Anyone who has spent time working in the UK construction industry is likely to have strong views on design-build contracts. For the foreseeable future, activity within the sector is likely to pick up, and while the exact political tone of the Conservative government has yet to be confirmed, they have at least promised to invest heavily in house building. With that in mind, the following points highlight some of the thorny issues associated with design-build contracts.
uk house building
200,000 seems to be the magic number; In March 2015, David Cameron committed to doubling the target of 100,000 first-time buyer homes, and with his position now confirmed at 10 Downing Street we look forward with bated breath to see if this commitment comes to fruition. Across the UK, businesses are seeing a modest increase in construction projects and reporting some confidence. In addition to the always nebulous assertions from politicians, a series of measures including loosening planning laws and assistance for first-time buyers is boosting the industry after last year’s lack of growth. For many developers, however, the fact that increased demand for labor and materials is likely to drive up prices can make design-build contracts more attractive.
Design and Construction Advantages
design and construction [D&B] is a useful acquisition avenue for developers, as it allows a degree of control over costs. Lump sum contracts generally result in a contractor agreeing to take responsibility for both the design and construction of a project for an agreed upon price. The contractor may have their own team of designers or may hire an outside company. They will agree on a design initially with the developer, but after the contract is signed, the contractor will take full responsibility.
If the agreed design remains unchanged throughout the project, the developer can be reasonably sure that the total cost of construction will remain unchanged. Of course, the developer may require some design changes during the project, but then it should be possible for the contractor to provide an illustration of exactly how such changes will affect overall costs.
Another advantage of design-build contracts is the possibility of reducing construction time. If the contractor is fully responsible for the design, a great deal of time can be saved, since the design and construction elements will be executed simultaneously. For developers, the main benefit is that once the contract is agreed, the contractor assumes much of the financial risk inherent in a project; That’s increasingly attractive when prices for both labor and materials are likely to rise. When various political parties claim that a construction rebound is just around the corner, it’s worth remembering that it’s not just the taxpayer that is expected to contribute. The Conservative government will also have to rely on private investment.
Design and Construction Disadvantages
Not everyone in the industry is a fan of design-build contracts, and therefore it’s worth taking a look at their downsides. Those who don’t like the system point out that if a builder has a free hand to design a building based on a pre-agreed price, even if costs don’t increase during the project, they are likely to work to the lowest possible specifications. . [if the contract allows them to alter the specifications].
Second, there is an inherent problem that builders are not architects. An architect, in addition to having years of training and a very specific set of skills, especially aesthetic, will be up to date with legal and design requirements. There are also requirements that may not be written into law, but will be at the forefront of what makes a building fit for purpose now and for years to come. Giving a builder a set amount of money and most if not all design responsibility is a recipe for a shoddy result, some people say.
Making generalizations about the merits of D&B versus traditional construction methods is dangerous. In the real world, both can result in some buildings being successful and others being a disaster. For developers, architects, and contractors, perhaps the most important point is to ensure that the contract, whatever form it takes, is fully understood by all parties, covers all legal requirements, and has the built-in flexibility to allow for a successful outcome. .
construction management
There has recently been some trend towards construction management rather than design-build contracts. Here, an intermediary in the form of a construction manager is appointed, and the developer takes more responsibility for the overall costs of a project. However, it is possible that if private investors are forced to take more financial risk, the money supply for the promised home-building boom could begin to dry up.
