The Definitive Guide to Design Build Agreement Templates

What design build contracts are

Design Build contracts have become increasingly popular undertakings in the construction industry. However, not everyone is on the same page when it comes to what Design Build actually entails. At its core, the Design Build Contract is the combination of two separate contracts, one for the architectural/design work and one for the construction work. However, much like a snowflake, no two Design Build contracts are alike. The contract may be a complete design and construction package or a contract for professional services only. Furthermore, there may or may not be a lump sum contract for general conditions work. A Design Build Contract also may not require subcontracts, as the contract may require that the Design Builder itself be responsible for every discipline, including electrical, plumbing, mechanical, HVAC, etc.
The key element of a Design Build Contract is that the entity performing the work is not only responsible for the work, but it is also responsible for designing the work . This is the major distinction between a normal construction contract and a Design Build Contract. Unless the work is extremely basic, it is unlikely that the contract will contain this many disciplines. For example, if the work contains electrical, mechanical, plumbing, civil, site/civil, geotechnical, etc., it would be virtually impossible for one entity to design all of these trades. At the very least, the Design Builder would need to utilize sub contracts for these trades.
In the past couple of years, one of the major issues on design build jobs has been "needless" disclosure of design documents. As a general rule, the owner should not have the right to third party disclosure of documents like shop drawings, original plans, changes, etc. In those instances, the owner is not privy to the inner-workings of the project. This is an issue, however, that contractors and design builders should discuss with their stakeholders and governing boards before heading down this avenue. There are many arguments that both sides can make.

The advantages of using a design build agreement template

Design build agreement templates offer several advantages that make them a preferred choice for many construction projects. First, by providing a clear framework for the project, a template can help all parties understand the scope of work, which can prevent scope creep and ensure that everyone is on the same page from the outset. Second, templates can save time and money. By using a pre-formulated agreement that is tailored to the specific project, parties can spend less time negotiating the contract terms. This can be particularly beneficial for smaller projects, where the time and money spent negotiating an agreement may not be feasible in relation to the overall cost of the project. Third, design build agreement templates help facilitate communication and coordination between the owner and the design build team. A clear agreement can help ensure that all parties are aware of their roles and responsibilities, as well as the project timeline. This can help to eliminate miscommunications, which can lead to costly delays or rework.

Crucial components of a design build template

The key provisions in a design build agreement template provide the bones of that agreement. Having these key provisions is an absolute must. A good deal of coordination and cooperation is required between the design professional and the builder in order to successfully complete a construction project. The work, the timing and the compensation discussed below are items that must be clearly articulated in the agreement.
Outline the work the design professional is expected to complete. This includes discussing the level of detail required in the design such as whether construction drawings or working drawings are required and if it includes architectural and engineering designs. You may also want to include a provision that allows for them to be present during construction to ensure the project is being built as designed and to provide assistance to the builder if needed.
Intertwined with the work is the timing for completion. What is the duration for design? Are there milestones throughout the design process that need to be hit? If there are construction documents to be developed at some point in the process, how long should that take? What are the time parameters for construction?
This section of the design build agreement template requires careful consideration of how the payment will occur. You may want to consider a payment schedule for design work tied to mutual milestones. Or you could consider a retainer to be paid at the time of execution of the agreement. Again, the devil is in the details, so think through all of the issues and have an open dialogue with the other party when deciding how to describe the payment terms.
Dispute resolution is needed if the parties cannot amicably resolve a dispute. You may want to switch out your dispute resolution mechanisms as you see fit to better fit your individual construction project. For example, perhaps your project requires years of building and you want to avoid the litigation path to have any disputes resolved. You may consider binding arbitration as part of your design build agreement template. You should think about what is best for your project and customize accordingly.

How to personalize your design build agreement template

It’s crucial to customize your design build agreement template to suit your specific project. Variables such as the project’s unique specifications, the scope of work, and any additional contractual clauses should all be taken into consideration before finalizing the agreement. Failure to do so may result in disputes down the line or lead to non-compliance with local laws .
Legal consultation during customization is a fundamental step in ensuring the viability and enforceability of your agreement; a professional legal opinion will help to ensure that the contract template and the proposed customization are appropriate for the parties’ intended use. As the design build agreement template is meant to be a legally binding contract, legal counsel can also help review and advise on clauses or language that will protect the parties’ interests in the event of default or breach.

Design build agreement template common pitfalls

A common mistake clients encounter when working on a design build is the preconceived notion that they and their architects or design professionals can simply utilize an internet search to obtain an acceptable design build contract. More often than not, these pre-existing forms found on the internet can be insufficient or actually problematic for the individual project if not properly tailored to the specific project.
Another mistake that clients make is to think that a template design build agreement may only be used for smaller design build projects, such as residential projects. However, a design build contract template can be used for all types of design build projects, including large commercial and government projects and should be reviewed and personalized to the exact specifications of the project.
It is also critical that clients review design build templates with their attorney as these documents serve as legally binding contracts between the project owner and the design builder. A poorly prepared or unproportionate design build agreement can lead to disputes and complications down the road. It is always best to consult an attorney that is experienced in drafting design build contracts to advise on these specific issues.
In the case of change orders, clients should be mindful of the fact that design build contracts contain multiple provisions regarding the management of changes in the scope of a project. For instance, clients should be aware of these provisions in relation to the change order process, the timing of the specified change order review, and the notice and dispute process under the contract terms. A well-drafted design build contract template will have the a proposal for the work and additional provisions for the scheduling of the work in relation to the project along with the notice of the issue relating to the change order in relation to the project contingency.

Where to source good quality design build templates

Locations where quality design build agreement templates can be obtained include construction industry professional organizations and online legal resources. These are the best sources for reliable and legally sound design build agreement templates. Organizations, such as the American Institute of Architects (AIAs), provides free templates to members. These templates are very reliable, since they are developed by experts in the field. Members can access these templates through AIA’s websites. For example, AIA’s "Contract Documents" can be found at aia.org/ContractDocuments/. The American General Contractors of America (AGC) also offers members templates of design build agreements.
Legal resources, including Books and websites, are another source of quality design build agreement templates . Books that are available through legal book stores may contain quality design build agreement templates. Unfortunately, these books typically are not free. For those with Internet access, many legal website offer free design build agreement templates. Law Help’s library of free legal forms for California is an example of such a resource. Other examples of sources of free design build agreement templates include Nolo etc.
The important thing to keep in mind is that online web search engine, such as Google or Yahoo!, can track down free design build agreement templates. It is important to be aware that the internet is filled with documents that are outdated, poor copies, or even outright scams designed to extract your money or information. So, it is better to stick with quality sources, such as the two mentioned above.