Also known as D&B; design, manage and construct; or even dump and build; it means the contractor is responsible for design. It includes any contractor's design portion of a lump-sum JCT80 contract, and accounts for about 30% of contracts let by value.
D&B contracts include JCT81, ICE Design and Construct, NEC Design and Build and GC/Works/1 Single Stage Design and Build. Almost every family of contracts has a design-and-build variant, and those that do not can be adapted.
Obviously, this resides with the contractor, although most forms of contract assume that the client will have its own design team produce "employer's requirements" and employ a contractor to complete the detailed design.
The employer can ensure complete single-point liability for the design by novating its design team's appointments to the contractor. This has been dubbed "dump and build" because the client dumps design liability on the contractor without allowing it to contribute to the design process.
Contractors try to avoid implied liability for "fitness for purpose" because if the contractor warrants that the building will be fit for its purpose and it is not, the employer does not have to prove negligence in the design or workmanship in order to succeed in a claim.
But these efforts may be misguided, because if a contractor knows a building's purpose, such a term will usually be implied in a design-and-build contract. Without a specific exclusion of fitness for purpose, no amount of tinkering with the words of the contract will help.
The contractor has an obligation to complete the work; the cost of "design development" - often a euphemism for items omitted from the agenda - must be met
It is very difficult for a contractor that has underpriced a design-and-build contract to recover. Under JCT81, for example, the contractor has a general obligation "to complete the works", so even if the client gives the contractor information that turns out to be incorrect, the contractor will have to redesign at its own expense, provided the employer was not negligent.
If the employer changes its mind about what it wants, it must pay, but the cost of "design development" – sometimes a euphemism for items omitted from the tender – must be met by the contractor.
In practice, the scope for a contractor to obtain an extension of time with loss and expense is severely curtailed. Under JCT81, the contractor's task is "to complete the design for the works". Even if the detailed design is sublet to specialists, the substantial task of co-ordinating the various design elements almost always resides with the contractor.
This is particularly onerous in design, manage and construct contracts where the contractor, despite having sublet the design, cannot easily pass down responsibility for delays caused by its failure to co-ordinate drawings. In those circumstances, it faces a liability for liquidated and ascertained damages that would not be accepted by a design consultant in the same position.
Design consultants were once thought to be reluctant to work as "subcontractors" to contractors, but relationships between design-and-build contractors and their consultants have been surprisingly harmonious, possibly because they are all working towards the same goal.
Christopher Hill is managing partner of solicitor Norton Rose's construction and engineering group.