As a design engineer and consultant working in the building sector, I have observed an increasing trend towards Design & Construction (D&C) project delivery versus the traditional Full Design and Documentation.

Recent media coverage of issues of quality and compliance with Design and Construction (D&C) projects, has raised concern and questions regarding this approach.

This article considers the merits and downfalls which should be considered before deciding which of the two pathways are better suited to a project delivery.

First I will list the advantages D&C project delivery may provide:

• Saving in project delivery time due to much reduced design development period and starting of construction whilst design elements are still being finalised.
• Potentially lower cost risk to the client as the client is carrying significantly less design related risk i.e. lower design detail results in lower exposure to issues with design functionality, co-ordination, latent site conditions, inappropriate equipment choice etc. It must be said however that this is open to interpretation and not all design risk is eliminated by this arrangement.
• D&C contractor has more freedom to provide innovative methods of construction delivery, systems design set up, and products, which can benefit the end result.
• The construction contractor and designer are working on the same side to provide an optimised design/construction delivery outcome.
• The overall cost of the project delivery is reduced. This is also open to debate as D&C contractors must price in a greater element of risk where the design has not been fully described.

Now I will list the negatives engineers, designers and clients may have experienced:

• Limited buy in from key users due to limited input in the design process.
• Limited ability to capture all key client and user requirements in the D&C brief due to lack of design detail development.
• Limited control of quality of the construction details due to lower level of design detail in the D&C Brief.
• Interpretation of the D&C design by the Contractor in favour of saving cost and at the expense of quality, function, flexibility and longevity.
• Use of inferior lower cost products by trades and their suppliers to save cost/time.
• Limited fees and time for the D&C contractor’s designers to further develop and finalise the design, leading to poor quality design outcomes.
• Client initiated changes to the design during the D&C delivery, can result in very high cost variations due to cumulative effect of re-design cost, aborted site works and extension of time.
• Inability of client and their reviewers to have D&C contractor address perceived low quality finished outcome due to lack of specific detail available in the contracted D&C brief.

Delivery Methodology

Traditional design process retains the design team throughout the entire design cycle up to completion.  The works are documented and released for construction by the trade contractors.

The most common D&C methodology utilised is to engage a team of engineers/designers to obtain the client brief requirements and provide a level of technical scoping, design and performance requirements.

The design team is normally engaged based on an agreed level of design development requested by the client for the provision of the D&C tender package.  The level of design development may be as low as 30% and as high as 80% depending on how much control over the design the client wishes to have.

The main issue encountered with this approach is being able to define what a percentage complete D&C design includes and does not include.

Typically a 30% complete design for D&C would include:

• a performance brief outlining the key functional and performance requirements for the project
• potentially some sketches which provide the outline for the configuration of the building and plant areas.
• it may also include some high level schematic diagrams which provide definition of some building services items.

An 80% complete design for D&C would typically include:

• a works specification outlining the key equipment performance and quality requirements,
• description of works and systems to be included, high level functional requirements for automatic controls, security, power, fire and other systems,
• schedule of key equipment types and indicative capacities,
• drawings at nominal 80% completion which provide coverage via notation, of items of design to be resolved and completed by the D&C contractor.
• it would typically not include final fit out resolution such as positions of service outlets, final sizes and dimensions, and final design capacity for equipment.

The D&C contractor must use the D&C brief as the basis for completion of the design and delivery of the constructed works.  Their responsibilities include finalising design details with the client and incorporating these detail requirements in the final design and for-construction drawings.

The client side design team may be retained by the client to provide a technical review role through the design finalisation and construction phases, or they may be Novated contractually to the D&C contractor to provide finalisation of the design and to assist with review of the construction works provided by the trade contractors

Typical D&C Pathways for Design Team – Novation vs Retention

There are two common pathways available to the client when going down the D&C pathway with regards to the design team.

1. The design team is novated over to the D&C contractor and the D&C contractor becomes the design team’s new client for the remainder of the project.
2. The design team is retained by the client to provide an on-going technical advisory role including review of the D&C contractor’s design, review of technical submissions and advice on quality and compliance with D&C brief. In this case the D&C contractor would engage its own designers to finalise design and documentation.  These designers may be engineering consultants or services contractors with design capability.

