Everything Contractors Need to Know About Design-Bid-Build Projects

Out of all the jobs you’ve worked on, there’s a good chance several (if not most) of them have been Design-Bid-Build. Simple, straightforward, and cost-effective for owners, DBB is the default project delivery method for the construction industry under the AIA.

And while it may be the most common project delivery method, that doesn’t mean it’s always a cakewalk. In this guide, we’ll explain how the DBB process works, along with how to know if it’s a good fit for your business.

Key Takeaways

• Design-bid-build is one of the most common project delivery methods you’ll encounter in construction. Generally speaking, it’s a very linear, static process, especially if the design has already been completed.
• The bidding process for DBB jobs can be more competitive than other contracts, which allows owners to fetch lower prices.
• Because of how rigid the process can be, it’s not uncommon for disagreements between design teams and contractors to pop up, which is why DBB demands good communication.

What is the Design-Bid-Build Project Delivery Method?

Considered the traditional organizational structure for construction projects, the Design-Bid-Build (DBB) method follows three stages. Once a design is completed, the project is sent out to bid and then the project is built. It’s a very linear, one-thing-at-a-time approach, which allows owners to be fully involved in each stage.

Owners using DBB will have separate contracts with a designer and contractor for the project, giving them greater control (and input) during each phase.

The Design-Bid-Build Process

This method allows for each step (design-bid-build) to be completed before the following begins. Once a project owner creates their vision, they’ll hire an architect to lead the design and conceptualization of the entire project. During this phase, the architect will coordinate with all of the necessary consultants to complete the construction drawings and documents. After these are completed, it’s time to bring contractors onto the project.

The Bidding Phase

Now contractors can bid on the design documents, making sure to take into account all the necessary trades involved. Here’s where you’ll often go back and forth with the owner to hone in on scope and hard numbers for change allowances/contingencies. After this, the owner will review the bids and select a GC.

During the bidding phase, you’ll rely heavily on your pre-construction and estimating team to make sure you qualify all of their internal requirements during the selection process (insurance, project list, NDAs, etc.).

Along with the construction drawings, the construction bid package will include construction specifications, project requirements and information on the landlord/site for your team to review.

To win in this highly competitive bidding process, you’ll need to understand all your labor and equipment needs/costs as you solicit bids from subcontractors for portions of the scope of work you can’t self-perform. While some owners may ignore any red flags and simply choose the contractor with the lowest bid, many will opt to balance cost-effectiveness with proven experience.

Navigating the Construction Phase & Change Orders

If you’ve won the contract, you’ll now move forward with the original schedule for the construction process that you gave the owner during the bidding stage. Here’s where you’ll start signing on subcontractors and begin the procurement process.

One of the nice things about DBB is that there are typically fewer change orders needed, because the bidding phase fully encapsulates scope. In fact, several studies have shown that DBB projects have 6 to 9% fewer change orders during the construction phase.

Instead of starting with unknowns, your scope will be fully vetted, with the goal of removing allowances and contingencies. Of course, change orders can still happen if the owner decides to make design changes or adjust the scope (bearing all the risk).

Pros and Cons of the Design-Bid-Build Method

Every project delivery method has its advantages and disadvantages, and DBB is no different. Depending on how you like to work, it could be a good fit. Before you decide to place those bids though, make sure you understand the full picture.

Pros of Design-Bid-Build:

• Clear delineation of roles - Since each step follows the other, the architect/designer and the contractor each know their specific priorities. This allows the owner to stick to deadlines and follow up with certain tasks as needed.
• The bidding process creates an even playing field – While DBB pits contractor vs. contractor, the fact that everyone is bidding the same set of drawings creates the opportunity for fair bidding. Throughout the process, you’ll be able to evaluate your quotes and take advantage of cost-saving opportunities.
• Owner has more control – Since the contract documents between the design team and the contractor are directly with the owner, they can provide more oversight during each project phase. If you’re working with a proactive owner who understands budget and schedule, this can facilitate a great working relationship.

Cons of DBB

• Timelines can be extended - Because each party needs to complete their task before the next one begins, there’s always possibility of the project being delayed. For example, if the architect is late on delivering the construction documents and contractors are provided a three-week deadline for their bid, the build stage will also be delayed three weeks.
• Costs are not known at the onset – While this doesn’t impact you initially, this project delivery method doesn’t allow for the owner to know the true cost of a project until the bidding phase begins. They can work with an estimating firm to get a rough order of magnitude (ROM) costs for the project, but they won’t have accurate numbers until bidding is completed.
• Approvals aren’t imminent – Because costs aren’t known by the owner in the beginning of the project, if the project costs (design, construction, FF&E) exceed a number they are comfortable with following the bidding phase, you’ll need to get additional internal approval or use a Value Engineering (VE) exercise.

Why Choose Design-Bid-Build?

Owners typically choose design-bid-build because they want to have a certain level of oversight, creativity, and input with the project. Because it’s a fairly simple approach, it ensure each project stage is fully completed before moving onto the next. When followed well, DBB can eliminate problems with incomplete designs and scope gaps, while helping contractors avoid having to continually iterate on and change what they’ve already done.

For projects where the design will not change drastically throughout, design-bid-build is always a safe bet.

Design Build vs. Design Bid Build

Unlike the traditional design-bid-build process, which has three clear steps, the design-build project delivery method only follows two. In design-build, general contractors come in much earlier during the design phase of the project or have the internal capacity to assist with design as well. Lastly, instead of a drawn-out bidding process, contractors are selected well in advance of the construction of the project

Here’s our quick guide to design-build contracts for a more in-depth look.

Final Thoughts

Design-bid-build is the most common project delivery method for a reason. DBB does a good job of creating distinct roles for each party involved and allows owners to have plenty of oversight over each phase. Ultimately, it levels the playing field for contractors who are qualified to bid the project. Because of its sequential nature though, it’s important to remember that the full budget isn’t often defined early on.

Further reading: Guide to the 8 Types of Construction Contract