Formed in 2020 with the goal of providing a uniquely developed perspective, insight, and service to the global construction and infrastructure community, Leading Construction Lawyers Alliance (LCL) strives to share knowledge and insight in service of the industry. During early roundtable discussions among LCL’s founding team alongside prominent members of the international construction and infrastructure community, a single theme began to emerge—our participants were experiencing recurring frustration on design-build (DB) projects.
Although DB has been used, in some form, for at least 5,000 years, its modern resurgence as a formal delivery method has only lasted around 30 years in the United States. In that time, DB has proven to be a successful delivery method that allows owners to leverage the marketplace’s ingenuity to produce greater efficiencies and inventive solutions to project challenges. That is not to say that DB is right for all projects or all circumstances. At LCL, we were interested in exploring the causal relationships that lead to DB success or failure. In an effort to explore the reasons for challenges on DB projects, we commenced a series of roundtables beginning in early 2022 with a group of contractors. We followed this with a similar discussion among a group of individuals representing several large project owners in Europe and the United States. Ultimately, this process culminated with joint sessions involving owners and contractors alongside design community members.
We learned that recognizing the projects on which DB will be most advantageous; selecting and training the appropriate project teams (within both the owner and design-builder); and adopting better, more collaborative practices can generally cure challenges faced on DB projects. Both the strength and weakness of DB success is collaboration—genuine, meaningful teamwork in a partnership among the owner, design-builder, and designer that presents an opportunity for mutual investment in the project’s success. On DB projects, a team must tackle and solve problems in a way that leverages each project participant’s strengths. In short, the phrases “it’s not my problem” and “that’s your job” have little place on a DB project.
In this summary, we have approached the collaboration conundrum from two distinct perspectives that emanated from our joint sessions. Consequently, this summary presents the working group’s findings and best practices in two parts: Practical Collaboration and Contractual Issues. First, we examine the practical considerations associated with collaboration on DB projects, the hindrances to collaboration, and the way that these issues can be addressed, at least in part, in the DB setting. Second, we have examined the role of the contract, including how better risk allocation can help to achieve better alignment. Proper risk allocation and contractual terms are essential to create an environment ripe for better and more fluid collaboration. However, if inconsistent, they can be a critical source of difficulty.
In the following sections, we will elaborate on the concepts introduced above and suggest best practices for DB success. Our hope is that by highlighting the DB fundamentals, we can encourage the widespread adoption of better methods.5
As a delivery method, DB is fundamentally different from traditional project delivery insofar as it requires a break from the more siloed approach employed in design-bid-build construction. In recognizing this, it is important that three factors remain present throughout the job:
Assemble the right project team.
While this requires the inclusion of an experienced design-builder, it is in many ways equally important to utilize an experienced and aligned team within the owner’s organization.
Train teams in DB principles.
Experience is invaluable, and where it is lacking, the use of outside resources, including a third-party facilitator, may be helpful.
Maintain open communication and collaboration.
Communication and collaboration must remain constant throughout the project.
The tone of collaboration is set much earlier in the process than most recognize—beginning with how the owner organizes itself internally, how it goes about procurement, and how it apportions risk in the parties’ contract. A contract that poorly allocates risk will place the parties at a distinct disadvantage when it comes to collaboration. For example, an owner who views the DB model purely as a vehicle to evade all design and construction risk is setting a course for a problematic project devoid of collaboration. Just as “risk dumping” can signal to the design-builder that the owner does not intend to collaborate, a contract that contains properly allocated risk and provisions designed to facilitate shared responsibilities can communicate to all parties involved that the owner will administer the project to provide the best opportunity for success. Properly allocated risk shows the parties that the owner has thought through its DB contract and that it is cognizant of the differences between DB and more traditional delivery methods.
Read the remainder of the summary here.