The Design and Build (D&B) contract is one of the most popular methods for organisations to use when constructing new buildings. In this article I consider some implications for the Design and Build approach caused by the coming generation of integrated smart buildings.
Overview of Design and Build
In the D&B process the customer, along with an architect, consultants and other specialists, carries out high-level designs (typically to RIBA Stage 3) to generate a specification for the building. They then tender for a main contractor to complete the detailed design and deliver the building for a fixed sum.
There are plenty of commentaries online about the pros and cons of D&B and I don’t intend to get into depth on them here. But briefly, the attractions are obvious, D&B removes risk from the customer and hands delivery to an organisation who are experts at construction. The main concerns are that the focus on cost may lead the contractor to provide the lowest quality of materials and systems to meet the specification. Additionally, changes made after award of contract may attract hefty costs. Indeed, it is sometimes said that the less tightly specified the building is the greater the scope for contractors to maximise profit margins.
An example of a negative result of D&B is a customer who finds they have a system (such as heating) in their new building that was low cost to install but is expensive to operate and maintain.
While issues such as this are frustrating and potentially costly, they generally do not impact the overall functionality of the building. The popularity of the D&B approach shows that the upsides are generally lower than the downsides for most customers. However, as the world moves towards the next generation of digitised smart buildings the D&B approach may be found wanting.
D&B and Smart Buildings
There is no single definition of a smart building, but we can think of it as a building which incorporates a range of digital technologies operating together with physical systems to improve user experience, operational performance and energy efficiencies. Smart buildings will also provide new capabilities such as predictive maintenance, utilisation measurement, user apps and new insights through data analytics.
The aspect I want to focus on here is one not generally discussed. Namely the way in which the various subsystem in a building are designed and selected under a D&B contract.
Normally, the main contractor will be responsible for developing detailed specifications for each element of the mechanical and electrical (M&E) systems. These include fire systems, HVAC, BMS, lighting, power, metering, IT networks, and security systems such as CCTV and access control.
In reality, the main contractor will often subcontract a specialist M&E contractor to design and provide the numerous M&E systems. These in turn are often then tendered to specialist subcontractors, sometimes as a whole, sometimes individually. As before, with cost being so important the subcontractors will bid as low as they can and then find to ways of maximising profit post award.
More importantly this division usually results in very limited ability to integrate across all system. In the vast majority of buildings today the level of integration between subsystems is minimal, with perhaps an alarm from one system triggering an action in another. But with Smart buildings the level of integration and cooperation between systems is critical to the operation of the building.
The current multi-layer supplier model that results from D&B contracts will likely result in a building whose systems cannot easily be made to operate together to provide smart capabilities. The tech might be there, but the building won’t really be smart.
So, what to do?
Obvious solutions include:
The use of common standards across all systems. Common standards make sense but in reality getting all suppliers across all industries to agree and implement such a set of standards will take a great deal of time.
Specify that all systems come from a single supplier. This approach makes some sense but there are few, if any, companies that supply every conceivable sensor, device or system. Additionally, early specification of supplier(s) takes away one of the key benefits of D&B.
The M&E Consultant generates a detailed building system design at a far earlier stage than at present. In general, detailed design cannot be done until the systems and equipment are selected as different suppliers’ systems often require different approaches. For that reason, consultants often shy away from doing detailed designs at an early stage due to the risks doing so might carry.
The move towards Smart Buildings will necessitate a change in the nature of the D&B model. Probably reducing the need for the main contactor to carry out as much design work. We may see D&B becoming d&B.
With less “wiggle room” to increase margins post award contractors will be faced with the same risks but less upside. Possibly resulting in prices for D&B increasing and representing a less attractive option for customers compared to other approaches.
Contractual models are constantly evolving. It will be interesting to see how they develop to enable the highly integrated smart buildings of tomorrow.