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Design-build construction enters residential market

About Remodeling

Tom Barry, Contributing Writer October 2003

When SawHorse Inc. entered the design-build business, it was a hard sell. Having a single company design a home or a major remodeling project and then do the construction itself wasn't all that common.
Typically, an architect would draw up the plans and put them out for bid. Then the winning contractor would execute them. Back in those days, there wasn't much "one-stop shopping."

"We started doing design-build 13 or 14 years ago and had a hard time convincing people to go along with it," said SawHorse Vice President Carl Seville. "The concept just wasn't well-embedded in society. Now it's the other way around."

Indeed. Design-build today is a growing trend in residential, as well as commercial, construction. Call it back to the future.

"Several hundred years ago, construction was design-build," Seville said. "Over the years, the architect and builder became separated, and it's only been in the last 10 to 15 years that design-build has come back. You see it a lot today in residential construction, as well as in commercial and industrial projects."

Georgia Tech's Linda Thomas-Mobley takes an even longer journey in the time machine: back to Babylon in the 18th century B.C.

"Design-build goes back to the concept of the master builder in the Code of Hammurabi," said Thomas-Mobley, an assistant professor of building construction. "We've now been using design-build for years and years, so it's more of a recent resurgence than a new thing. Most kitchen and basement renovations are design-build. Folks with a lot of money might hire an architect or designer separately and then go out and get bids, but usually the architect will offer the construction service as well."

The pros
Proponents of design-build argue that it saves money and time, promotes critical dialogue between the architect and contractor, and puts responsibility for the outcome squarely on the shoulders of a single party.

Truth is, the relationship between architect and contractor can have all the comity of a James Carville-Ann Coulter political debate, with the client serving as a hapless moderator.

"With design-build, there's a lot less finger-pointing and a lot more efficiency in getting things done," said Richard Belle, editor of Design-Build Dateline, a publication of the Washington, D.C.-based Design-Build Institute of America.

The cons
Critics say that design-build eliminates needed checks and balances between the architect and contractor.

"The thought is that designers and contractors who are arguing can sort of keep each other honest," Thomas-Mobley said.

Critics also contend that an integrated process may allow the designer-builder to bill more for services than would be charged otherwise.

The Design-Build Institute of America numbers about 1,000 members, the vast majority of them commercial builders.

"Two decades ago, the percentage of nonresidential projects that were design-build was in the single digits," Belle said. "Today it's around 33 percent, and that includes highways, bridges, schools and other such projects. Within a decade or so, we expect the percentage to be in the mid-40s and maybe even approaching majority status."

By contrast, residential design-build is in its infancy but gaining momentum, Belle said.

"It's a matter of comfort and habit. The duties and obligations are different than under traditional contracts. Change can be a leap of faith."

SawHorse, a 25-employee firm in Sandy Springs that generates roughly $6 million in annual revenue, focuses on residential remodeling projects, ranging in price from $10,000 to $500,000.

Seville said the traditional design-bid-build process has many flaws.

"More often than not, the bids are far more than people want to spend," he said. "Often, they have an architectural plan that they fall in love with, but they can't afford the project once the bids came in. So they either cut back or shop it around until they got the cheapest contractor. The result is that they either don't get the project they want or very good work done."

Design-build proponents say that virtually any remodeling job can benefit from design-build, with the exception of those that lack a substantial design component, such as painting or installing siding on a house.

Clarifying the design process
Like SawHorse, Atlanta-based Home Rebuilders Inc. is a design-build operation, one with four architects and a kitchen-bath design specialist among its 40 employees. Its annual revenue is in the $7 million range.

"Our company is 21 years old, and we've been a full-fledged design-build firm for about 12 years now," said Marketing Director Karen King.

Design-build companies tout the advantages of a close, ongoing relationship between architect and contractor. In traditional building, they say, contractors often lack input into the design while the architect may not be consulted on key construction matters.

"A lot of times, architects don't have a very good sense of what construction costs are," King said. "A client will go to an architect and say, 'We want X, Y and Z in our house.' The architect, of course, is going to put every bit of that into the plans. But when the bids are too high, it's back to the drawing board. We try to meet both a client's goals and budget."

"[To be a true design-build firm,] you have to provide design and construction services under one roof," King said. "A general contractor might hire a freelance architect on the side for a project, but that's not really design-build. We have our own project managers, carpenters and laborers, although we do use subcontractors such as electricians and plumbers."

Proponents say design-build also cuts back on -- if not eliminates -- that old construction standby: the change order.

"In the traditional design-bid-build mode, there are lots of opportunities for disagreements that can result in cost overruns," Belle said.

"Basically, if contractors are trying to bid competitively, their goal is to find as many loopholes as possible in the architectural plans," Seville said. "They want to leave out as much as they can in order to submit the lowest bid, then crank the price back up with change orders. You find that all the time in commercial construction and a fair amount of time on residential projects."

Seville said that on a design-build project, details -- everything from the type of plumbing fixtures to kitchen cabinets -- are nailed down by the time the contract is signed and construction begins.

"We give them a fixed price. There's no negotiating once the job starts. If you go into a contract with a lot of things undecided, you will negotiate continually, which is time-consuming, costly and frustrating," he said. "With us, you can spend two to eight hours over a period of meetings picking out all the materials for the job, versus spending half of the next six months worrying about things. How much is a person's time worth?"

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