Is the Residential Construction business model obsolete?
In practice the Design/Bid/Build model was never functional but evolved from commercial practices as the only model available. D/B/B at its core contains the three elements of any contract or project; value, cost and time.
· Design establishes the value the project objective
· Bid objectifies the cost of the work
· Build is the management process
With these elements you have a project and a project team. So, you are all set, lets take a closer look at roles and responsibilities.
Design is obviously the architect; their mandate is to turn the clients vision into a functional space and a set of documents by which it can be built. Cost and time are considerations but not the primary intent. If the client has the time and money the architect will design to the nth degree and do so joyfully, because design is what they love to do and what they have been hired for.
Bid does not establish the cost; the bid only reports the cost of the design. Contractors may appreciate a design but ultimately, they do not care about the design or the cost. Their mandate is construction and the management of the work. Experience in certain types of design may give them insight into more cost-effective management methods but the builder is not expensive, the design is. Seeking out a “cheaper” builder is not the way to save money on a project.
Cost is the fait-de-complete of the project triad and this responsibility falls to the client, it is ultimately their dream and their design. However, the client is typically the least qualified member of the team to understand and manage the construction cost. Thus, they rely on input from the architect and dream the bids will come in lower than expected. The is not management it is wishful thinking. You would no plan a vacation, knowing you have a budget, you check air fare, hotels, and venue costs know what spending cash you have left for the trip. The D/B/B model puts you in the hotel before you know what the trip is going to cost.
D/B/B works to certain extent in commercial construction as the design parameters and limited and decisions are less emotional, Picking tile for the men’s rooms not the same as cabinets for the Chef’s kitchen. By its nature design is different and therefore the bid is different, every answer is not there, assumptions will be made and evaluating the cost will be more difficult.
The solution is collaborative construction, residential construction is a team effort in order to keep design, cost and time well managed. The mind set is skewed because the inking is the builder is the key to the cost and therefore must be brought in late and managed with constraint, so they don’t take all the money, The are only the cost accountants so if you want to know what it will cost during design ask the folks who work with the costs every day. Utilize you builder as a consultant and you will know the cost of the work as the design progresses and can adjust accordingly.
Ultimately the client’s responsibilities do not stop at managing cost. The are starting a small business and assume all of the associated management responsibilities, the solution is an owners representative, a construction professional to oversee the consultants, schedule, cost and quality. Construction skills you they do not have or need to acquire.
Build your team, build your home.