When to Use Design Build

March 4, 2024
Front-end Planning
Detail Engineering & Design
Fabrication & Construction
Procurement

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In the construction industry, the design-build is an often-used project delivery method.  Also known as EPC (engineering, procurement, construction), the design-build approach lets a single team complete the project from scope development to construction, thereby ensuring improved project delivery performance in terms of cost, schedule, and quality.

However, to realize the benefits, project owners and contractors must understand when to use the design-build method and its suitability for schedule-driven projects. Below, we describe project scenarios where a design-build approach might be preferred and the benefits of choosing the right EPC contractor to execute a capital project.   

Key Takeaways

  • Best for Large Projects: The design-build method is commonly more effective for larger, complex projects.
  • Cost Effective: Design-build is cost-effective because it provides a more predictable cost framework and reduces the risks of schedule overruns. Further, the unified approach reduces the need for changes and rework.
  • Faster Construction: This method supports faster project completion due to integrating design and construction phases under a single contract.
  • Quality Control: Design-build offers more flexibility in project execution and quality control due to having a single source of accountability.

When Should Design-Build be Used?

The design-build method offers a unified design approach under a single contract, which can be especially beneficial in certain situations, such as with larger, complex projects. However, the decision to use this method will be influenced by several factors. We've compared the design-build and traditional methods below to highlight their respective advantages.

Design-Build and Traditional Method Comparison

 

Design-Build Method

Traditional Method (Design-Bid-Build)

Project Size

Suitable for larger, complex projects

Preferable for smaller, less complex projects

Project Definition

Requires detailed upfront scope development

Scope developed in phases, often resulting in changes

Cost Control

Predictable cost framework with minimized overruns

Potential for cost growth due to sequential bidding

Schedule Control

Reduced schedule risk with overlapping phases

Higher risk of schedule delays due to sequential phases

Construction Speed

Faster construction due to integrated design and build processes

Slower, as construction starts only after completed design and bid process

Scope of Changes and Rework

Lower risk of changes and rework due to unified team approach

Higher risk of changes, often requiring halts for RFIs and redesign

Flexibility

Offers more flexibility in project execution

Less flexible, as each phase must be completed before the next starts

Quality Measures

Consistent quality due to single source of accountability

Quality can vary, dependent on different contractors for each phase

Determining When to Use the Design-Build Method

Through a design-build contract, a project owner delegates all design and construction responsibilities to a single team to minimize the risks of cost and schedule overruns while ensuring consistent quality through all project stages. 

By hiring an EPC contractor early in the process, the design-build approach significantly reduces change management challenges that are otherwise inevitable in traditional project delivery methods due to the lack of alignment between the separate design and construction companies involved.

Let’s look at some of the key aspects of an industrial project that help project owners and contractors determine when to use the design-build method.

Project Size

Though projects of all sizes can benefit from the design-build method, larger projects are typically most suited for applying the approach due to their complexity and schedule-driven challenges. 

Project Definition 

For any type of project, it is important to develop the project scope in as much detail as possible to get it to a basis on which it can be bid for design-build. Because design-build projects supply a price for detailed design through construction, front-end development must be performed to allow for a reasonable cost estimate.  

Cost Growth

Unlike conventional project delivery methods in which the project is executed in a specific sequence (detailed design → procurement → construction), requiring bidding between phases, the design-build approach notifies the project owner of the total costs of a project upfront and the overall costs across all stages, thereby making it easier to calculate the ROI

As a result,  design and construction cost growth are often lower using the design-build method, making it a highly beneficial project delivery system for capital projects. Typically, in design-bid-build, the project's cost will not be certain until the detailed design is complete and the package is bid out for construction costs. 

It’s important to note that because project costs are estimated before design completion, contingency is added to cover unknown quantity effects that may occur during the detailed design process. 

Schedule Growth

The design-build method is pushed heavily when the project is schedule-driven. Using the design-build approach's overlapping project phases, a contractor can lay out the project more easily to fit the schedule. According to the Construction Industry Institute (CII), compared to the design-build approach, the design-bid-build method has increased design and construction schedule growth and has the potential for increased risk for projects with tighter timelines.  

Construction Speed

For project owners who do not have a lot of construction management or engineering support, managing multiple contractors is a challenge that often leads to frequent change orders, resulting in cost and schedule overruns. Among all project delivery methods, the design-build approach has the highest design and construction speed, owing to the single source of accountability that lets the design-build contractor fix issues without relying on other contractors. The faster construction speed translates to a lower cost impact for project owners.    

Scope of Changes and Rework

In traditional project delivery approaches with siloed engineering and construction teams, changes and rework often require construction to be stalled so a Request for Information (RFI) can be submitted and solutions can be considered. In a design-build approach, because there is a single source of accountability throughout all project stages, the risk for change orders is reduced because all teams work together to define the project scope, schedule, and costs in as much detail as possible.

Flexibility

Suppose a project isn’t necessarily schedule-driven and the project owner has the necessary manpower. In that case, the design-bid-build approach is an excellent option for project execution, particularly for smaller projects. However, project stages can often be overlapped in a design-build approach, creating more schedule and execution flexibility. Contractors with in-house procurement, design, and construction teams can begin installation at the job site while other parts and equipment are still being fabricated. This can significantly reduce the project timeline and help mitigate any financial risks. 

Quality Measures

Consistent quality through all stages of a capital project is critical for a successful outcome. Because the design-build method utilizes a single source of accountability, quality standards are set across the design, engineering, and construction teams. This ensures the contractor can meet and maintain a project's performance and quality requirements throughout its life cycle

Implementing the Design-Build Method with the Right Contractor

The success of a project using the design-build method primarily depends on the contractor. A design-build company with in-house construction capabilities can ensure consistency between the design and construction teams while reducing the risk of cost and schedule overruns.  

H+M Industrial EPC specializes in providing exceptional capital project execution from concept to start-up for clients in Houston, South Texas, and Corpus Christi, TX, USA. For over three decades, we have provided end-to-end solutions for a wide range of project sizes within the energy, chemical, terminals and logistics industries. 

We are dedicated to providing trust, experience, and efficiency through all stages of engineering, procurement, and construction through our proven strategic EPC approach. Our comprehensive services, including detail engineering and design, procurement, fabrication, and construction allow us to take your project from conception to completion, tailoring engineering and design solutions to meet your unique needs.

About the Author

Want to Learn More About Project Management?

To learn more about when to use the design-build project delivery approach and how H+M Industrial EPC can help you improve project outcomes, contact us 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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