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The AIA Project Delivery Knowledge Community (PD) promotes the architect’s leadership role in all project delivery methods by assembling and distributing knowledge and best practices for a variety of project delivery methods, e.g. design-build (DB), integrated project deliveries (IPD), and public-private partnerships (P3).

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Design-Build Delivery for Custom Home

  • 1.  Design-Build Delivery for Custom Home

    Posted 01-30-2019 16:57
    What are the recommended deliverables for a design-build custom home project where the architect is also the general contractor. I am specifically interested in the construction documents and if specifications would be required. This is for a home that has approximately 3,750 heated and cooled sq ft. I don't want to charge the client for documents that are not necessary but want to ensure that I meet the criteria for standard of care. Thank you in advance for taking the time to comment.

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    SSdB AIA
    Architect & CGC
    Roswell GA
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  • 2.  RE: Design-Build Delivery for Custom Home

    Posted 02-01-2019 13:39
    AIA recently published a design-build agreement for one or two family residential projects, A145-2015.  Suggest you take a look there what is typical deliverables. There also are other similar agreements .  It's available in your AIA documents subscription or as a free, non-editable view on their Documents Website, https://www.aiacontracts.org/find

    Thanks,

    Arlen

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    Arlen M. Solochek FAIA
    Maricopa Community Colleges
    Associate Vice Chancellor for Capital Planning & Special Projects
    2411 West 14th Street, Tempe AZ 85281
    (480) 731-8232 |
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  • 3.  RE: Design-Build Delivery for Custom Home

    Posted 02-01-2019 13:39
    Hi Sabre,

    This is a very interesting concern. I am also both, and a great believer in design-build delivery for smaller high end custom projects.

    Since I started my career as an Architect, eventually found myself in construction, finally came full circle once I obtained my architect's license in addition to my contractor's; and after witnessing first hand a failed project where one entity was everything, my main piece of advice is: don't.

    The way I approach our design-build projects is contractor-lead; Although we oversee the project, we hire an outside part to produce drawings.

    This would also apply if the project were architect-lead. He/she should not be the GC, but he can be the construction manager/owner's rep.

    Our mutual situation is not common; in some instances the Architect is an employee of the GC, which sets an inherent inability to practice freely. In other words, if the boss directs the architect employee to certify something to which he disagrees, then his job could be at peril.

    In addition, the liability for the entire project cannot be dissipated or assigned. You would be responsible for everything.

    Regarding your question, we hire a basic set of drawings, then rely on submittals from subs, and also complete interior elevations, and architectural interiors in-house for internal use. But if the project is refined enough, there will be an interior designer involved.

    What the Owner cares about initially is the

    Construction Budget. The cost of the drawing should be included in said budget. It should contemplate all necessary drawings, engineering, surveys etc. In my experience it is a small portion of the entire construction cost, the owner doesn't really care.  and their new home is the product you will be delivering, not the plans.

    I hope this helps

    Ivan Contreras, CBC, AIA, LEED AP

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    Ivan Contreras AIA
    Qualifier / Director
    Contreras Muñoz and Co
    Miami FL
    ------------------------------

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  • 4.  RE: Design-Build Delivery for Custom Home

    Posted 02-06-2019 10:27
    Re Ivan's point about liability not being able to be assigned (to somebody else presumably). A San Diego design build architect of residential projects argued this point differently some years ago. His take was that if you're the architect and the contractor and the developer, who's going to sue you? Yourself?  It's all a matter of perspective.   If you conduct your life from the perspective of lawsuit avoidance, it's a pretty narrowly limiting way of living.

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    Eugene Ely AIA Emeritus, LEED AP
    San Jose, CA
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  • 5.  RE: Design-Build Delivery for Custom Home

    Posted 02-15-2019 11:55
    Hi Eugene,
    I'm interested in reading what our colleague's opinion was. I will look it up; you have just provoked my thoughts and compelled me to share my own experience. As humans we adapt, we change and our opinion today may be different tomorrow.

    In a former life, my wife and I built houses for spec. She was a RE broker which helped us find land and sell afterward. We prepared our own plans, we were our own GC's and did it with our own savings. I other words, we owned every link in the RE development process.

    We only answered to our buyers, they were our only client.

