The importance of a good Specification in a D&B world

Design and build is a subject close to all our hearts and a procurement method that has evolved and been adapted (some may say corrupted) considerably over the last 10 to 12 years.

When first conceived this contracting method was offered by specialist firms with in house design and contracting expertise who dealt direct with a client from concept stage through to handover via a single contract based on a response to the design brief.

The benefit of having a single D&B contractor prepared to take the risk of agreeing a lump sum price prior to the design being complete, became very attractive particularly for cost consultants who were able to pass on risk very early in the process and for clients who wanted to start and complete construction as quickly as possible.

A key component in any contract is scope definition (i.e. what the client is going to get for his money), so how do you define scope when the design is in its infancy? Specifications define scope, so the question is really how do you prepare a specification with very little available design information – the answer is “carefully”.

The standard process for D&B is for the client to prepare the Employers Requirements to which tenderers respond with their Contractors Proposals – the issue is which takes precedent in the contract because any conflicting information will inevitably lead to dispute and claims. The answer has to be the Contractors Proposals because they represent the offer which the client chooses to accept.

D&B can work very well for certain types of building (i.e. not too large or complex) so long as the process is properly managed and the contract documentation is clear. The specification contained in the Employers Requirements therefore has to carefully set parameters for performance, elements of key visual intent and the process by which bids are evaluated and delivery monitored.

The contract specification should be a combination of the ER’s and CP’s that are  agreed between the parties representing the lump sum price. This specification is key to ensuring that quality is not diminished and scope reduced during post contract detailed design and construction.

This is where things have changed in that D&B is now widely used not in the way it was originally intended but simply as a way of transferring cost risk to a single entity regardless of what stage the design has reached. As a result we now see a design team appointed by the client up to as far as Stage E at which point the project is sent out for tender and the designers are novated to the successful bidder.

The designer and contractor may never have worked together before and the designers new client may have objectives that are more focused on time and cost rather than quality which is not a very happy situation.

From this point on all eyes are on the contract specification which the novated designer relies on to make his new client, the contractor, deliver a building that meets the quality and performance standards envisaged at the point of contract. The contract specification therefore has to:

  1. Ensure that the Contractors Proposals respond adequately to the Employers Requirements and that any changes are identified and agreed prior to entering into contract.
  2. Deal with elements that have not been designed such that the intent is clear and the price is sufficient to achieve the desired outcome.
  3. Avoid being overly demanding because post novation the designer will have to provide a solution on behalf of the contractor within his cost and time allowance.
  4. Be flexible and recognise that the contractor is within his rights to make changes so long as the requirements of the contract are met.

Design and build can be a very successful contracting method but it comes with a health warning that if not treated carefully can result in disputes around quality and value for money.

Nick Schumann

Nick Schumann

Founder and Director at Schumann Consult Ltd
Having built the world’s largest specification consultancy and developed innovative methods for the implementation of new design management techniques Nick is considered to be one of the world’s leading authorities in his field writing, lecturing and providing advice to many industry leaders.
Nick Schumann

Posted on January 29, 2014 in Specifications

Response (1)

  1. Steve Coates
    February 3, 2014 at 6:18 pm · Reply

    I am a big supporter of this type of procurement when implemented correctly. Like any procurement approach on complex development work, it’s a total nightmare for clients and the entire supply chain when implemented poorly.

    Most clients want to transfer the risk onto a worthy contractor capable of accepting the risk and delivering on their proposals. Both parties rely on their consultant team to help them achieve this intent. Often the same team! Which is why the scope is so critical.

    Clients generally desire a product on time and budget that aligns with a funded business case, so transferring the risk appropriately and at the right time for a worthy premium is attractive. However, it must be documented correctly and be well understood to drive success across the entire development team.

    Sadly I see this procurement method and others delivered very badly far too regularly, with a complete lack of understanding across the whole supply chain re the risk being transferred and adopted, with appropriate timing of risk transfer and method completely mis understood. Much more can be done to support and educate the full supply chain (especially in less mature markets) from the outset of design, from Client to sub contractor, long before tendering the project. This will help everyone properly understand their project role and the risk being transferred and adopted, in order that appropriate funding is sufficient for success to be delivered by and for all involved.

    D&B can deliver success to all involved across the supply chain, in lieu of lawyers unravelling a mess at the end of the day which none of us want to see. A well understood, successful development starts with a procurement approach aligned to the risk profile of a client from idea inception to completion, aligned at all stages and through all processes associated with development. Changing the procurement approach late on is not encouraged! Alignment and understanding across a collaborative, Top Team will drive a higher likelihood of a win win for everyone involved with great work.

    We all want to enjoy the development process and should be proud of what we create as we build the environment around us, in lieu of arguing what we did and think we did adopt, in terms of scope, role and risk.

    Having delivered this form of procurement regularly and successfully, Nick is a worthy partner to lead in support of the whole development team to help get this right and I look forward to hearing more about how you achieve this within and for successful teams from those reading the post!

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