JCT Design and Build Contract
The JCT Design and Build Contract is one of the most commonly used construction contracts in the UK. It’s part of the wider JCT (Joint Contracts Tribunal) suite, which includes contracts for almost any size and type of job.
But what’s different about it, and should you use it?
What is the JCT Design and Build Contract?
The JCT Design and Build Contract combines the construction and design elements of a project into a single contract, to be handled by one contractor. Other contracts in the JCT (Joint Contracts Tribunal) suite (such as the Standard Building Contract and the Minor Works Contract) keep design and construction separate.
This is important because it affects how risk is handled on the project. It also creates some unique benefits and drawbacks. Design and Build contracts are popular in large-scale construction projects, where their benefits are amplified.
JCT Design and Build received a major update in 2024, which introduced changes including electronic notification protocols, gender-neutral language and full compliance with the Building Safety Act 2022. This means it’s vital to be up to date with the current version.
Both NEC and FIDIC offer their own versions of design and build contracts, which operate in slightly different ways. So it’s worth exploring all options if you’re not sure which is best for your project. And, of course, if you need help managing your contracts, we’re here to support you.
What makes the Design and Build Contract unique?
The main difference between the Design and Build Contract and other JCT contracts is that the design and construction elements are combined. In more traditional contracts, the employer uses an architect or designer to create plans or drawings before they engage with a contractor.
With a Design and Build Contract, a single contractor takes on both responsibilities. The employer creates an Employer’s Requirements document, which lays out in detail what they want from the project. Clarity and detail here are vital to the success of the project.
The contractor then produces another document, called the Contractor’s Proposal. This outlines how they will achieve the employer’s goal. Again, clarity and detail are vital. It’s also critical that the employer reads the proposal in detail, and raises any questions early in the process.
Combining the design and build elements of the project affects how it works in several ways.
The contractor takes more responsibility
With a traditional project, the employer is responsible for the design, whether it’s produced in-house or contracted out. This means that if any errors are found during the construction process, the employer is liable.
With a Design and Build contract, it’s the contractor’s responsibility to make sure the whole project – including the design – meets what is set out in the Employer’s Requirements document. So, if any design issues arise during the construction phase, the contractor must deal with them.
For the employer, this means much greater cost certainty for the project, and significantly lower risk. It also means that the Employer’s Requirements and the Contractor’s Proposal must be clear, detailed and unambiguous to avoid disputes.
Communication and management is simpler
Using a more traditional contract, the employer has to manage relationships with several other parties throughout the projects. At a minimum, there will be a designer and a building contractor, but there could be any number of additional subcontractors, consultants and other parties too.
With a Design and Build contract, the employer only deals with the contractor.
This simplifies the chain of communication significantly, which is a benefit in itself. The time and effort saved should not be underestimated. It reduces the risk of miscommunication substantially, too. And when simple miscommunications early in the project can lead to major problems further down the line, that’s a big plus point.
Project documentation
If you’ve worked with more traditional contract types, you’ll be well aware of the raft of documentation employers are responsible for. A design brief for the designer or architect and construction drawings for the contractor are just the start.
With a Design and Build contract, everything is contained in a single document called the Employer’s Requirements. This needs to be extremely clear, detailed and unambiguous, but it brings all your requirements into a single document.
The contractor then turns your requirements into an equally in-depth Contractor’s Proposal.
The importance of these documents cannot be understated. But, if drafted correctly, working this way can streamline the project significantly.
It’s an ideal structure for employers who are starting a project from the beginning. It’s less appropriate for introducing part-way through a project.
Cost certainty for employers
With a traditional contract, the final price to the employer can fluctuate. For example, there could be design issues that need to be addressed in the construction phase, or unforeseen problems could arise.
This simply doesn’t happen with a Design and Build contract.
The total cost is agreed upfront as a lump sum payment. This means that if any issues occur during any phase of the project, the contractor is responsible for sorting them. There’s no added cost to the employer.
Contractors tend to factor this into their costings for Design and Build contract projects. This means that the price can initially be higher than with a traditional contract. But, when considering this, it’s important to remember there is no movement in that figure. What you pay is what you pay.
More opportunity for design flexibility and innovation
Traditionally, the employer retains tight control over the design process. This can be a benefit, of course, but it can also be a problem, especially with larger, complex projects. It limits the contractor’s ability to innovate and be reactive in the project’s construction phase.
In a Design and Build project, the contractor is in control throughout the process. They must meet the requirements set out in the Employer’s Requirements document, but they have scope to work with any unforeseen issues during construction, rather than being limited by a set of drawings.
This means the project can be completed faster and more efficiently, as the contractor can adjust details on the fly during construction.
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Downsides of the Design and Build Contract
Of course, a JCT Design and Build contract isn’t suitable for every project, or for every employer. Some of the advantages can be downsides if the contract is not right for the project, and there are a few key negatives it’s important to bear in mind.
Less control over design
Allowing the contractor more control and flexibility can significantly streamline the project, and help increase efficiency. But, it does mean that the employer must relinquish some control over the project. If you need to retain tight control over every stage of the project, Design and Build might not be the right contract for you.
Contractor trust issues
Employers are sometimes concerned that contractors could use the flexibility of a Design and Build contract to cut corners and reduce costs. This concern can be mitigated by using high-quality contractors. It also highlights the importance of a well-written, unambiguous Employer’s Requirements document that details the project scope.
Disputes over project documents
Putting the whole project into a pair of documents has clear advantages, but it’s not without risks. If the Employer’s Requirements are not clearly defined, or leave too much room for interpretation, there can be disputes over whether the Contractor’s Proposal or the final build fulfill the brief.
When to use a JCT Design and Build Contract
So, there are some clear benefits to using a JCT Design and Build Contract, as long as it’s deployed well on the right project. It’s important to understand the key points mentioned above, so you can confidently decide whether it’s the right contract for your project. There are a few criteria that make a project appropriate for a Design and Build contract.
Cost certainty
Providing cost certainty is a significant advantage. The lump sum payment structure gives employers a fixed price from the start, so they can better plan their finances.
Single point of contact
If the employer prefers a single point of contact, and a simplified communication process, a Design and Build contract provides that.
Minimised risk
Although the initial price can be higher, it’s a set price. So, if the employer is willing to trade a higher initial investment against a significant risk reduction, Design and Build makes sense.
Full project
If the project is in the very early stages, so the contractor can be involved from the beginning and take responsibility for design development, a Design and Build contract is a good option.
Conclusion
The JCT Design and Build Contract is a vital component of the JCT contract suite. It offers a series of unique benefits and pitfalls, but for the right project – and the right employer and contractor – it can be the ideal choice.
How can Sypro help?
If you need support managing a Design and Build contract, drop us an email or give us a call on 01482 765601. Our software is designed to streamline the management of JCT contracts, helping you to stay protected, reduce admin time and ensure compliance.
Why use Sypro ?
Sypro has been helping some of the biggest construction, energy and public sector organisations around the globe keep their projects on track and their NEC contract management compliant for over 15 years.
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