Design and construct puts the design and the building under one builder and one contract. The traditional route splits them: the client pays a designer for drawings first, then asks builders to price the finished set. Which one suits you depends on how settled the design is and who you want carrying the risk of cost.
This article is about houses and renovations, not commercial projects, where the same words can mean something different. It is general information only and not legal advice.
The two routes in plain words
Traditional. The client engages an architect or building designer. The designer produces drawings and specifications. The client then gets builders to price the same documents and signs a building contract with one of them. Design and building are separate jobs with separate people.
Design and construct. The client deals with one builder who handles the design stage and then builds it. Sometimes the builder has designers in house. Sometimes the builder engages an outside designer and manages them. Either way the client has one point of contact and usually two agreements: one for the design and costing stage, and one for the build.
Who is responsible for what
| Traditional | Design and construct | |
|---|---|---|
| Who designs | Designer engaged by the client | Builder, or a designer the builder manages |
| Who prices the drawings | Several builders, from the same set | The builder doing the design |
| Who a design error comes back to | The designer, and sometimes the builder | Mostly the builder |
| Client’s main contact | Designer first, builder later | One builder throughout |
| Comparing prices | Easy, like for like | Harder, designs differ |
The Victorian regulator treats preparing drawings and specifications as domestic building work, unless it is done by a registered architect, engineer or building designer (Consumer Affairs Victoria on building contracts). So a builder running design work needs to check what their state allows them to do themselves.
When the price is fixed
In the traditional route the price is usually fixed after the drawings are complete, because every builder is pricing finished documents. That is its strength. The client knows what they are buying when they sign.
In design and construct the price comes in stages. The client agrees to the design stage first. A firmer price follows once the design, the site investigation and the selections are far enough along. Until then any number is an estimate.
That is not a defect. It is the point. Giving a fixed price on a design that is still moving only pushes the risk into allowances. Victoria’s regulator tells builders to specify as much as possible in the contract for a fixed total price, to avoid disputes (Consumer Affairs Victoria checklist). Our guide to provisional sums and prime cost items goes into that. For the contract types themselves, see cost plus or fixed price.
Where drawings and ownership sit
Ask this before anything is signed: whose drawings are they, and can the client take them to another builder?
In the traditional route the client engaged the designer, so the drawings are normally theirs to use as they like, subject to what the designer’s agreement says. In design and construct, the answer depends on the wording of your agreement. Some builders keep the drawings unless the client builds with them. Others hand them over once the design fee is paid.
Neither is wrong. What causes trouble is silence. Write it down in the agreement, in one sentence, and say it out loud in the first meeting. Victoria’s definitions page says drawings should be signed by the builder and the consumer and be part of the domestic building contract (Consumer Affairs Victoria definitions). Whatever the route, the final drawings belong inside the contract, not floating beside it.
Which jobs suit which route
- Traditional suits clients who want a particular architect, who want to compare several builders on the same documents, or whose design is largely set before they approach a builder.
- Design and construct suits clients who want one point of contact, who want buildability and cost checked while the design is still moving, and who are happy to choose a builder first and refine the design with them.
- Either can suit a renovation or extension, but renovations are where hidden conditions most often upset a fixed price, so a staged route with site investigation early has a good case.
Be straight with the client about the trade-off. Choosing one builder early means giving up easy price comparison. The client is trading that for early cost advice and fewer hand-offs.
The early paid stage in design and construct
The design stage is real work: drawings, a site survey, soil testing, engineering input and costing. In Queensland the regulator describes a preliminary agreement as one made before the building contract so the contractor can be paid upfront for early work such as having designs drawn up, preparing drawings and specifications, and soil tests and contour surveys (QBCC on agreement types). The same page warns that some of these agreements include fees or penalties if the client does not proceed, that these may be illegal, and that clients should get legal advice before signing.
So keep the stage clean. List what the client receives, put a price on it, say what happens to the fee if they build with you, and have a solicitor look at the wording. Rules on early paid work differ by state; check with your regulator or a solicitor for your situation. Setting the fee and the wording is covered in charging for preliminary work, and our pre-construction page covers the paid early stage.
Common questions
Is design and construct cheaper than traditional?
Not by rule. It can save time and rework because cost is checked while the design is moving, but the total depends on the design and the builder. Compare scope and allowances as well as the headline number.
Can the client still use another builder after the design stage?
That depends on the agreement. Settle who owns and can use the drawings before the design stage starts, and write it down.
Is a design and construct contract a fixed price contract?
Often the build contract that follows is fixed price once the design is settled. The design stage before it is usually a separate agreement. Read what each one says.
Do the rules differ by state?
Yes. Licensing, written contract thresholds and what a builder may design differ across Australian states and New Zealand. Check your regulator’s pages for your situation.