Design-build or architect plus contractor: which is right for your project?

Neither method is better in every case. Design-build puts design and construction under one agreement with one firm, so a single party answers for the result and a price can be agreed early. Hiring an architect and a general contractor separately gives you a designer who works only for you and the option of a price based on finished drawings, and it leaves you managing two contracts. The right choice depends on how settled your requirements are, how closely you want to direct the design, and when you need a firm price.

What is the difference between design-build and hiring an architect and a contractor separately?

The difference is the number of contracts you sign. In design-build, the Design-Build Institute of America (DBIA) explains, one entity, the design-builder, enters into a single contract with the owner to provide both design and construction services. In the traditional arrangement, known as design-bid-build, the Primer on Project Delivery published jointly by the American Institute of Architects (AIA) and the Associated General Contractors of America (AGC) describes three parties and two separate contracts: owner with architect, and owner with contractor. AGC's definition adds that in design-build one entity is the single point of responsibility for both.

The AIA's standard contracts follow that split: its contract document families include a Conventional (A201) family for separate design and construction contracts and a Design-Build family, centered on document A141. It also publishes a Residential family for single-family homes, which covers either arrangement, and an Interiors family for tenant improvements.

A design-build project still has an architect, but the architect's agreement is with the design-builder, not with you. The primer notes that the design-build entity can be led by an architect or a contractor.

To confirm: which design work Noble's Crest does in-house and which it engages outside architects and engineers for.

What are negotiated contracts and construction-manager arrangements?

They are versions of the two-contract approach in which the builder is chosen on qualifications and fee instead of the lowest bid, usually before the drawings are complete. The AIA and AGC primer lists direct negotiation, in which a contractor is selected on reputation, experience or past performance and the fee or total cost is negotiated, as an alternative to low bid.

In construction management at-risk, the primer explains, a construction manager is typically hired during design, provides services such as cost models, scheduling and advice on the cost of design decisions, and then takes on the obligation to build, frequently under a guaranteed maximum price (GMP). AGC defines the method by two features: design and construction are separate contracts, and the builder is selected on factors other than lowest total construction cost alone. The AIA distinguishes this from a construction manager as adviser, who advises the owner without holding the trade contracts.

Who holds which contract, and who carries which risk?

In design-build the design-builder is responsible for both the design and the construction, while with separate contracts that responsibility is divided and the owner stands between the two.

• Separate architect and contractor. You sign one agreement with the architect and another with the contractor. In the AIA's Conventional family, the architect's agreement (B101) runs from design through construction contract administration, so the architect, though not a party to the construction contract, has duties during construction. The contractor prices and builds what the documents show. The primer observes that a lump-sum bid is the lowest cost for the documents as prepared, which may not be the lowest cost for the project.
• Construction manager at-risk. The contracts are the same two, but the construction manager holds the trade contracts and takes the performance risk for construction.
• Design-build. You sign one agreement, and the design-builder answers to you for both design and construction. You have no direct contract with the architect, though the AIA publishes a separate agreement for an owner who wants its own consultant. Your main exposure is the brief: under A141 the design-builder must design and build to the Owner's Criteria unless they are changed in writing, and the AIA's instructions advise making them as explicit and detailed as possible.

How do pricing and changes work in each?

With separate contracts the price normally follows the drawings, and in design-build it is agreed against your criteria and a preliminary design.

The AIA's conventional owner-contractor agreements show the options: a stipulated sum, meaning a fixed price (A101); the cost of the work plus a fee with a GMP (A102); or cost plus a fee without a GMP, for work whose cost is not fully known at the start (A103). The AIA states that A102 and A103 are not intended for competitive bidding, which makes them the forms for negotiated work.

Under A141, the owner supplies the Owner's Criteria, the design-builder develops a preliminary design and a price proposal, and the two sign a Design-Build Amendment that sets the contract sum, either as a stipulated sum or as the cost of the work plus a fee, with or without a GMP. The primer notes that the timing of a GMP varies by project in both design-build and construction management at-risk, and advises weighing how much design information and contingency stand behind the figure.

Under A201, the AIA explains, a change order is signed by the owner, architect and contractor and adjusts the price, the time or both, while a construction change directive lets the owner order changed work to proceed before its cost is agreed. In design-build the same discussion is with one firm. Starting construction before the design is finished, which the primer says is most likely in design-build and construction management at-risk, shortens the schedule but locks in some design decisions early and makes later changes difficult and costly.

When does each method suit a project?

Design-build suits a project when one accountable party and an early price matter most, and separate contracts suit a project when independent design or a price on finished drawings matters most.

• Design-build fits when you can state your requirements clearly at the start, when a date such as a lease commencement drives the schedule, or when you prefer a single agreement. DBIA, which advocates for the method, lists faster delivery, earlier knowledge of firm costs, and fewer changes and claims among its benefits.
• A separate architect and contractor fits when the design is the priority, when you already have an architect, or when you want bids you can compare on the same drawings. The primer's typical characteristics of design-bid-build include well-established roles, complete specifications that produce clear quality standards, and details agreed by all parties before construction begins.
• A negotiated contract or construction manager fits when you want both: your own architect, and a builder's cost and schedule advice while the design can still change.

The AIA and AGC state that their primer is not meant to endorse any one method over another. Noble's Crest works both ways, under a design-build agreement or from drawings prepared by an owner's architect.

What should you ask before choosing?

Ask each firm the same questions about contracts, design responsibility, price and changes.

• Who signs the contract with me, and who holds the contracts for design and for the trades?
• Who is the architect, and is their agreement with me or with the builder?
• What is the price based on, finished drawings or criteria and a preliminary design, and when does it become fixed?
• Is it a fixed sum or cost plus a fee with a guaranteed maximum, and what happens to savings below the maximum?
• How is a change priced and approved, and who signs it?
• Who checks the work against the drawings during construction?
• Which standard form of agreement do you propose?

The AIA notes that some states may restrict design-build through laws on architectural registration and contractor licensing, so confirm that any firm is licensed for the role it proposes, and have an attorney review the agreement before you sign. This guide is general information, not legal advice.

To confirm: the contract forms Noble's Crest uses for each delivery method.