Our tips for a successful Design and Construct project
At Northrop, we regularly partner with builders on projects to provide the best value for the end client. Design and Construct (D&C) contracts are a great way to streamline projects by delegating responsibilities to the builder. That said, we’ve all had a few troublesome projects - held up with changes or costs that weren’t planned. Northrop Principal and Sydney Regional Manager, Todd Halliday, offers his tips to ensure a successful D&C project, minimising any potential dramas.
Be clear about what you want – early!
This is the foundation of a successful project. Putting in time upfront, clear communication and well-defined deliverables, are critical to ensure that the client and D&C team are on the same page. Detailed performance and outcome-based scopes need to define the “what” but not the “how” of the project. Lack of clarity often blows up into pricey variations later, or worse, the client may have to live with something that is not quite right. Whilst letting go of the design responsibility can be tough for the client, it’s essential for allowing the designers and builders to be creative and innovative so that they can deliver what you expect.
Be open about the big risks
The builder and their designers need to properly understand, accept and price any potential risks accurately. To do this, the client must be clear when providing the criteria for this risk.
From a financial point of view, it’s far better to address big risks prior to going to tender. It’s at this phase that the successful builder can adequately price the risk, propose alternatives and come to an improved agreement. It’s paramount that these risks aren’t hidden or lacking clarity in scope. The result? The tender team over prices them, potentially missing out on the project entirely, or fails to consider them properly, possibly leading to serious consequences down the track.
D&C tendering is expensive – use your time wisely!
Submitting tenders is an expensive process, and D&C is particularly costly because of the detail required upfront. We have found successful developers will already have relationships in place from which they select the top two or three to tender. Once a developer calls for more than three tenders, they inevitably are focused on the bottom line. There is less incentive for tenders to put significant effort in optimising the design and build. Save your time for worthwhile projects and avoid open tenders which can feel like a race to the bottom.
D&C can be a very enjoyable way of working as a team. We get to be actively involved and rewarded for collectively providing value. It is fun for both builders and design engineers. The partnerships bring new ideas and helps to lock down interface issues with design faster and less painfully. Laying good groundwork through quality relationships can transform a hard project into an easy one. Establishing clear client deliverables upfront, solving problems on the fly and avoiding disputes, are all achieved through open communication and respectful interdependence. Of course, part of that respect is shown by ensuring that everyone is rewarded financially in the process.
A well done D&C project can be a perfect example of a modern, common sense solution. At Northrop, we always enjoy being part of collaborative teams and look forward to more partnerships on innovative projects.