The Design Builder's Blog

Thoughts On Design/Build From a Remodel Coach for Homeowners

 Guest Blogger: Reva Kussmaul, owner of Remodel411.  Reva began her practice as a remodeling coach in 1998.  Reva believes that remodeling should be a 50/50 relationship and if it wasn’t cultivated as such - nightmares can occur.  According to Reva, those nightmares are typically caused by a gap in communication and it could come from either side.  For Reva it became quite obvious that someone who knew about and cared about both sides was a missing piece to the puzzle of remodeling nightmares.   So, she decided that both homeowners and contractors could use a coach when it came to their relationship - the remodeling relationship that is.  Check out her book: Remodel 411: Secrets to a Successful Remodeling Relationship

Thoughts On Design/Build From a Remodel Coach for Homeowners

 As a remodel coach, I recommend homeowners work with a design/build firm when they’re undertaking larger projects because I find it to be quite beneficial and all-inclusive in that you have a designer who knows how to build and create plans from that knowing and you’re working with a contractor who has their hands on the design process and is in communication around that process at all times.

The beauty of a design/build firm is - it’s beneficial to all parties. It’s much easier for the contractor to be involved with a team so they’re not shouldering all of the work themselves, thereby opening up time for discussions with the client about possible challenges or changes.  It’s beneficial for the client because I’ve found they feel like the contractor has more time to actually listen to their needs.  That’s the purpose of a great team - creating win/win scenarios.

I find it is quite challenging when working with a designer/architect who isn’t part of the contractor’s team and, really, isn’t necessarily on the homeowner’s team either. It’s not that they’re against either of those entities but if they’re working individually they’re about creating a plan for a job and they are simply not always up on the cost impact of possible changes/designs they’re suggesting. OR, they give a very low-ball cost and then the homeowner is blown away when the contractor costs it out accordingly.  I suggest homeowners work with a firm that is going to have all of their team members on the same page, at the same time, in the same place.  

The other suggestion is there be a separate dedicated project manager on a large project as well.  This works well because when someone’s job is project managing that is what he or she is doing all day.  It makes such a difference to have that liaison between the contractor, designer and homeowner.

I’ve worked with designers who charge $3,000 for a bathroom design including tile lay-out and then want me to make the decisions about the actual lay-out, correct measurements, etc.  They were charging money for something they really weren’t that knowledgeable about and didn’t feel confident in.  When it’s a design/build firm that’s all inclusive, when one member of the team completes the initial design, the person actually drawing plans steps in and it progresses from there in an orderly fashion.

I don’t feel it’s as necessary to work with a design/build firm when doing smaller projects, however, if a home owner has used a larger firm for a long-term project, had an amazing experience and already trusts them with their home, I always recommend loyalty.

One Person's Opinion: Robert Wright

 His Dad a civil engineer, Rob has grown up around construction sites in Canada from a young age. In the early 1990’s, he and his Dad set up a construction company and took on projects in the commercial and residential fields.  In 1994, he joined and took over Citadel Renovations in Ottawa. He has been active in the Greater Ottawa Home Builders Association for many years, including holding the position of Renovation Council Chair in the past and now sits on the Health and Safety Committee.  He also continues to volunteer at Algonquin College on the Advisory Committee of the Building Construction Technician program.

Design Build Definition

Everyone seems to be getting on the design build bandwagon lately.  Strange, I was talking about it and trying figure it out over 20 years ago.  The more things change…..

What is design build anyway?

I have in past newsletters suggested my thoughts on what design build is.  Basically its a process where the homeowner(in this case); the builder, and design pro in a collaborative process ensure the homeowner receives value for dollars invested; and the design to project completion experience is pleasant.

This seems to me to be a valid starting point for the design build definition.  We would all look at the various parts of this and based on our experiences have some comments about how to improve this – usually to have our viewpoint take priority.  This conversation is ongoing and I would strongly suggest that our professional associations should get involved in this conversation and set the standard.

This is not a new idea; the architects do it; the engineers do it; doctors do it; and everyone’s favorite whipping boys - lawyers do it also.  I have long considered myself a professional, and think its high time that, we in the construction industry and the renovation industry in particular, need to be considered professional and that what we do is an honorable way to earn a living.

