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HOME » REFERENCE » INDUSTRY TERMS » Design-Bid-Build

Design-Bid-Build

Design-bid-build is the traditional approach to construction. The owner secures the services of an architect to design a project. Once the design is 100% complete the project is then put out for bids from general contractors. Typically in this arrangement the owner will select the contractor with the lowest bid and award the contract to that entity. In the private sector, the owner is not obligated to select the lowest bid and the owner is not obligated to offer this opportunity to the universe of general contractors. If the project is a public project, the owner is obligated to secure sealed bids and award the contract to the lowest responsive bidder. In the public sector, the owner can also prequalify contractors. Through this two-step process the owner will seek qualifications based on information from the prospective bidders and then only allow those who prequalify to submit sealed bids. Pursuant to this process, generally the public entity will establish a scoring system for prequalification. The private owner is not required to publish or advertise its solicitation, and can predetermine that it will only receive bids from a select group of contractors.

There are many advantages to the traditional design-bid-build process; however, some owners have been persuaded that because you cannot commence construction until the design documents are 100% complete, that the design-build alternative is better. Some owners feel the design-bid-build process means a more expensive project it takes longer that it costs more than the alternative of design-build. One distinct advantage of the design-bid-build approach is that parties are familiar with it and understand their roles. In the design-bid-build delivery method, the owner holds separate contracts with the architect and the general contractor. The general contractor has contracts with the subcontractor and the suppliers. The architect will likewise hold contracts with design consultants. If there is a problem due to a design defect, the contractor may have a claim for a change order. If so, the owner will then have a claim against the architect.

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