What Is a DBIA Contract?
DBIA contracts are agreements used in construction projects based on a "design-build" delivery method. Design-build is an alternative to the traditional "design-bid-build" project delivery system, where design and construction are separate contracts under the control of the owner. In contrast, design-build integrates design and construction under one contract, which can promote collaboration, efficiency , and cost savings.
The Design-Build Institute of America (DBIA) is an industry organization formed in 1993 to advocate for the design-build project delivery system and the progression of best practices within the industry. DBIA is a national organization with over 20 regional chapters, all of which work closely to increase the use and acceptance of the design-build system. DBIA contracts follow the design-build model, and provide a set of terms and conditions to be used in conjunction with a DBIA form agreement.
The Different Types of DBIA Contracts
DBIA has a whole series of contract forms available for download. As with the standard AIA forms, they are easy enough to navigate through at the website. But they are also a large enough number that it is worth reviewing what is available as a whole.
DBIA Standard Form Design-Build Documents and Templates
DBIA Standard Form of Agreement Between Owner and Design Build Entity for use on a Design Build Project (DBIA Document No. 535-2022)
DBIA Standard Form of Agreement Between Owner and General Contractor for use on a Design Build Project (DBIA Document No. 540-2022)
DBIA Code of Procedure for Resolution of Disputes on a Design Build Community DBIA Standard Form of Agreement Between Owner and Designer/Builder (DBIA Document No. 545-2022)
DBIA Standard Form of Agreement Between Owner and Integrated Project Delivery Entity (DBIA Document No. 550-2019)
DBIA Standard Form of Agreement Between Owner and General Contractor for use on a Design Build Project (DBIA Document No. 580-2022)
DBIA Standard Form of General Conditions of Contract for use on a Design Build Project (DBIA Document No. 610-2022)
DBIA General Conditions of Subcontract for use on a Design Build Project (DBIA Document No. 620-2022)
DBIA Standard General Conditions to The Contract Between Owner and Architect/Engineer Design-Builder (DBIA Document No. 630-2022)
DBIA General Conditions of Subcontract for use on a Design Build Project (DBIA Document No. 620-2022)
DBIA Standard Form and Model Forms of Agreement
DBIA Standard Form of Agreement Between the Owner and the Engineer/Architect for use on a Design Build Project-Draft (DBIA Document No. 700-2022)
DBIA Standard Form of Agreement Between the Owner and the Engineer/Architect for use on a Design Build Project-Draft (DBIA Document No. 705-2022)
DBIA Contract Templates
DBIA Standard Form and General Conditions of Agreement between Owner and Design Builder for use on a Design Build Project (DBIA Document No. 530-2022)
DBIA General Conditions of Contract Between Owner and Contractor for use on a Design Build Project (DBIA Document No. 600-2022)
DBIA Design Build Contract Form-Proposal Request (DBIA Document No. 650-2022)
DBIA Standard Design Build Template Agreement with Owner (DBIA Document No. 680-2022)
DBIA Draft Design Build Standard Form of Agreement between Owner and Design Build Subcontractor for use on a Design Build Project (DBIA Document No. 690-2022)
DBIA Design Build Templates
DBIA General Conditions of Contract Between Owner and Contractor for use on a Design Build Project (DBIA Document No. 600-2022)
DBIA Draft Design Build Standard Form of Agreement Between Owner and Design Build Subcontractor for use on a Design Build Project (DBIA Document No. 690-2023)
DBIA has a lot of DBIA related contract forms!
Pros and Cons of DBIA Contracts
One of the most unique advantages of the Design-Build Project Delivery method is that it allows for the flexible and adaptable approach to a particular project. Design-Build for a construction project is often the best most economical delivery method because it eliminates the issues associated with delivering via the separate Design, Bid and Build method (with the three distinct separate contracts).
The Design-Build method and DBIA contract also often provide a more even distribution of risk and therefore it often reduces the risk that could be associated with each contracting entity.
The manner in which the contract is drafted, will also likely mitigate the risks associated with the project. The contract will identify things such as scope of work, the payment schedules, what happens if there is a change of scope or if there is no budget or schedule adherence.
On top of these things that I’ve already mentioned, a recent article provides one more, less obvious, advantage to the Design-Build method, compared to traditional Design, Bid and Build methods: a single point of contact. The personnel for a Design-Build project will likely be extremely successful at their jobs and the team will perform extremely well as each element of the project naturally flows from one phase to another. Authors of the below-referenced article claim that the Design-Build approach enables a higher level of project management coordination – because the Design build professionals need to ensure that design and construction are cohesive.
This hybrid method of delivery produces better products and projects than traditional methods. Benchmarking surveys from DBIA found that Design Build saved 12.9% in cost compared to the estimated cost. Further, surveys from Construction Industry Institute (CII) indicate that an average of 30% of projects reported time savings exceeding 10% and that almost half (47%) of the entire population of projects reported schedule savings of at least 10%.
How to Select the Ideal DBIA Contract for Your Project
The process of selecting the right design-build contract is influenced by a variety of factors. When preparing to undertake such a project, be sure you have a comprehensive understanding of your project, its size and scope, your stakeholders and the way the project will be financed when deciding which DBIA contract best suits your needs. A DBIA contract is best used on a project where you are looking for an expedited time frame for completion, and where you can work cooperatively with the design-builder to achieve that end. The complexity of the project is not as important a factor when determining whether to use a DBIA contract, but will determine which type of contract to use. If your project is of substantial size, a longer time frame may be appropriate and you should consider using a two-step form of contract to allow for a fixed price at the completion of the design process.