So what is the alternative?  Have something imposed on us...

Who is going to impose this definition on us?  The least evil choice is going to be the insurance industry.  At least they have contact with us, try to understand us, take our money and provide a service in return.  You can also sit down with your insurance provider and discuss how you can cut costs and increase protection.  This allows us to come to an agreement we can live with.

Who else is going to impose on us?  Courts – they don’t like us, because they don’t understand us.  What makes perfect sense to us makes no sense to a judge and to most lawyers.  So what happens when you get an unhappy client and a lawyer that doesn’t understand construction?  A whole lot of pain for you, and a new way to do things for all of us because our lawyer said so.

Worse case scenario is to have the government impose it on us.  Do I need to say anything but lead? 

So what can you do about this? 

Get involved and insist that your HBA knows about it, gets it sorted and ensures that it is accepted.  Its about your controlling the situation and not the other way around.

Managing Risks With The Right Design/Build Insurance Options For Your Business

Managing Design/Build risks for any entity is something that requires careful consideration. There are many differences between design-bid-build projects and design-build projects. One of the most prominent differences is insurance coverage. In both types of projects, all parties share goals and yet have individual concerns. Since contractual relationships in these two types of projects vary, so do the methods of balancing risks.  If offering true Design/Build, the business owner should identify the risks typical to the project types, work practices and customer types the business pursues.

For insurance issues, we turn to our friend Tom Messier, CIC of Mason & Mason Insurance. He has recently published an article delving into some of the particulars of managing design-build risk. In the full article Tom details things such as understanding liability concerns, solving insurance deficiencies, and the importance of bonding.   Here are a couple of highlights from the article that Design/Builders should be aware of if considering Design/Build Insurance options:

Understanding Liability Concerns

 If a problem arises when the owner has separate contracts with the designer and constructor, it is easier to distinguish whether the problem is a design flaw or a construction mistake.  With Design/Build, that separation no longer exists.  The Design/Builder should consider insurance coverage that protects his/her business and also needs to know what coverage options are available and should be carried by the subcontractors the business partners with.

Identify Insurance Deficiencies

For those who are relying on General Liability coverage alone, it is essential to have modifications made to the policy to cover the responsibilities inherent with Design/Build.  Since laws are different from market to market, and because the individual options available are complicated, Tom suggests discussing the specific needs of your business with an insurance agent knowledgeable in construction and specifically the considerations when offering Design/Build.

Unfortunately for me I had to learn about Design/Build Insurance coverage the hard way.   Had my business added Errors and Omissions coverage before an alleged design problem surfaced on a project, my insurance policy would have covered the legal representation as well as the cost of that representation.   The lesson learned was far more expensive than the insurance coverage that would have protected my business and my profits.

Guest Blog: Design/Build From A Salesperson's Perspective 

Guest Blogger: Kim Holmberg has been selling custom new homes for 20+ years in the Minneapolis, Minnesota area.  The majority of those years was with The Charles Cudd DeNovo company, including 5 years as their Marketing Director while continuing to sell.   Embracing the change in our industry due to the recession, Kim then went to work for a Design Consultant for a regional company that finishes basements.  Recently she moved on from that company and took her experience to Lecy Bros Homes and Remodeling, where today she designs and sells custom finished basements, kitchens and master baths.  

A Design/Build Company

By: Kim Holmberg

The subtle move in the marketplace, of the traditional “hire an architect to design, then find a contractor to bid, then back to the architect to revise because the price came in way over budget, then back to the contractor, and then maybe, just maybe start building”, has changed.

Today, consumers demand service.  They want to know from their very first conversation that their needs, desires AND budget are all being considered throughout the process.  I design and sell for a Design/Build firm.  From my perspective, we offer the very best of the process, by combining the design, pricing and the build component into one single element.

