What is a Design and Construct Contract?
What is a Design and Construct Contract?
Throughout every stage of the construction process, it’s important that the right tool is used for the right job. This is also true of the contractual phase of a building project, where a project’s delivery method should be customised and decided on in accordance with the project’s requirements.
Typically, a tender for a project’s development takes one of two forms: a traditional ‘construct-only’ contract or a ‘design and construct’ (D&C) contract. Both approaches have their benefits and limitations, and the choice of which to select depends on the project’s scope and the client’s requirements.
D&C contracts, like our Maroochy RSL renovation, have a wide variety of applications, so it is important for a proprietor to be aware of their options regardless of the size of their establishment. If you are considering engaging a construction company to build or refurbish your venue, you should understand the difference between these two types of contracts.
What is a Construct-Only Contract?
The traditional construct-only contract is made up of three stages: the design stage, the bidding stage and the construction stage. In the design stage, the venue owner or ‘principal’ will engage an architect to create the design for the project. From there, contractors will be invited to tender bids on the design in the bidding stage, detailing their budget proposals, technical solutions and production methods for executing the build. Once these tenders are submitted, the principal will decide on the successful contractor who will then deliver the project according to the original design, completing the third stage of the contract: the construction stage.
What is a D&C Contract?
When operating under a design and construct contract, the contractor is responsible for the project in its entirety, and is therefore tasked with commissioning the design as well as executing the build.
There are only two stages in a D&C contract, starting with a bidding stage where contractors render bids on the project and provide a partially-completed design to the principal. Once a suitable contractor is chosen the project moves into the design and construction stage, which is an ongoing process whereby the contractor oversees the build from inception to completion.
These contracts are sometimes referred to as ‘turnkey contracts’, because the process is so convenient and straightforward for the principal that upon project completion they will be able to arrive on-site and simply turn a key in order to unlock the door and start using their new space.
Benefits of a D&C Contract:
D&C contracts provide numerous benefits to principals, including:
Speed of Delivery
Speed of project delivery is one of the primary advantages of a D&C project. A D&C tender can be let earlier than traditional contracts; often as soon as a project brief is in place and concept designs have been drafted. This allows the builder to start construction earlier, in particular preliminary works which typically would only begin after the conclusion of an exhaustive documentation process.
This build efficiency is enhanced by the fact that the contractor’s direct management of the architects means that they are able to recognise and remedy potential problems early on in the process. There is also only one point of contact for the principal, increasing communication efficiency.
Minimising Risk for the Principal
With only one entity being responsible for both the design and construct aspect of the project, the contractor takes on more responsibility and in turn relieves the principal of risks associated with the design and construction. Typically, the contractor will take on cost and time-associated risks which may arise if the project design needs modification or if adjustments to the construction process are necessary in order to meet the agreed-upon requirements.
As the entire project is priced by one entity, the principal also benefits from having the price of the contract negotiated before work commences, removing unplanned outlays and resulting in fewer overheads and managerial costs.
With the builder taking a seat at the design table, a D&C contract incorporates the builder’s expertise concerning construction methods, building materials and construction technology into the design process.
This approach allows for a dynamic project result, providing the contractor with the flexibility to incorporate innovations into the design development.
A D&C contract also allows for greater versatility during the building process, as the design can be easily modified to accommodate any issues that may arise.
Considering Your Construction Contract Options?
With extensive experience in delivering design and construct as well as construct-only projects across South East Queensland, our team at Ashley Cooper Construction can help explain which approach will be more suitable for your requirements. Get in touch with us today and discuss how we can help bring your project to life.