Key Clauses to Look Out For in DBIA Contracts
The Design-Build Institute of America has developed a series of model contracts that are commonly used throughout the country. DBIA’s contracts cover a variety of project types, including:
In general, the provisions in a DBIA contract or agreement will address the following issues:
Scope of Work
DBIA agreements typically contain a detailed description of the scope of work to be performed by the design-builder, including, but not necessarily limited to, a narrative of the work to be completed, or a building program, a statement of the architect’s responsibilities and schedule of services to be completed by the architect; requirements regarding the production of design documents; submission requirements for structural, electrical, and mechanical reports; utility service requirements; and project permitting requirements .
Timeline
DBIA contracts include a project schedule that defines the commencement and completion dates for the various project phases. Included in the timeline are the project phases and/or date milestones for:
Dispute Resolution
DBIA agreements contain an exclusive provision requiring binding arbitration of all claims or disputes. In addition, it is also important to note that DBIA agreements state that the dispute resolution process is the "exclusive means of redress" for any dispute that may arise. However, the parties are free to agree in writing to settle their claims outside the contained dispute resolution procedures.
DBIA Contracts Versus Traditional Construction Contracts
The DBIA contract structure is vastly different from the traditional construction contract. A traditional construction contract generally includes a scope of work, timeline, and a set price. For a traditional design-bid-build or design-build delivery method, the owner typically engages an architect and a construction manager separately, then has these professionals assemble and negotiate the contract. If there is an issue down the line, the owner is often stuck between the two sides during what can become a long and costly dispute.
In contrast, a Design-Build Integrated (DBIA) contract is a single contract that structures the project into phases: a preliminary phase where the initial design, system formulas, and systems selection are agreed upon, a main design phase, and a construction phase. The beauty of the DBIA contract is that, for most projects, if a change occurs during the design or construction phase, the owner does not necessarily have to pay time and material or labor costs to fix it. Instead, the cost is apportioned between the parties by a set percentage, typically 50% each. A DBIA contract or one that incorporates the DBIA contract creates a set framework that is much clearer than a traditional construction contract.
Similarly, the DBIA contract distributes responsibility differently. In a traditional contract there is an inherent risk that the owner may be forced to shoulder when the architect or contractor fails to act. Trying to untangle who is responsible for what can be challenging and expensive. The DBIA contract allows for the parties to distribute and allocate responsibility early on in the design process. For example, the parties decide up front if they want to use the "Cost Plus" contract or a "Completely Open Book System." In addition, any disputes with subs, vendors, and relevant documents will go through the main contract to DBIA and be subject to mediation. Mediation is quicker and cheaper than litigating claims in court.
Finally, a DBIA contract is more flexible than the traditional contract. Because the DBIA contract is so much simpler, it is easier to work through any changes to the project. A DBIA contract explicitly prohibits any changes to the project conditions by a contractor that may impact the contract price. If the parties do agree to modify the project, the DBIA contract gives explicit parameters for the process, how to distribute the costs, and the percentage rates to compensate each party. Therefore, the contract process between the parties is streamlined and pre-negotiated.
Common Issues Associated With DBIA Contracts
DBIA contracts certainly have their challenges, pitfalls, and traps for the unwary. A few common problems can be identified, however.
The most fundamental problem with a DBIA contract is contractor pricing and evaluation. Because the Department of Energy does not set aside money for each planned activity, but instead pays contractors based on invoices submitted, the contractors have an incentive to do whatever it takes to maximize their billing. The contractor can dramatically increase its fees by justifying its desire to add personnel or effort due to "unexpected" costs, scope changes, and other problems. And trying to keep up with all the work performed by the contractor can be a full-time job in and of itself.
Similarly, the DBIA contract has no schedule requirements. If capturing contract earn value in the payment process provides the project owner with no assurance that the project is on-time or meeting its completion milestone, then is the owner truly protected? Worse yet, contractor delays, some experienced and known by the owner, are often blamed on the owner instead of the contractor.
Another common complaint of project owners with DBIA projects is the feeling that they are getting taken to the cleaners. Change orders by the contractor tend to be very expensive. And, the calculation of what constitutes a change order is often highly subjective. These subjective decisions tend to be made by the contractor’s employees who have a vested interest in the decision, which makes it a difficult pill for the owner to swallow.
Finally, DBIA contracts tend to produce complex documents – change orders with contract modifications and supporting information in appended updates that appear more like a legal brief than an invoice. Truly, good luck in understanding or controlling that "paper trail." With a horrendously long and expensive data base, it will take a paralegal a small fortune to breakdown what the contractor actually did and compare that to what was originally contemplated.
There are solutions to all of these problems. In fact, there are as many solutions as there are problems, which is why successful DBIA projects almost always include a savvy project owner.
The Future of DBIA Contracting
The next generation of DBIA contracting will likely involve advanced technology tools and platforms. Building information modeling (BIM), artificial intelligence, drone site inspections, and connected devices will soon be seen as standard tools on DBIA projects. Through these technologies, contracts will more readily allow the legal enforcement of a collaborative, technology-based ecosystem. This foreshadows a future where design-build contracts are not isolated documents but rather living, data-oriented contracts that will address what is built, how it is built, and when progress occurs. This will, for many, eliminate the need for litigation.
As the inherent benefits and continuing industry adoption of DBIA projects persist, it is likely that specialized design-build contract delivery systems , such as the AIA A141 or the AGC’s AIA A133, future iterations of the Virginia State Standard Contract Form, and other new contract provisions that may emerge, will be offered to owners in the coming years. These contracts will likely be based primarily on an integrative approach, whether it is driven by a project delivery system or streamlined contractual terms. Enhanced contractual language will try to prevent disputes, shift more risk to the design-builder, and include contractual remedies for complex claims. Additionally, these enhanced contracts will anticipate and mandate the use of advanced technology. For example, standard, widely used contract provisions relating to BIM and related technologies will grow in number and complexity as the technologies themselves become more recognized and accepted.