What’s Included in a Design and Build Contract?
What’s in a Design and Build Contract? This article will discuss what’s included, from the architect to the estimated construction costs. It will also touch on the Security Bond. There are several aspects to consider before signing the contract, such as the estimated construction cost and the owner’s security. Here’s a summary of each:
Architect
When an Architect is included in a design and construction contract, it is essential to clarify who is responsible for certain aspects of the project. There are many decisions to be made, and defining who is accountable for each step will avoid delays during the project. An architectural contract is also known as a lump sum or fixed-price contract since the owner agrees to a specific price, regardless of any bumps in the road. The contractor’s responsibility is to complete the work for the agreed-upon price.
With a design and construction contract, an Architect provides full-service architectural services to the owner, including managing the subcontractors and consultants. In addition to managing the project, the architect also involves all of the subcontractors in the project, ensuring that they are all working within the project’s vision. While the architect bears the most risk in a design and construction project, the architect is also involved in the entire process, making the project run more smoothly.
Design-Builder
In a Design-Builder contract, the lead designer has an agreement with the owner. This entity hires the contractor and subcontractors to build the project while keeping direct contact with the project owner. The lead designer also oversees the work of the construction staff. A lead designer may take the lead role if the project is complex. However, design builders must be responsible for coordinating the work of subcontractors and contractors. You can learn more at design build contractor Sacramento CA.
Before you sign a Design-Builder contract, the two parties should discuss the contract terms with their legal counsel. First of all, the contract language should define the roles of both the designer and the design-builder. The owner and the contractor must clearly define the roles and responsibilities of the two entities. It is essential to determine the role of each party, and the contract should state how much each party will pay for the other.
Estimated Construction Cost
The estimated construction cost in a design and build contract is a cost estimate based on materials and labor. Indirect costs include design fees, legal fees, permits, and other expenses not directly related to the construction work. These expenses are accounted for during the design phase in the cost estimate. These costs may be higher than the actual construction cost if the designer chooses choices that reduce the total cost over the life of the property.
Project owners and contractors use the estimated construction cost in many ways. It helps define the scope of the work and allocate budgets. It also helps determine the final construction bid. In addition, a well-written estimate helps prevent over or underpaying a builder. It’s also a crucial part of earned value management, which tracks the performance of the construction project against the total cost and time estimate.
Security Bond
A contractor must read and understand the Security Bond in a design and build contract. The bond is part of the contract, and it entails financial responsibility on the contractor’s end. The contract may also contain provisions for a five-year warranty. Therefore, a contractor should carefully review and understand the Security Bond to ensure it protects its interests. It is also essential to read the guarantee paragraph carefully and discuss it with professional advisors.
Design professionals face particular challenges when it comes to the security of their projects. Since they don’t deliver the materials and labor, the contract’s payment bond terms often fail to protect them. While there have been many round-about solutions for design professionals, the lack of specific language in payment bonds leaves them vulnerable. Design and building contract documents are essential to protect both parties. SFAA and the NASBP have supported the introduction of design-build bond forms.
Schedule Development
Managing schedule development is crucial to completing design and construction projects. Establishing milestones is critical to project success, and the development of a schedule must reflect the maturity of each discipline. Unfortunately, typical design-and-build contracts do not have sufficient resources to define these milestones. In such situations, the scheduler must coordinate with the A/E team to obtain the necessary information, such as the project’s scope definition and design hours.
In general, the process of scheduling design work involves an iterative process. Instead of recording handoffs, schedules should track the inter-discipline relationships throughout the project. It is best practice to plan for a known scope and adjust it as details emerge. Creating a program based on handoffs will never yield an accurate and valuable schedule since it must continually match actual work.
Reporting
The procurement provisions of a design and build contract are typically separate documents. If the project is worth more than $50 million, NYSDOT may want to deviate from TEA-21’s rules. If not, the project may be eligible for approval from FHWA. The RLOI will generally include:
- A project description.
- Statement of goals.
- A contact person’s address.
- An invitation to an informational meeting.
- Other required procurement information.