A summary of pros and cons for each is outlined below:

Design Team Novation:

Pro:

• D&C contractor has access to original design team and may potentially save time and provide better briefing to trade contractor on the project requirements.
• Potentially better understanding of non-clearly defined client brief aspirations.

Con:

• Design team carries risk of potential re-scoping/re-work once novated to a D&C Contractor and therefore fee to client is higher to cover risk.
• Client loses control of the design team, as the design team is now part of the D&C contractor’s team.
• Client loses experienced technical team to review the works submissions and on-site works on their behalf. They may need to hire additional specialist technical resources to provide review and advice independent of the D&C contractor.

Design Team Retained

Pro:

• Client retains the original design team to provide review and advice on their behalf regarding the development of the D&C project.
• Design team overall fees reduced due to much lower risk compared to Novation to a D&C contractor.
• Potentially lower D&C contract price as D&C contractor is not restrained to engaging the client’s nominated design team.

Con:

• D&C Contractor’s design team may not have a good understanding of the client’s aspirations.
• Client carries cost of their design team for the total project delivery although extent of this is subject to what level of support is required.

In both cases it is very important to decide at the start of the project:

1. Whether the project design will be delivered as D&C;
2. Whether the design team will be novated or retained.

This is important as failure to do this at the design initiation will result in a design process not orientated towards a D&C delivery pathway.  In my experience, a change to the design delivery methodology part way through the design process will lead to aborted work, incorrect level of design detail, and a greater potential for D&C documentation to be of lower standard, than would be the case had the designers been aware the project would be D&C delivery.

The Problem with a change from Full Design to D&C Delivery

In a traditional fully designed project, the designer may be developing and documenting details for number of fittings, specific mounting, capacities, work notes and other details for some of the areas which they have received good client briefing, whilst other parts of the documents have much lower design development.  Overall, the design may be considered as say 50% complete, however in actual fact some areas of the design may be at 80% complete and others may be at 20 % complete.

If the client then decides to change project delivery D&C model without allowing for significant re-working to the documentation, the resulting D&C design package would likely have inconsistent levels of design detail and therefore could lead to much confusion in pricing allowances by the D&C contractor and associated trades.  This can ultimately lead to variation claims by the D&C contractor for scope not clearly/consistently defined in the D&C brief. 

Other Issues to Consider

Client Refinement of Design Requirements

In my experience a D&C contract arrangement can limit the client’s ability to further direct refinement and modification of design intent, without significant financial penalty. Changes or refinements to the D&C brief would be considered as potential client initiated variations to scope, which may have contract cost and program implications.  Direct communication by the design team with the client is normally discouraged by the D&C contractor as they perceive a contractual risk of verbal agreements made between the client and their designer.

Design Team Conflict Challenge

The other negative aspect I have experienced with this arrangement is that the design team can be in conflict between what they perceive as good design/construction practice and the D&C contractor’s push to reduce project cost and time and increase margins.  I experienced this when working on a large airport buildings project where we as the design team, were well established as client side designers and therefore knew very well the quality and functional expectations of the airport.

D&C delivery was not the normal project delivery method for the airport at the time, however due to time pressure they decided to move from a traditional design process to a D&C delivery.

Once novated to the D&C contractor, the design team were constantly challenged as to why the design could not be re-assessed to save cost and time. Unless the design team could prove that the quality level was specifically identified by the Airport Design guidelines or there was a potential risk of unacceptable performance during the defects warranty period, the D&C contractor would in many cases, direct a change to lower quality/cost which still met the functional requirements.

This created significant conflict with the project design team who knew the client facilities team expectations but could not justify the higher quality outcome to the D&C Contractor they were novated to.

Application Recommendations

Complexity of works

In my opinion, D&C delivery works better for projects which have relatively low complexity and utilise relatively standard design processes.  For example, the vast majority of residential tower projects are delivered via the D&C model.  The D&C designers utilise very standardised briefing and design templates which have been adopted and refined over many projects.  The trade contractors are also very experienced with understanding the basic design and delivering a certain level of quality for this type of work.

Not Complex: Apartment building

Complex: Airport building

Once you start to get to more complex type work, such as educational facilities, hospitals, laboratories and other buildings which have extensive brief requirements and many user group requirements, the benefits of the D&C model (except for time) are much reduced and the risk of poorer quality outcome is increased.