It’s a very simple and effective process actually.  The prospect calls the company, saying they’re interested in getting their basement finished, kitchen remodeled, or thier bathrooms remodeled, etc.  I set up that first meeting ideally with BOTH the decision-makers at the same meeting.  We look at the space, talk about their family needs, how they live, how they entertain, etc. I have them sign a very simple design agreement and collect a small fee to help defray the cost of our design time. We discuss budgets (I often spend some time educating prospects on local averages). Assuming all are realistic, I then get to work designing typically two concept plans for them to review.

But from the moment I meet these prospects, I’m aware of their budget, schedules, needs and wants.  Because I know what materials cost, and what labor costs are, I’m able to help guide the design into something that will work for my prospects. I also have the ability to bring my trim carpenter, or drywall sub-contractor, or electrician into the process. And because those professionals have worked with my company for more than 20 years, they understand my designs, and I have a pretty good understanding of how they price their work! 

Working for (and with) a Design/Build company makes the entire process seamless for the client.  It makes what I do very transparent for them. It also eliminates any finger pointing from an outside designer to the builder/contractor.  We are all a team from day one and work hard to turn that prospect into a lifelong client. 

A Resurgence for Design/Build? – Is The Economy And Our Government Helping It Happen?

One of the many benefits of the Design/Build approach to construction can be reduced project costs.  Although it is not always easy to help residential remodeling prospects see or accept this benefit should they be new to the Design/Build approach and how it works, many customers who have already experienced true Design/Build can attest to actual cost savings.  Now it would appear that local governments have also realized costs saving by experiencing design/build for government funded projects like road construction, bridge replacement and even construction or renovation of schools. Will the use and success of using Design/Build for public projects help get the word out about the benefits of Design/Build to residential remodeling prospects too?

Here is an example.  In a March 22, 2012 article posted to The-Dispatch.com author David Bodenheimer reported that at a business roundtable meeting between N.C. House Speaker Thom Tillis, the business community and government officials, the speaker was asked by Davidson County Purchasing Director Dwayne Childress to consider adding exceptions to the state's design-build project list that would allow county officials to construct under that model.

To back up his request, Childress cited the example of an Interstate 85 project over the Yadkin River that was awarded for $136 million, although initial estimates assuming the traditional design-bid model had the project ballooning toward $330 million.  Secondary to the cost saving but equally important, Childress said, is the ability to deal with one contractor throughout the entire project. 

"That's a big benefit," Childress said. "Sometimes you get the finger pointed (between the architect and builder). But when you put those two guys on the same side, it's going to clear up a whole lot of issues that we have."

Childress said without a doubt design-build projects would save the county money, in some cases upward of 20 percent.  "You would eliminate a lot of up-front architectural fees and limit change orders," Childress said.

I think this recession has forced both the government and consumers to rethink how they approach construction and renovation projects. With money being tight and strict budget limits the norm; I believe true Design/Build is ready for resurgence. If this is true, those Design/Builders who can help educate prospects on the process and benefits of Design/Build during this resurgence can gain market share before their competition even realizes the opportunity is in front of them.

"Things may come to those who wait, but only those things that are left behind by those who hustle."

- Abraham Lincoln

What say you?

Who Owns the Plans?

Consider the definition of Design/Build.  In a true Design/Build situation, the purpose of the plans is to facilitate construction.  Otherwise, there is no purpose for offering design unless you are offering design as a separate service. If that is the case, then it is not design/build.  In true design/build, because the purpose of creating the plans is so the Design/Builder can build from them, the client is not entitled to the plans unless they commit to construction with the Design/Builder.

The above may upset some.  Perhaps consider if you are a Design/Builder with a Design/Build Business, or you are a Remodeler who sometimes offers Design/Build as a service.

A Way of Doing Business

In most cases, doing the design before you get a commitment from your clients for the build puts you into a bidding situation, something most Design/Builders seek to avoid.  It’s also the reason many business owners give me for getting into true Design/Build to begin with; to get out of the “bidding game”.   These businesses become “Design/Build Businesses”.  They have chosen a niche to concentrate on and to build a brand around.  Deviating from the process weakens or changes the brand.

