In the late 1980s, New York–based Peter Gluck and Partners Architects (now Gluck+) landed a high-profile, high-stakes project: designing an addition to a 1955 Connecticut residence by Ludwig Mies van der Rohe. The project was “a great honor and responsibility,” says principal Thomas Gluck.
It was also a lot of work. The firm didn’t want any missteps so they kept a close watch on the contractors. “We were on-site basically full time, without being compensated for it and without having the authority to direct the subcontractors,” Gluck says. This experience led the firm to rethink how it would handle projects going forward.
Understanding the Delivery Method
For the past two decades, GLUCK+ has engaged in architect-led design/build (also called designer-led design/build), working as the single point of contact for the client, managing the project’s design and construction, and subcontracting the construction to a general contractor, who in turn subcontracts to specific trades. Some firms may have an in-house construction arm that acts as the general contractor and construction manager, while others may hire a standalone general contractor to handle the construction.
Evaluating the Benefits
Change orders and cost overruns are uncommon in architect-led design/build projects, at least in Gluck’s experience. Architects are more sensitive to cost, schedule, and material issues during design, and more attuned to addressing quality issues during construction. “For us, the value is that integration,” Gluck says. “The same person who’s designing [the project] is the same person who is conveying it and working with the trades. Our impression is that this is what clients want.”
It’s also what an increasing number of architecture firms want. Tom Vandeveer, AIA, senior vice president for global architecture firm HDR, says the traditional design-bid-build model makes up fewer than half of his firm’s projects. “Today, I’ve never seen more variation in exploring different ways of delivery,” he says.
Vandeveer says that financial case is clear for architect-led design/build delivery, which currently makes up about 10 percent of HDR’s revenues. “There’s definitely a greater opportunity to make more money,” he says. In a conventional design/bid/build model, an architect’s total fee is between 6 and 8 percent of construction costs, which translates to about a 10 percent profit. Contractors make a slightly larger cut, pulling in profits of around 15 percent. In architect-led design/build projects, those profits also go to the architect.
But, Vandeveer says, “the real motivator is more in being able to participate and, to some degree, control the design decisions that might otherwise be subordinated to a contractor,” he says. Gluck agrees: “We can make sure all the subs on the site really focus on [the details]. We believe that it produces a much better piece of architecture.”
Taking the First Step
Firms may hesitate to lead a design/build effort because of liability issues related to construction accidents or failures. But, says Mark Friedlander, a partner who specializes in construction and design law in the Chicago office of Schiff Hardin, the risks are not much greater than what a typical architecture firm may expect to shoulder.
Problems with the construction quality typically would be covered by the general contractor’s general liability policy. “If something is built wrong, the architect accepts full responsibility for it to the owner, but then passes down the liability or the responsibility for fixing it to the general contractor, who probably in turn passes it down to a subcontractor,” Friedlander says. “Virtually all of the risks on a construction project can be handled that way.” However, firms should set up a separate corporate entity to handle construction to insulate the architecture side of the firm if catastrophe does occur and the construction side has to dissolve.
Because the architect and the general contractor are working more closely together, Friedlander says the potential for problems is greatly reduced. “I structure my [clients’] designer-led design/build projects so that the architect and the contractor share savings and losses on a 50/50 ratio—which means that they know they’re financially in bed together.”