis for the project price.
It can also make progressive design-build particularly useful for complicated projects with multiple stakeholders. The panel identified health care facilities, laboratories, airports, infrastructure, bridges, and water or wastewater projects as examples where progressive design-build may be well suited.
For architects, progressive design-build can also preserve more of the iterative relationship with the owner.
“It’s putting the design back into design-build.” Donovan Olliff
Progressive Design-Build Is Not IPD
One distinction is worth making clear: Progressive design-build and integrated project delivery (IPD) are not the same project delivery method. Both may emphasize collaboration, but their contractual structures differ.
In progressive design-build, the owner maintains a single contractual relationship with the design-builder, and responsibility for design and construction flows through that entity. IPD uses a different contractual approach to align project participants.
Understanding that distinction matters when selecting contracts. Similar collaboration goals do not make the delivery methods interchangeable.
Design-Build Does Not Eliminate Change Orders or Disputes
Single-point responsibility does not mean single-point perfection.
“Another misconception about design-build is that it eliminates change orders. That’s just not true.” Alisa Schneider
Design-build may reduce certain design-driven changes, particularly with progressive design-build, but projects can still experience changes resulting from:
- Owner-directed scope changes
- Differing site conditions
- Changes to project requirements
- Ambiguities in the owner’s criteria
- Other unforeseen project conditions
Likewise, having one contractual relationship between the owner and design-builder does not eliminate disputes. It just changes where some of those disputes occur. The design-builder may instead be responsible for resolving issues with the architect, consultants, or subcontractors beneath it.
That makes contract coordination especially important.
Use Contracts Designed for Design-Build
Can you take a design-bid-build agreement, edit it, and use it for design-build? The panel’s answer was clear: Don’t.
“You should never mix and match agreements.” Alisa Schneider
Design-build combines responsibilities for design and construction within the owner-design-builder agreement. Design-bid-build divides those responsibilities among separate owner-architect and owner-contractor agreements.
Trying to convert one into the other can create gaps, overlapping obligations, and risks that have not been properly allocated.
Those gaps can have real consequences. The panel discussed the potential for unallocated risk, uninsured liabilities, and conflicting responsibilities when agreements are drafted independently or adapted from documents intended for another delivery method.
Keep the Contract Family Coordinated
Selecting the prime agreement is only part of the process. The agreements between the design-builder, architect, consultants, and subcontractors also need to work together.
“These documents are coordinated. They’re intended to be worked and used together.” Robin Banks
AIA Contract Documents’ 2024 Design-Build family includes agreements designed around those relationships, including:
- A141™ – Agreement Between Owner and Design-Builder
- A141PDB® – Standard Form of Agreement Between Owner and Design-Builder for a Progressive Design-Build Project
- B141™ – Design-Builder and Architect Agreement – Traditional Design-Build
- B141PDB™ – Standard Form of Agreement Between Design-Builder and Architect for a Progressive Design-Build Project
- A441™ – Agreement Between Design-Builder and Subcontractor
The benefit is coordination. The agreements use common terminology and allocate responsibilities across the contractual chain rather than treating each agreement as an independent document.
Standard Forms Can Make Risk Easier to See
The panel also explored the trade-offs between standard form and manuscript contracts. Custom agreements may allow an owner to address project-specific concerns. But heavily customized provisions can also shift significant risk to the design-builder.
That risk does not disappear. Design-builders may price it into their proposals. Architects and subcontractors may do the same. Certain parties may choose not to pursue the project at all.
Standard forms give project participants a common starting point for understanding responsibilities and negotiating modifications. They can also make potential insurance issues easier to identify.
For example, the panel discussed manuscript language that may require a design-builder to warrant design and construction work against errors or defects. If that warranty extends to professional design services, it may create obligations that are not supported by an architect’s professional liability insurance.
“The concept of insurability is very important for the architect. It’s important that whatever we agree to is covered by our professional liability insurance.” Donovan Olliff
Three Contract Issues Every Design-Build Team Should Review
When asked which contract provisions deserve particular attention, each panelist approached the question from a different stakeholder perspective.
1. Owners: Indemnification
From the owner’s perspective, indemnification can be particularly important because the design-builder has responsibility for both design and construction. Owners should understand what claims, costs, and liabilities the provision covers and how those obligations extend through the project team.
2. Architects: Insurability
For architects, the central issue is whether contractual obligations remain insurable. The panel highlighted three areas that deserve particular attention:
- Standard of care
- Negligence-based indemnification
- Limitation of liability
The goal is to make sure the architect’s contractual responsibilities align with the professional liability coverage available to support them.
3. Design-Builders: Separate Design and Construction Risk
The 2024 AIA Design-Build documents distinguish between the warranty applicable to construction work and the standard of care applicable to professional design services.
That distinction helps prevent a construction warranty from unintentionally becoming a warranty of professional design services.
What This Means for Your Next Design-Build Project
Design-build can simplify contractual relationships, encourage earlier collaboration, and create a single point of responsibility.
But those benefits depend on getting the structure right.
Before your next design-build project:
- Decide whether traditional or progressive design-build better fits the project.
- Understand how the delivery method changes each party’s responsibilities.
- Determine when design, pricing, and schedule commitments should be established.
- Review how risk flows from the owner through the design-builder to architects, consultants, and subcontractors.
- Use a coordinated family of agreements built for the selected delivery method.
- Review modifications carefully rather than assuming a familiar standard form remains unmodified.
And don’t overlook the project team itself. Design-build creates close working relationships, making the ability of the parties to collaborate an important part of project success.
One of the panel’s final recommendations was particularly simple:
“Pick your design-build partner very carefully.” Donovan Olliff
Watch Design-Build Best Practices: What Every Project Team Should Know
Hear the complete conversation about traditional and progressive design-build, contract selection, risk allocation, and common project challenges in the full webinar replay.
Explore AIA Contract Documents’ coordinated tools for drafting, reviewing, and managing design-build contracts across the project lifecycle.
Frequently Asked Questions
Design-build is a project delivery method in which the owner contracts with a single design-builder responsible for both design and construction. The design-builder typically contracts separately with the architect and trade subcontractors.
Progressive design-build uses the same basic owner-design-builder contractual relationship as traditional design-build but incorporates a more collaborative, iterative design and preconstruction process before the final project price is established.
A major difference is when pricing is established and how much the owner participates as the design develops. Traditional design-build may establish pricing around 20% to 30% design development, while progressive design-build can advance design further before pricing and provides more opportunity for collaboration among the owner, design-builder and architect.
No. Progressive design-build and integrated project delivery are separate project delivery methods with different contractual structures.
The panel advised against it. The contractual relationships and allocation of design and construction responsibilities differ substantially between the two delivery methods. Using agreements specifically developed for design-build can help avoid gaps and conflicting obligations.
No. Design-build may reduce certain design-driven changes, but owner-directed scope changes, differing site conditions and ambiguities in the owner’s criteria can still result in change orders.