A Different Sales Style

If you are committed to the marriage of design and build as one process, typically the greatest challenge or change will be a new or different sales approach. Convincing the client to select your company, give up the three bid option, and pay for a design and plans they will not necessarily get to keep unless they go forward with your company, requires a mind set and sales skills most salespeople do not possess.  If you wouldn’t consider or commit to a Design/Build process for renovations at your home, you will probably have a hard time selling the concept to others.  Selling it requires believing in it.

Keep in mind that as a consideration for success within this definition of Design/Build, the process is for those clients who can make decisions and will stick to them.  They can’t change their minds during the process and seek bids using the Design/Builder’s plans.  Clarifying and sticking to this is the responsibility of the salesperson and should be clearly explain during the initial sales call as well as in your Design/Build Agreement.

Don’t get mad at me

The process described above is not for every contractor and it’s not for every client.  I am not suggesting using any other process is wrong; not at all.   It’s still a free country and you can do business any way you want, as long as you operate legally.  I am saying that if you separate the two processes don’t tell consumers that you are a “Design/Build Business”.  Maybe yours is a remodeling business that offers both design/build and the traditional design/bid process. That is a good business model, too.  Explain the difference and give your prospects the option to choose one or the other.

Want more on this topic?

Check out Shawn's article Titled "Who Owns The Plans?"

Check out this previous blog post regarding standardizing the definition of Design/Build

Making A Stand For A Standard Definition For Design/Build

Many businesses in the remodeling and home improvement industries claim to be Design/Builders.  Unfortunately many of these businesses have decided to create their own definitions for what Design/Build is.  This might be because one would have a hard time finding the phrase design/build in a dictionary.  I tried several on line dictionaries and came up empty.  I did however find definitions on the web sites of several industry groups.

So, here are two definitions I found on-line from respected industry groups, and one from me.

Design-Build Institute of America Definition:

“Design-build is a method of project delivery in which one entity - the design-build team - works under a single contract with the project owner to provide design and construction services. One entity, one contract, one unified flow of work from initial concept through completion.  Design-build is also known as design/construct and single-source responsibility.”

American Institute of Architects Definition (found on page 4):

“In the design-build approach to project delivery, the owner contracts with a single entity—the designer builder—for both design and construction. The design-build entity can be led by either an architect or a general contractor and can consist of any number of people.”

Shawn McCadden Definition:

“Design/Build refers to a method of project delivery in which a single entity provides to the client or owner all of the services necessary to both design and construct all or a portion of the project with full responsibility to the owner or clients for both the design and the construction.”

Taking a Stand

So if the construction industry has defined Design/Build, and the definitions are mostly consistent, why then do businesses that operate in contrast to those definitions call themselves Design/Builders?  More importantly why does the industry, specifically the remodeling industry, allow them to do so?

I think the entire industry needs to agree on a definition of what design/build is and what it is not, and then strongly defend that definition.  Contractors and all home owners would benefit greatly if there was just one definition to go by.  Here are a few reasons I offer to back up my opinion:

• Consumers would clearly know what to expect of their contractor if claiming to be a Design/Builder and how the process should work. 
• Consumers and prospective employees would be able to tell if a business was making false claims very quickly.
• Businesses seeking to become Design/Builders would know what they would need to change or do differently before adding Design/Build to their company name.
• Various educational institutions would all be teaching and supporting the same concept.
• Design professionals and contractors could all be on the same page regarding how the process should work before partnering together.
• Design/Builders and industry associations could point out those who are diluting the definition.
• Homeowners would stop expecting the ability to bid out plans created in a design/build process.

"If we do not, at some point one will be imposed on the industry by others who have no clue about our industry. It would be better to get in front of the train and set the agenda instead of dealing with yet another misunderstood situation.....any more lead issues anyone?"

Robert Wright (With permission from LinkedIn discussion on this topic)

(No offense intended - I disagree with your definition of Design/Build if it allows bidding on your plans.  Doing so isn’t wrong; it’s just not Design/Build if you are separating the design from the build)

I stand strong that there should be just one definition of what Design/Build is for our industry, and therefore, what it is not.  Our industry needs clarity and those we bring into the industry as the future workforce or as future business owners need that clarity as well.  Allowing every contractor the ability to define design/build does not make sense to me.

What say you?