When planning a home renovation project, it’s natural to wonder whether the price you see in a proposal is reasonable and competitive. Even after getting multiple bids, you may still doubt whether the proposed cost represents the best value.
Unfortunately, many homeowners enter this process under the assumption that a design-build approach is more expensive than design-bid-build, which is the traditional project delivery method. But is that really the case? Is design-build more expensive?
The answer is no. Design-build projects are not inherently more expensive, and, in fact, when you consider the final cost and not just the initial proposal, design-build projects can actually be more cost-effective and a better value for most home remodels.
In this post, I’ll get into the details and explain three reasons why the design-build project delivery method is better for cost control than the traditional design-bid-build model.
What Services Do Design-Build Firms Offer?
Design-build is an integrated project delivery method in which one firm handles both the design and construction phases. Under one single contract with a fixed price, a design-build firm includes all services, including:
- Collaboration with the homeowner to understand project goals
- Conceptual design, including any necessary review by an architect or engineer for design aspects involving a building’s structural support
- Detailed construction plans and project delivery roadmap
- Permitting
- Site preparation, such as demolition, disposal, and remediation
- Selection and acquisition of materials
- Construction administration, including oversight of subcontractors
- Project management and ongoing communication throughout the building process
- Inspections
As this demonstrates, the design-build project delivery method is a full-service approach. Throughout the process, the design-build team can collaborate, leveraging the expertise of their in-house designers and construction team.
For homeowners, all of this work is included in a single price rather than broken down into individual line items. That may make the initial budget seem higher, but, as I’ll explain in the next section, design-build actually offers more control over costs compared to the traditional design-bid-build approach.
Read more: Kitchen Remodel Cost Guide: A Guide for Homeowners
Calculating Costs for a Design-Bid-Build Project
Under the traditional design-bid-build model, you have two different sets of costs to consider. First, you pay a designer or architect for the design work, and then you pay a general contractor to complete the construction. Along the way, there’s a considerable risk of cost inflation that makes your final price much higher than anticipated.
The designer or architect can’t perfectly predict what a general contractor or construction company will charge. They may give you a best guess, but the only thing they’ll know for certain is their own design fee. With the design team and construction team working separately, there’s a good chance that the price of construction will exceed your expectations when you actually get proposals.
On top of that, it’s well-known in the construction industry that what a general contractor bills at the end is frequently higher than what they put in their proposal. This is a major flaw of the time and materials contracts that are used for most design-bid-build projects.
These contracts are itemized, so everything seems open and shut. However, if the construction involves more labor or materials than expected, that just gets tacked onto your bill. Unfortunately, the bidding process encourages general contractors to underestimate their costs to win the project.
In the end, this is a major reason why there’s a misconception about design-build being more expensive. Since a design-build firm shows you the full cost upfront, the price may seem higher. But that’s a fixed price. In contrast, the initial price you see from a contractor is just an estimate.
When you consider the actual final cost of hiring a designer and then a general contractor, the scale starts to tilt in favor of design-build.
3 Reasons Why You Get More Value from Design-Build Projects
While I could create a long list of things I like about design-build project delivery, I want to focus on three specific reasons why it offers homeowners the most value and highest return on investment.
Reason #1: Cost Overruns and Controlling Total Project Costs
When looking at project costs, you have to compare apples to apples. That means considering the actual total cost at the end of the project, not just the proposed cost. With this context, you realize that design-build comes with more cost control and less budget uncertainty than the design-bid-build method.
With a design-build project, you know that the fixed-price contract covers everything. You don’t have to scour the construction documents to analyze each line item. As I explained in the previous section, the line items on a time and materials contract don’t tell you much about the true final cost of your project. If the general contractor determines that there’s a design issue or if a subcontractor requires more time to complete a task, it just keeps adding up. Even on small projects, that can drive up the total cost above what you were prepared to pay.
Ultimately, a design-build contract puts the risk of cost overruns on the design-build firm. A design-bid-build contract puts that risk onto the homeowner.
Reason #2: Efficiency and Convenience
The design-build process facilitates effective coordination that enhances efficiency. When it’s time for construction work, the construction team is already well-versed in the design plans and the project requirements. Schedules are choreographed in advance, making for a quicker transition to actually starting the construction phase.
This can save you both money and time. With the design-bid-build method, there’s always a risk that the contractor will have design concerns that require back-and-forth communication with the designer. This can gum up the works, especially if there’s disagreement about design modifications. And if changes are needed, that can, of course, make the construction project come in over budget.
On top of being more cost-effective, design-build projects frequently get done faster. With a fixed-price contract, a design-build company is incentivized to deliver the project promptly. And with more cohesive and coordinated planning from the get-go, it’s easier for them to prevent delays that can drag out the project’s length.
Reason #3: Better Communication
Value isn’t just about the price tag; it’s also about what you get in return. With design-build teams, you tend to get far better communication, which itself is a major source of value.
Design-build firms are relationship-driven, so they invest time in listening to your needs and working closely with you to optimize the project plan. This means that you’re more involved during the design phase and have the opportunity to ask questions and make sure your vision is reflected in the conceptual design and construction drawings. That same commitment to communication continues in the construction phase so that you know how things are progressing.
Especially with custom projects or large projects, it’s important to trust in the people working on your home. Design-build firms make building trust a priority, and that’s reflected in fluid and honest communication throughout the design and construction phases. It may be hard to put a dollar figure on that, but client after client has told us that they find it truly valuable.
Is Design-Build Always the Right Choice?
It’s important to debunk the myth that design-build is always more expensive, but that doesn’t mean that a design-build approach is best for every project. While I think most significant home remodels are better served with a design-build process, there are situations when the more traditional model may be more appropriate.
For example, small or cosmetic changes may not require the collaborative design and construction services provided by a design-build firm. There are also some circumstances, such as when filing a claim under your homeowners insurance, when you may be required to show that you got multiple bids from different contractors.
Getting the Best Value in Your Remodel
Upscale Remodeling is a design-builder with deep ties to the Ithaca area. We specialize in custom, high-quality projects that require experience and expertise. Whether it’s upgrading a lake house or renovating one of this area’s historic homes, we pride ourselves on offering the highest level of service to our clients.
If you’re planning a remodel, I encourage you to seriously consider the design-build approach. In my opinion, it offers better results without being more expensive.
To see examples of our remodeling work, you can check out our portfolio, and if you’re ready to get started, get in touch to schedule an appointment.
