The Advantages of a One-Stop Shop

The design/build process benefits both clients and contractors.

In the commercial sector, design/build has long been the project-delivery method of choice. Builders and building owners alike have enjoyed the time and money-saving benefits of forging a single contract for architectural/engineering, design and construction services. Now, residential contractors have gotten into the design/build game, and again, both builder and client are pleased with the results.

With the traditional design-bid-build approach, a client commissions an architect to prepare drawings and then selects a builder through a competitive bidding process. With the design/build model (sometimes referred to as design/construct or single-source responsibility), there's a single point of responsibility for design and construction, as well as quality, cost and schedule adherence.

This type of one-stop shopping offers clients a number of advantages, says Mark Dixon, vice president and co-owner of Legacy Custom Building & Remodeling Inc., a design/build residential remodeling firm based in Scottsdale, Ariz.:

  • Faster, budget-tuned bids. When an outside design professional is involved, it can take two or three months to complete the design. Even then, the homeowners may discover they can't afford the project as designed after it's let out for bids. Then it's back to the drawing board. "This back and forth can go on for several rounds, eating up a lot of time," Dixon says. "When Legacy is done with the design, we can tell the client what the final costs will be."

  • Lower design costs. A design/build firm's usual fee structure is typically lower than an architect's fee: 2 percent to 3 percent of the construction cost, compared with a typical architect's fee of 8 percent to 10 percent. And architects often don't figure in extra costs, such as the need for demolition of an existing building on the site.

  • Higher value. Legacy helps its clients make design and material choices that are aesthetic but that also offer the highest value. "We know what materials are readily available," Dixon says. "We usually end up building 90 percent of what we started out with in our design agreement."

The design/build method also offers the remodeling contractor a number of benefits:

  • Committed clients. You will work with clients who have done their homework and are serious about working with your firm right from the beginning, instead of dealing with clients who shop different contractors.

  • Teamwork. You can establish a working relationship right from the beginning, knowing early on if things are going to work out with a particular client.

  • Guaranteed design fees. Many design/build firms have prospective clients commit upfront to construction, which is the main profit center for most contractors. This way, architectural fees are in the form of construction documents, with payments broken up into segments to cover such things as architectural, engineering and interior-design selections. If the client pulls out for any reason, the designer/builder receives some compensation for what work was done, and the drawings stay with the company.

  • More control. Builders are able to keep better control over change orders and expenses during the entire process. Since the builder is involved from the beginning of the design process, value engineering measures and realistic cost estimates can be incorporated right from the start. This prevents costly changes down the road. And constant feedback from the job site during construction can help the designer/builder stay on top of cost and quality control.

  • "Fast-tracking." Construction can begin while detail drawings are still in process. This can be especially help with such things as getting a foundation poured before the frost hits, while other product selections have yet to be finalized. And it allows plenty of time to line up your trades.

Here are some tips for anyone considering jumping into the design/build pool:

  • Don't try to wear all the hats. Delegate to those with expertise in particular parts of the project.

  • Develop contracts that include some level of compensation if the project isn't built, either by getting clients to commit upfront to construction or by charging a fair price for architectural services and drawings as a first installment, payable whether construction begins or not.

  • Dress like a designer and not a contractor — at least when meeting potential clients for the first time. It presents the right image and helps ease their minds.

  • Before hiring a staff architect right away, think about partnering with a local architect or one you have a good business relationship with to get a feel for the process.

  • Make sure all your business systems have fully integrated the design/build process before you make the switch in operations. Cost-tracking, billing, budgeting, forecasting, marketing and other regular functions will all have to be handled differently.

  • Talk to others in the design/build area for advice, and refer to professional and trade associations for further advice.

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