What a Design-Build Contract Covers

The Six Parts of a Design-Build Agreement

Contracts differ between builders, but a sound design-build agreement always answers the same six questions.

1. Scope of Work: What Gets Built

The scope lists what is included and, just as importantly, what is excluded. Vague scopes produce disputes. A good scope names rooms, systems, materials and finishes.

Read the exclusions first. That is where surprises hide.

2. The Fee Structure: How You Pay for Design

Design can be billed as a fixed fee, as a percentage of construction cost, or rolled into the build price. Each is legitimate. You need to know which one applies.

Ask what happens to the design fee if you decide not to proceed to construction.

3. Allowances: The Numbers That Move

An allowance is a placeholder for a cost not yet decided, such as tile, lighting or appliances. If you select something above the allowance, you pay the difference.

Low allowances make a bid look competitive and then raise the final number. Ask what each allowance assumes in real product terms.

4. Change Orders: How Decisions Get Repriced

A change order records a change to scope, cost and schedule. It should be written, priced and signed before the work happens.

Confirm the markup applied to change orders, and whether schedule extensions are automatic.

5. The Schedule and What Extends It

A schedule should name a start date, a substantial completion date, and the conditions that extend it. Weather, permitting delays and client decisions are common causes.

6. Warranty and Completion

The contract should state what the warranty covers, how long it runs and how you make a claim. It should also define substantial completion and the punch list process.

What Design-Build Removes From Your Risk

Under two separate contracts, a conflict between drawings and construction becomes your problem. You sit between two companies that each blame the other.

A design-build contract removes that gap. One company produced the drawings and one company builds them.

Documents You Should Receive Before Signing

• A written scope with named inclusions and exclusions
• A line-item budget, not a single lump sum
• A schedule with a start date and a completion date
• Proof of licence and insurance, current and in your state
• The warranty terms in writing
• A sample change order form

Red Flags in a Construction Contract

• A single lump sum with no breakdown behind it
• Allowances with no product specified
• No written change order process
• A large deposit demanded before any drawings exist
• No defined completion date

Let’s Build Together, Start to Finish

We provide a detailed scope and a real budget before work begins. Know what you are getting, with no surprises.