Design and build vs. build – which model is more profitable for the investor?

Before choosing a model of cooperation with a general contractor, an investor should understand the difference between the „design and build” and „build” systems. Each model has its strengths and weaknesses, but the „design and build” approach is increasingly being chosen by informed investors who want to avoid management and project completion issues. Learn when both options are applicable and which one is more advantageous.

Responsibility Remains with a Single Contractor

In the „design and build” model, responsibility for the entire project – from the design phase to implementation – rests with a single company. This way, the investor avoids the problems associated with shifting responsibility for errors or unforeseen situations between the designer and the contractor. In the event of errors, the general contractor cannot blame the designer, which helps avoid potential conflicts.

Cost and schedule optimization

When design and construction are handled by the same company, it allows for better cost and schedule management. The „design-build” model allows for more flexibility in making changes and optimizing the project during its duration, which helps avoid unforeseen costs.

In the „build-build” system, investors sometimes receive designs containing significant errors. The general contractor, who has the appropriate knowledge and is aware of the problems encountered in the project, often has to make corrections to ensure a smooth project completion. In such cases, it is also crucial that the bid is precisely described, taking into account all assumptions. This allows the investor to understand why one offer may be more expensive than another, and that this is because it complies with building regulations and will not lead to complications in the long run.

Convenience and reduced risk for the investor

Investors are increasingly choosing the „design and build” model for the convenience and certainty of having the entire project handled by a single company from start to finish. This approach allows them to minimize the need to contact multiple different companies and coordinators. In the „build” model, the investor often must personally oversee the arrangements between the designer and contractor, which carries a higher risk of errors and delays.

Functional-Utility Program

In public procurement, the key document in the „design and build” model is the Functional-Utility Program (FUP). It is prepared by the contracting authority in accordance with the Public Procurement Law. The FUP specifies the scope of the investment, the technical requirements, and the investor’s economic, architectural, material, and functional expectations. Information on the content of a FUP is described in the regulation of the Minister of Infrastructure of September 2, 2004. However, sometimes the investor creates the FUP themselves, which can pose certain risks if they have never dealt with something like this before and are unaware of the consequences of an improperly prepared FUP. Sometimes investors deliberately conceal details, hoping to receive cheaper offers. This can lead to less favorable products and delays in project implementation. Therefore, it’s worth commissioning the preparation of the PFU from specialists. The document should include all required analyses, expert opinions, and expert opinions, allowing the contractor to easily price the investment.