Points made in a recent attack on design and build could have been applied to any procurement route - and failed to recognise the many good things that D&B brings to the table
On 12 March, Gillian Birkby levelled some trenchant criticisms at poor old design and build. The case for the prosecution was well argued:
- People suggest it as a universal procurement panacea - which it can’t be.
- The myriad claims against D&B contractors (including Midland Expressway vs Carillion) show that the imposition of design risk (sometimes categorised as “design and dump”) does not always work.
- If the specification the contractor is required to produce is too detailed, there is little actual design involved. On the other hand, too light a touch in the specification can result in the contractor and employer having radically different expectations as to the required standard.
- D&B is not the best way to achieve high quality and best value for money; nor does it stop extension of time or loss and expense claims.
- Finally, variations during construction are likely to be more expensive in a D&B contract because the contractor’s method and sequence of working may not be the most efficient.
Are things really that bad? Actually, no. The first two criticisms aren’t really criticisms of D&B over and above any other procurement route. We’ve yet to invent a one-solution-fits-all procurement method and D&B isn’t unique in having disputes. Indeed, I’d disagree with Gillian’s suggestion that D&B was meant to prevent disputes. It was intended to give clients a single point of responsibility when something goes wrong.
Gillian’s third criticism seems to be more about making sure that, whatever procurement route is used, the appropriate amount of detail is included in the specification. But, again, that applies to any procurement route - take construction management and the Scottish Parliament as a high-profile example. CM is intended to work in situations where there should be lots of design development but, as that project showed, an inadequate level of specification and numerous changes meant that CM didn’t work in a situation to which it was theoretically ideally suited.
The advanced nature of the design at the time the contract is let is key to the success of D&B
Again, it seems unfair to level the next two criticisms (the fourth bullet point) against D&B alone. The search for the right level of quality at the right price is an elusive goal across the commercial world. High quality and best value are arguably subjective concepts in any event. I do know of employers who feel that they got both using D&B, but I know employers who think they achieved it using different procurement routes as well. And I wasn’t aware that any procurement route actually promised the possibility of no extensions of time or loss and expense claims. In fact, in order to avoid all of the problems associated with time being at large, expressly allowing for both loss and expense and extensions of time is prudent best practice, whatever the procurement route.
So far, then, I agree that Gillian makes valid points; I just think they can equally well be levelled at other procurement routes.
It’s in relation to variations where I think we disagree as a matter of principle. Most significant D&B projects will probably not begin construction unless the design has already been advanced to stage D or E. Up to then, the design will have been carried out by the employer’s consultants who will then either be novated to the contractor or supervise the contractor’s own designers taking things forward.
In either instance, the single point of responsibility will be established legally by the contractor accepting that the contractor’s proposals mirror the employer’s requirements and that any discrepancies will be at the contractor’s risk. There will also be (usually quite robust) negotiations to ensure the contractor assumes greater responsibility for certain events - unforeseen ground conditions, for example - that would otherwise entitle it to compensation by way of time or money.
The advanced nature of the design at the time the contract is let is key to the success of the D&B approach. The design should effectively be sufficiently advanced for the project to be built.
If it is, then the succession of variations Gillian refers to should not happen. So long as the employer doesn’t change its mind about what it wants once the contract is let, D&B can (and does) work very well indeed.
Stuart Pemble is a partner at Mills & Reeve