Concept of Design-Bid-Build The Traditional Contract

Concept of Design-Bid-Build The Traditional Contract

Design bid build is one of the various project delivery systems that form the basis for the project’s contractual relationships and transcribe the scope and period of responsibility of each party, and identify different types of contracts used to measure how the construction contractor will be paid for completed works.

Design–bid–build, also known as Design–tender- build, traditional method or hard bid, is a project delivery method in which the organization or owner contracts with separate entities for the design and construction of a project. It is traditional’ because it has been the process of choice for organization or owners of most construction projects for a long time ago.

Design bid build process steps

There are three main consecutive phases to the design–bid–build delivery method:

Design phase

In this phase the owner contracts with a design organization to design and prepare bid documents, including installation drawings and technical specifications, on which various general contractors will in turn bid to carry out the project. For building projects, the design organization will work with the owner to identify the owner's needs, for the purpose of prepare a conceptual and/or schematic design. Then this early design is developed, and the design organization will usually hire design professionals including structural, mechanical, electrical, and plumbing engineers, a fire protection engineer and often a landscape architect to help complete the installation drawings and technical specifications. The finished bid documents are coordinated by the design organization and owner for issuance to general contractors during the bid phase.

Bid (tender) phase

Bidding can be open, in which any qualified contractor may participate, or select, in which a limited number of contractors are invited to bid.

various general contractors that bidding on the project obtain copies of the bid (tender) documents, and put forward them to various subcontractors for bids on sub-components of the project, such as the concrete work, structural steel frame, electrical systems, and landscaping. During the bid (tender) period, the questions may appear and the design organization will usually issue clarifications or corrections to the bid documents in the form of addenda. The contractor completes bid and submits by the established closing date and time. Bids can be based on the quantities of materials in the completed construction or as a lump sum cost; however, these bid requirements are clarified within the bid documents.

Once bids are received, the design organization typically reviews the bids, Performs the required clarifications for the bidders,  checks contractor qualifications, ensures all document is in order, and informs the owner as to the ranking of the bids. The owner is not binding to accept the lowest bid, and it is usual for other factors including past performance and quality of previous work that effect the selection process. However, the project is typically awarded to the general contractor has the lowest bid.

Construction phase

Once the construction organization is selected the bid documents may not be altered. The necessary permits (for example, a building permit) must be achieved from all special authorities in order to start the construction process. Should design changes be necessary during construction, whether initiated by the contractor, owner, or as discovered by the designer, the designer may issue sketches or written clarifications.

In most cases, almost all component of a project is supplied and installed by sub-contractors. The general contractor may carry out work with its own forces, but it is common for a general contractor to limit its role to managing the construction process and daily activity on a construction site.

During the construction phase the design organization also acts as the owner's agent to review the progression of the work relates to pay requests from the contractor, and to issue site instructions, change orders, and other documentation necessary to facilitate the construction process and certify that the project is built to the approved construction drawings.

Design bid build advantages and disadvantage

Advantages

•         Applicable to a wide range of projects.
•         Easily to understand.
•         Certainty of price.
•         Clearly defined roles for all parties.
•         No coordination risk to owner.
•         Easy to accomplish changes during design.
•         Provides the lowest initial price that responsible, competitive bidders can offer.
•         No legal obstructions in procurement and licensing.
•         Stimulating competition in the private sector.

Disadvantage

•         Tends to produce basic level quality.
•         Requires a higher level of inspection by the organization.
•         Initial bidding may not result in the lowest final cost or the best final value.
•         Designers may have limited knowledge of the actual cost.
•         The lack of inputs from the construction industry during the design phase exposes the         organization to claims related to design and construction issues.
•         It tends to create a hostile relationship between the contracting parties, rather than            promoting a collaborative atmosphere in which issues can be resolved efficiently and          effectively.
• ·   There are no built-in incentives for contractors to provide improved performance (cost,        time, quality, or a combination thereof).
•       The owner manages all design and construction contracts
•         No contractor input for the design.
•         Reasons that may cause to choose design bid build.

The most important reasons to choosing design-bid-build

The owner priority is low costs

Design bid build includes bids from several contractors. Often, owner's goal in getting competitive bids is to secure the lowest potential price for its construction project. In design bid build, the owner will have the opportunity to compare several bids and can select the one offering the lowest costs.

Most government contracts use design bid build in order to minimize costs. They will take their plans to several contractors and, typically, will select the contractor that offers the lowest price.

The owner has existing plans

Design bid build works well with companies that already have designs and plans. They really know exactly their needs and requirements because they do the same projects over and over.

Companies such as chain restaurants, gas stations, and retail stores with various locations often prefer the Design bid build method for their projects because they use the same plans for all of their buildings. When they need construction on a new site, they take these existing plans to contractors in that area to get bids and then select the contractor based on those bids.

The owner don’t know a contractor

If the owner is completely new to construction and does not know of any reputable contractors or has any quality referrals, then design bid build option might be the best selection. It would allow him to examine several contractors for his project without immediate commitment.