Design-Bid-Build v. Design-Build
by Danielle Maya, Cotney Construction Law
(Editor’s Note: Danielle Maya is a partner at Cotney Construction Law and has over 20 years of experience as an attorney. Cotney Construction Law is an advocate for the roofing industry and General Counsel of Western States Roofing Contractors Association. Maya can be reached at (866) 303-5868.)
When it comes to deciding what project delivery method (PDM) to use, an architect should carefully consider the risks involved. The two most common PDMs in the United States are the Design-Bid-Build and Design-Build. Each of these methods comes with different benefits and risks, therefore the method you choose should be tailored to the project requested. As an architect, do you know the different liability risks between Design-Bid-Build and Design-Build projects?
Design-Bid-Build, the most common PDM used in the United States, is where the owner contracts separately with an architect and contractor. The architect or design firm is hired by the owner to design and deliver complete design documents of the proposed project. The owner then bids out the job and hires a contractor to build the project according to the design documents. Here, the architect’s exposure is to the owner since that is the only party with whom the architect has a contract.
Under the Design-Bid-Build method, architects could face liability with defective or incomplete plans and specifications. The courts do not hold design professionals responsible for all the adverse consequences that may occur in a project, nor does the law expect every design to be flawless in every respect. In articulating the design professional’s liability, the courts do not hold design professionals strictly liable. Instead, the law only imposes liability when they have breached their standard of care. The standard of care for architects is the standard that would be followed by a reasonably prudent architect under similar circumstances. If the owner and design professional do not wish to leave the standard of care to be decided in accordance with common law, they can agree to a standard in the contract.
Architects can disclaim liability in Design-Bid-Build projects. A common disclaimer is where the architect disclaims any responsibility for the construction means, methods, techniques, sequences, procedures, and safety programs and precautions. Additional disclaimers can also include any express or implied warranties that the plans and specifications are without error. However, the enforceability of disclaimers depends on the law where the dispute is resolved. Some courts hold that design professionals cannot disclaim implied warranties.
The Design-Build method is where the owner typically hires a single entity to perform both design and construction under a single contract. This method puts the sole responsibility for any problems on the design/builder and combines the risks that each party would normally assume separately under the Design-Bid-Build method. However, this method should have reduced risk since both the designer and builder entity are involved throughout the design and construction of the project so they will be motivated to work together, which should result in fewer change orders and disputes.
Under the Design-Build method, an architect will likely become responsible for all aspects of a project since it is working as a joint venture with the contractor. Due to the increased potential liabilities, the Design-Build contracts should be carefully evaluated. It is essential that each party’s responsibilities and obligations are clearly defined under the contract, which will help avoid misunderstandings as to who is responsible for each task. Careful attention should also be paid to indemnification clauses, limitation of liability provisions, construction observation requirements, and dispute resolution methods. Architects should not take on more responsibility than is necessary, so reviewing the contract cannot be taken lightly.
In either the Design-Bid-Build or Design-Build methods, one of the most important steps is to review and draft carefully a contract that reflects the architect’s true intentions, and reduces liability wherever possible. In whatever method you decide to use, it is in your best interest to contact a local attorney to determine the legality of the contractual provisions or disclaimers according to your local jurisdiction. An attorney can give you a strong strategic advantage, because a well-drafted contract could be key to deciding who is liable for a dispute or problem.