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Design/Build vs. Competitive Bid Process
What’s the difference between a competitive bid and a design/build contract? These are the two most common paths you’ll encounter when considering a remodeling project, and the outcomes are very different. One isn’t necessarily better than the other, but each has its own pros and cons that must be considered before making a final decision. The following is a comparison of the two basic options you have when planning a remodel or other construction project.
A design/build process makes one entity responsible for the design and execution of the entire project. The design/contractor team works on behalf of the Owner to create and execute the project from beginning to end. The Owner typically commits to this process before serious design work begins. This process should by no means remove the responsibility of the design team to develop a complete and understandable set of construction documents before work commences.
- A seamless transition of responsibility. There’s no question as to who is responsible for a detail or process because everything is handled under one roof.
- The budget is developed alongside the design, which means the right design is created for the desired budget.
- Design costs are typically lower than with Competitive Bid.
- The designer has a greater responsibility to the budget than if he or she was just responsible for design, not execution.
- The contractor has an incentive to provide technical solutions for jobsite issues and value engineering during the design phase.
- You lose the ability to compare one bid with another.
- You may feel “locked in” to a single source.
- Some people are more comfortable keeping the design and contract elements separate.
- You can’t discuss different ideas with a third party.
- The design/build process can be used with a time and materials construction agreement as a way to start work prior to having a clear scope of work completed and approved. While this can be successful, it also opens the door to the possibility of rework, delays and additional expenses.
A competitive bid process is good if you have a complete and clear set of drawings and specifications, meaning all bidders will submit their bids based on the same information. The person or firm preparing the construction documents is normally excluded from being a bidder for the execution of the work. This keeps the bidders confident that they’re bidding fairly against others who have the same information and allows the Owner to keep the designer/architect available for an unbiased analysis of the different quotes. Sometimes, the person preparing the construction documents will continue with the project in an administrative capacity after the contract is awarded, but this isn’t always the case.
- Owner is able to compare costs and evaluate multiple bids based on a defined scope of work.
- Assumes the competitive nature of bidding brings about the best price for the same work.
- Owner can evaluate various contractors’ business styles to see if they mesh with their own.
- Keeping the designer/architect separate from the contractor can give the Owner a knowledgeable advocate who can help them work through questions and concerns.
- Some contractors will bid strictly to what is included in the drawings and then submit change orders for things that aren’t clearly stated. Others will “fill in the gaps” that their experience tells them will need to be addressed, which makes an “apples to apples” comparison more difficult than it should be. Often times, the lowest bid is not the correct bid.
- If you select a contractor based on price alone, there’s a risk that the product will only meet a minimum standard, not the standard you originally expected.
- The design team may not be as up-to-date on current costs. If all bids come in too high, the cost and delay to redesign to budget will fall to the Owner.
- Keeping the designer separate from the contractor can create conflicts if the documentation isn’t clear or complete.
- Costs to get truly complete drawings can be prohibitive, especially for smaller projects. (Note: No set of drawings can cover all potential aspects of a project. There will always be grey areas.)