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  • Amerail Systems

Design-Build vs. Bid & Build

Updated: Oct 27, 2020

Save money, save time, save effort by knowing what method is best for you. When it comes time to renovate your hotel to meet PIP expectations you want to make sure you’re choosing the right design/construction method to do so.  The two most popular construction methods right now include Design Build and Design Bid Build. To choose which method is best for you we need to examine the details of each. Design-Build Easily the most cost & time effective method available where the hotel owner hires one company who is able to handle the design and construction under one contract. Some or all of the design & construction responsibilities are handled by the design-build company or subcontracted out. This method requires a high amount of collaboration between the design & construction areas while the single company bears the risk rather than the owner. We broke Design-Build down into 5 sections outlining the method: 1. Single Source of Accountability The design/build approach provides a single source for your entire project compared to the classic design-bid-build method where the owner must: Select an architect/designer, finalize the design, bid the project, select a contractor, and then act as an intermediary. The design-build method fosters teamwork and lends itself to cooperation. The relationship built during the design phase helps to ensure that the stage is set for a successful construction project.  

2. Value Engineering Discussing budget during the design phase (and not waiting until the bids come in) helps to keep the projects within a realistic budget. Communicating the cost implications of design decisions ensures that the owner plays a key role in arriving at the final project price. Once the scope of work has been finalized, the project costs are clearly defined and controlled by the design/build firm.

3. Enhanced Communication Specific design and construction details are being developed throughout the entire process and the focus stays on owner “value”.  The communication benefits of working with a design professional and a construction expert at the same time ensures that potential problems are discovered before the project starts. 4. Faster Project Completion Design-build projects can be completed in a shorter amount of time because Bid time is reduced, scheduling for the project can begin before the design is finalized, potential construction problems are uncovered early and enhanced communication keeps everything moving. 5. Quality Control The design-build method helps to remove ambiguity that may arise in material and construction specifications.  Since the designer, engineer and builder are from the same firm, the focus remains on protecting the client's interest. Bid & Build This method splits the design and build contracts between different companies instead of one. Each company has specific responsibilities for example, the design firm delivers 100% completed design documents. The hotel owner then chooses between bids from contractors who will carry out the designs into finished products. In this method, the owner will be responsible for all the risks while the designers and contractors have no obligation to each other. We broke Bid & Build down into 3 sections outlining the method:       1. Multiple Parties Involved In the Design-Bid-Build delivery, the owner contracts separately with the design firm that produces the construction documents, and the builder that physically renovates the hotel. The design team works directly for the owner, and produces a set of construction documents that are used as the basis of the bidding process.       2. Ease to Ownership The Design Bid Build method is beneficial for owners who do not have particular expertise in exterior renovation projects. Since each phase of the project is distinct, theoretically, the process is more linear and easier to follow. Depending on the organization, having two separate contracts, with the architect and the general contractor, could either limit or increase liability. The owner serves as a mediator for any design and construction issue that occurs for each party.       3. Potential Higher Costs The owner uses a good amount of project funds in the design phase, before getting a firm price on the actual construction phase. Potential vulnerability to change orders, delays, and additional costs initiated by the contractor because the general contractor isn’t normally on board early in the process, they aren’t able to give feedback during the design process. To determine which method to choose, owners should carefully analyze their: 

  • Budget

  • Capacity and technical capability to closely manage the process 

  • Individual project drivers  

  • Sensitivity to the cost and schedule escalations  

  • Degree of comfort with bearing project risk


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