For these types of projects, the D&C process must be much greater refined and documented in the D&C brief.  It needs to include much greater level of client and user group briefing allowances, include hold points, include an experienced client side technical review and advisory team, and much better defined performance proving and performance guarantee requirements.Once you start to get to more complex type work, such as educational facilities, hospitals, laboratories and other buildings which have extensive brief requirements and many user group requirements, the benefits of the D&C model (except for time) are much reduced and the risk of poorer quality outcome is increased.

Key issues encountered with complex projects utilising D&C delivery are:

• Reduced level of quality of equipment and finishes;
• Reduced level of functionality for users;
• Equipment selection not meeting users expectations;
• Poorer maintenance provisions
• Poorer redundancy of the systems
• High cost of changes due to user groups not being able to adequately define requirements at D&C Brief stage.

The Issue of Detail

I was involved with a project where the D&C contractor provided design and construction of high temperature heating water piping system.  In my role as technical adviser to the client, I noted that the pipe support system being installed on site was a plate to plate sliding pipe support.  I was aware that the system the client utilised for the majority of their existing piping systems was a roller type support, as it significantly reduces forces imposed on the support brackets and provided a long life with negligible maintenance.
A client initiated change in pipe supports at that stage of the project would have resulted in significant variation costs and program delay, so the project was handed over with the sliding supports which were greased to reduce forces on the brackets.  This added an additional maintenance need to grease the sliders at regular periods for the life of the system.  Some of the supports would be very difficult to access.

Plate to slide support

Roller pipe support

We identified the plate to plate sliding support as non-compliant with the client’s Brief ie. piping design standard..  It was however successfully challenged by the D&C Contractor that the wording of the pipe standard was “the support must accommodate for movement of the pipe”.  It was argued successfully by the D&C contractor, that the sliding support met the intent of the wording and that there was no specific reference to roller supports being required.

The client took possession of the system as provided and had to allow additional capital works budget to change the supports to roller type supports over the future scheduled maintenance shutdown periods.  In this case, a traditional design delivery would have allowed more opportunity for the client facility maintenance personnel to review the design and provide briefing and feedback prior to the tendering of the works.

D&C contractor capability

Another key factor in the success of a D&C delivery project is the D&C Contractor’s team capability.  Due to the nature of the D&C brief which is primarily written around a performance requirement and includes little design detail, it is very important that the D&C team are well experienced with the type of design the client is aspiring to and are able to design and specify good quality, robust and functional systems.  Careful consideration should be given to the make-up of the D&C team, to ensure that each of the team contributors is a quality consultant/contractor and that they have good experience with the type of work to be delivered.

Unfortunately competitive pricing of D&C works often results in very low fee allowances for the design team and contractors, leading to reduced service and potentially reduced competency.

Summary

D&C delivery appears to be becoming more and more popular as a means of reducing project delivery time and to reduce client side design risk.

It does however require careful consideration as it is not without resultant shortfalls.  These include less control of:

• Design detail
• Quality of equipment and finishes;
• Level of functionality for users;
• Equipment selection;
• Specific maintenance provisions

The process has an increased risk of cost due to changes in brief from user groups not being able to adequately define requirements at D&C Brief stage.   The delivery method appears to be more successful with relatively standard and common designs but may not be ideal for more complex, unique projects where high levels of client briefing and requirements need to be captured for the design, or where complex systems need to be included and these are difficult to define without high level of design detail.

What You Should Be Asking Yourself

Before deciding which way to deliver your next project, consider the following:

1. Is the project complex or relatively simple/standard?
2. Do you wish to retain a high degree of control and oversite of the design?
3. Is the level of quality and detail of high importance?
4. Are there many user groups required to input to the project and do they have the ability to provide requirements over a relatively short user input period?
5. Does the project require significant number of specialist systems and equipment to be delivered rather than generic systems meeting a specified performance?
6. Can the project delivery program be extended or is timing critical?
7. If deciding to pursue D&C delivery, what level of design development are you comfortable with achieving before tender?
8. If deciding to pursue D&C delivery, do you have sufficiently skilled personnel who can review the design development and construction, or will you retain the design team to act as client side technical adviser and reviewer?

This should assist you in deciding the best course for your next project delivery.