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Design/Build

  • 1.  Design/Build

    Posted 06-29-2018 10:33
    ​​Hello,  We are a general contractor that performs commercial and industrial work.  I curious what margins other contractors are getting on their design/build type work?  Also,  what is the scope (level of effort) of your involvement in the business development of obtaining this type work?

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    Michael Leo
    Jarvis, Downing & Emch
    Wheeling WV
    (304) 232-5000
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  • 2.  RE: Design/Build

    Posted 06-30-2018 13:39
    We are considering D.B. work as well.  You may need to talk to your insurance agent regarding special requirements/coverage needed for this projects.  We have a fantastic agency-Holmes Murphy.  We found them through CFMA and they are phenomenal!   Be prepared to learn a lot. 

    Barbara Laden
    Integrity General Contractors, LLC
    972-597-4490




    Original Message


  • 3.  RE: Design/Build

    Posted 07-11-2018 15:31
    Yes the insurance comment is a good point. We had to add E & O coverage at a cost of several tens of thousands of dollars for the design build work we do for the military.

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    Jack Kiperman
    COO / CFO
    Viking Engineering + Construction
    Portland OR
    (503) 987-0570
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    Original Message


  • 4.  RE: Design/Build

    Posted 07-12-2018 10:39
    Michael,
    We have also become heavily involved with integrated design over the last two years after spending the previous 20 living in the traditional design-bid-build universe.  Our model may be different than what you are contemplating, as i read design-build to either mean you are JV'ing with an architect on a project or possibly directly engaging the 3rd party architect as opposed to the owner doing this.  In our model we actually have the architects on our payroll, and we contract with the owner for the full scope of design and construction.
    Regarding your specific question on margins, i think you can expect higher numbers by virtue of what should be streamlined processes and a more collaborative relationship with the architect.  In other words, your project should flow faster, and delivering the project more quickly should deliver higher profits.  If you have direct control over the design choices being made you can further increase your margins by making more economical and standard product choices for the project, which can help you avoid long lead-time delays.
    Overall, whether in-house or JV with architects, either is a much more effective delivery model than traditional design-bid-build.
    I hope this information is helpful.
    Patrick

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    Patrick Lloyd
    Chief Financial Officer
    Creature, LLC
    Birmingham AL
    (205) 327-6617
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    Original Message


  • 5.  RE: Design/Build

    Posted 07-12-2018 10:58
    ​Good discussion and also curious of the responses.  I recently moved from true GC that did design build in a more JV type structure to a larger firm that does in house design/build work.  I don't feel they are fully utilizing the in house relationship and capitalizing on margins available through the streamlined effect of controlling the project beginning to end.  I'm currently seeing margins less than were previously made at the GC I came from.  I'd like to help my new firm capitalize on that opportunity.

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    Michael Halstead CPA
    Controller
    Epstein
    Chicago IL
    (312) 429-8017
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    Original Message