Traditional Bid-v- Design Build Comparison of Project Delivery Methods

In a fast-paced and highly innovative industry like construction, you might be surprised to learn that there isn’t just one “traditional” way to deliver a project....there are several.

And if you're picking up on the sarcasm, you're already ahead of the game. Project delivery methods can feel unnecessarily complicated, but understanding the basics can make a meaningful difference in cost, schedule, and risk.

So in part 1 of comparing project delivery methods, we’re going to do our best to simplify something you should understand as an owner before you start contracting with architects and GC's.

The Traditional Approach- aka 'Design-Bid-Build'

You’ll rarely hear someone say out loud that a project is being delivered using “Design–Bid–Build.” But this is the most traditional way construction projects get done and it’s easy to recognize once you know what to look for.

Here’s how you’ll know your project team is using the traditional approach:

Step 1: The Architect Designs the Project

The architect contracts directly with the owner and begins designing the project. During this phase, the project is developed into a complete set of drawings and specifications.

Step 2: Contractors Bid the Completed Design

Once the design is finished, general contractors go out for bid, meaning they solicit pricing from subcontractors based on the completed drawings.

Owners often invite multiple general contractors to bid, creating a competitive environment that can help drive pricing down.

However, there’s a catch.

If pricing comes back over budget, the owner has already invested in a full design without having a reliable construction cost established early on.

If you read our Means & Methods or Value Engineering articles, you may remember that architects are not responsible for identifying cost-saving construction approaches. Those decisions typically come from contractors — but in Design–Bid–Build, the contractor doesn’t enter the picture until the design is already complete.

That’s why this method often leads to redesigns, budget adjustments, and change orders once construction begins.

The Collaborative Approach: aka Design–Build

If Design–Bid–Build is the traditional approach, Design–Build is the streamlined version.

Instead of hiring an architect first and a contractor later, the owner hires one team responsible for both design and construction. In theory, the design-builder should be more efficient and collaborative.

Here are the high-level steps to Design–Build:

Step 1: One Team is Selected During Preconstruction

As early as the site selection phase, the owner can hire the design-builder to identify cost drivers, entitlement risks, and constructability constraints that align with real estate acquisition decisions.

During preconstruction, or the project planning phase, the design-builder helps evaluate feasibility, develop early budgets, and guide the design toward a realistic construction cost.

This often includes:

• Preliminary budgets

• Feasibility studies

• Early scheduling

• Constructability input

• Value engineering

Owners sometimes hesitate at this step because they are paying for services before construction begins. But this early investment usually leads to fewer surprises later.

Step 2: Design and Pricing Happen Together

Instead of completing the design before pricing begins, the contractor provides cost input while the project is still being designed.

As the design progresses and pricing becomes more accurate, the design-builder will typically establish a Guaranteed Maximum Price (GMP).

A GMP is the agreed-upon maximum cost for construction based on the current design. It gives the owner cost certainty while allowing the project to continue moving forward before every detail is finalized.

If the project is delivered under the GMP, the savings may be shared or returned to the owner depending on the contract. If costs exceed the GMP due to estimating or construction issues, the design-builder is typically responsible.

The GMP usually marks the transition from preconstruction into full construction, and it represents the point where the owner has a reliable project budget.

In many ways, the GMP replaces the traditional bidding phase...instead of multiple contractors competing on a finished design, the project team works together to develop a realistic price.

What Comes Next

Design–Bid–Build and Design–Build are the two most common ways projects get delivered, but they’re not the only options.

In Part 2 of comparing project delivery methods, we’ll cover CMAR (Construction Manager at Risk) and Multiple Prime Contracting: two approaches often used by experienced owners who want earlier contractor involvement or more direct control over the construction process.

Understanding project delivery methods will help you make better decisions before the first contract is signed, when the biggest project risks are still avoidable.