Design-Build vs. Design-Bid-Build Project Delivery

October 30, 2023
Detail Engineering & Design
Fabrication & Construction
Front-end Planning
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An early and vital decision that has to be made for any capital project is the owner’s selection of a project delivery system that will be utilized to execute the project. This decision ultimately influences the language of the contract, the timing of its signing, and the overall framework for work execution.

Two of the most commonly used delivery systems are design-build and design-bid-build. Below, we detail everything you need to know about design-build vs. design-bid-build, including key differences, the benefits of each delivery system, and how to choose between the two.

Design-Build vs. Design-Bid-Build: Key Differences

Design-build—also known as EPC (engineering, procurement, and construction)—is a delivery method in which a single design-build company works under a single contract with a project owner, providing all design and construction services. This entity will assume full responsibility for the project’s design and construction aspects. The early and frequent collaboration between estimating, engineering, procurement, and construction teams is a key defining factor for this method. 

This collaborative structure established from the project’s outset plays a pivotal role in its success. Adjustments can be made more easily through ongoing interactions between teams, reducing the likelihood of project disruptions. 

Aspect Design-Build (EPC) Design-Bid-Build
Contract Single contract with owner Separate contracts
Collaboration Early collaboration Limited collaboration
Scope Definition Owner's high-level reqs. Owner outlines scope
Responsibility Design-build firm Separate design/construction
Project Size Complex/larger projects Small capital projects
Efficiency Streamlined process Sequential process
Risk Allocation More risk on firm Owner retains more risk
Change Management Flexibility in changes Changes may be challenging
Communication Clear communication Potential for gaps
Decision-making Faster with integrated teams Longer due to coordination
Quality Control Enhanced quality control Within design/construction
Design Changes Easier integration More complex/time-consuming
Owner's Role More involvement Less until after design

Design-Bid-Build: The Traditional Delivery Method

Design-bid-build is a traditional delivery method that is particularly popular for small capital projects. Typically, in this approach, the owner outlines the scope of the project, which serves as a foundational reference point for subsequent phases before bidding detail engineering and design. The result of detail engineering and design is an Issued for Construction (IFC) package that is used to bid construction. 

Once the construction bid is awarded, the general contractor, subcontractors, and material vendors carry out the build per the design specifications. While this approach provides a traditional delineation between design and construction phases, it can lead to extended project timelines due to the sequential nature of its execution. 

Further, the design-bid-build approach places a greater level of design-related risk on the owner, who must navigate potential discrepancies and make adjustments within the framework of their design specifications. Accommodating design modifications during construction phases can introduce unexpected complexities that increase costs and schedule disruptions. 

Understanding the Benefits of Each Delivery System

Each project delivery system has unique benefits for project owners. However, it is important to understand that both approaches can be highly successful with proper pre-project planning, scope definition, and execution strategy. 

Here are some of the top benefits for each delivery system:

Benefits of Design-Build Benefits of Design-Bid-Build
  • Competitive bids at each phase 
  • Risk transference from project owner to design-build contractor
  • Distinct roles and responsibilities for design and construction
  • Linear and easy-to-understand process
  • Streamlined communication
  • Scheduling is straightforward, as project phases are sequential 
  • Reduced management efforts
  • Higher level of active owner involvement and participation (if this is preferred by the project owner) 

Choosing Between Design-Build vs. Design-Bid-Build

To provide a bit of context around the use of these two delivery systems for capital projects in practice, let’s take a quick look at findings from a Construction Industry Institute (CII) study assessing the performance of owner- and contractor-submitted capital projects that used either design-build or design-bid-build:

  • In terms of cost, design-build projects were approximately four times larger than design-bid-build projects on average.

Owner-Submitted Data  

  • Cost performance was better for DB projects than it was for DBB projects.
  • Projects using DB consistently demonstrated better schedule performance.
  • For changes, rework, and practice use, DB projects clearly had the advantage over DBB projects.

Contractor-Submitted Data  

  • No difference in cost performance was observed between DB and DBB projects.
  • Projects using DBB achieved better schedule performance than projects using DB.
  • For changes, rework, and practice use, DB projects usually outperformed DBB projects.
Performance Advantage Observed in Survey (X) Owner Contractor
Cost Performance X
Schedule X X
Changes X X
Rework X X
Practice Use X X

As previously mentioned, both design-build and design-bid-build delivery systems have benefits—deciding between the two depends on owner preference, project size, and inherent driving factors such as schedule and budget. Below, we have provided a few examples of situations in which design-build and design-bid-build may benefit project owners.

Situations Well-Suited for Design-Build

  • Schedule-driven capital projects with tight timelines
  • Large-scale, high in complexity, private-sector capital projects

Situations Well-Suited for Design-Bid-Build

  • Capital projects that are not driven by tight timelines
  • Capital projects in which the owner has the expertise, infrastructure, and manpower to oversee the project
  • Small-scale capital projects that are standards, repetitive, and low in complexity
  • When there is a strong desire for competitive bids at each phase 

Every capital project is unique and has varying levels of complexity, different driving factors, and different owner preferences. While these above situations can serve as general guidelines for choosing between design-build vs. design-bid-build, both approaches can result in successful capital projects if the right contractor(s) and industry best practices are utilized. 

Look for contractors with strong industry-specific expertise, experience with the area and type of work being performed, robust project management and project control capabilities, and a history of successful project execution.

Your Capital Project, Your Way 

At H+M Industrial EPC, we have more than 35 years of experience providing leading capital project management services to the energy, chemical, terminal, and logistics industries. Whether your project requires a design-build approach or a design-bid-build approach, we will work closely with you to drive your project to success—on budget and on time.

About the Author

Want to Learn More About Project Management?

To find out more about working with H+M Industrial EPC, an industry-leading EPC contractor, to successfully execute your project using the best delivery method for your needs, deciding between a design-build vs. a design-bid-build approach, contact us through our website today. 

To find out more about the advantages and disadvantages of turnkey projects and how H+M Industrial EPC can meet your capital project needs, contact us through our website today.

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The H+M Industrial Team

For over three decades, we have provided best-in-class capital project management services to Energy and Chemical industries through our proven EPC approach. We are dedicated to providing trust, experience, and efficiency through all stages of engineering, procurement, and construction--on budget and on time.

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