    There were obvious savings in operating this way. Many small homebuilders operated under this same model. I am in fact reading below at a colleague doing just that in Fernandina Beach, FL

    In retrospect, the savings did not offset the downside; especially in the financial side.; Although we were able to make money, the truth is maybe these projects would not have been economically feasible if we had to pay real Estate agents, Financing interest, Architects and Contractors for their services. If we were just developers. Deals of this sort seldom do. But operating under these terms is perfectly possible, as long as no outside party is involved.

    Once you offer your services to others, the game changes completely. It is not so match as being afraid of lawsuits; it is More about providing the best services, which means the best possible result, to you client.

    When a client decides to bring a lawsuit, there is likely a cause, a dissatisfaction. Even if no lawsuit is brought in, the dissatisfaction will still be there. I am interested in finding the root and addressing, so the project can be successful.

    This to me is a complex issue, which i have pondered extensively.

    We will continue providing Contractor-led Design-Build Services, and will hire another architect, (if and) when necessary because:

    - Said outside party, as another subcontractor will have the same obligations to the Owner as every other vendor, therefore will need to answer primordially to the Design-Builder, who has the project as a main objective. When the Architect is inserted in the Critical Path and he understands there are activities before and after, and when the budget is the driving force, he / she will perform in this mindset, with a sense of urgency and value engineering consistent with the project's and Owner's interest.
    - An independent Architect has exactly that: independence to make determinations and bring forward the requirements regarding building codes, life safety, etc. Which cannot be argued by the contractor or adversely influenced by being the same entities. The conflict of interest disappears.
    - An Architect practicing solely architecture will have a better capacity and accountability to produce drawings in a timely fashion. If the same office does both, one of the two services may be compromised in time by other commitments.
    - The Architect, as an outside party could be an important source of referrals to a Contractor and viceversa, whereas, an entity that is both will be seen as a competitor and will likely not benefit from referrals.
    - Insurance: Contractors need to be insured for obvious reasons. They are liable for the work they perform and potential damage to others. Architects carry professional liability, for errors and omissions. Underwriting insurance for a person or entity that performs both concurrently is a red flag.


    ------------------------------
    Ivan Contreras AIA
    Qualifier / Director
    Contreras Muñoz and Co
    Miami FL
    ------------------------------

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  • 6.  RE: Design-Build Delivery for Custom Home

    Posted 02-11-2019 13:12
    I have been looking for a design/build contract for single family homes that I can write with home builders.  A little background here....I practice in Des Moines, Iowa.  (Prior this, I had practiced in the Chicago suburbs).  Unlike Chicago, Des Moines is a city where people do not hire architects fro residential projects.  They simply go to builders first.  In addition to a few architects with residential portfolios, there are lumber yards offering "free" design services, a few established (unlicensed) residential design firms (a few who do work on par with most architects) and builders offering in house design services.

    When a client goes to a builder, the builder think's the client is "theirs",  However, they do not have a signed contract and cannot get a signed contract without a set of plans.  As such, the builders will want to expedite the design process as much as possible. In some cases the builder will meet exclusively with the client and exclusively with the architect asking as a mediator under the notion that this is "their" client and they don't want the architect to have direct access to them  and risk to losing him/her to another contractor.  Needless to say it can be frustrating as an architect trying to serve clients with their builder also trying to call the shots.  (Yes, your're thinking....walk away... but there are too many architects chasing too few projects even in a strong economy to simply walk away!) This is worst case.  In the best case the builder refers the client to an architect an a direct relationship between architect and client is consummated.  The architect develops the plans, the builder offers helpful input, the house gets designed and built.  In a perfect world this would work, but it doesn't as some people use the builder and then decide to shop the project when the plans are completed.  (then the builder doesn't trust architects any more!)

    So, I am looking at developing an agreement where a sign a (design/build?) with the builder and architect at the inception.  This would allow the architect to work directly with the client and the builder to have input knowing that they also have a signed agreement and are already hired for the job.  Has anyone developed such an agreement?  Or such a method of working along side with a builder through the design process?

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    Edward Shannon AIA
    Edward J. Shannon, Architect
    Des Moines IA
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  • 7.  RE: Design-Build Delivery for Custom Home

    Posted 02-12-2019 12:12
    AIA's B105 is an owner-architect agreement intended for small projects and residential.  Consider using that for the initial agreement between you and the client.  (https://www.aiacontracts.org/contract-documents/74571-standard-short-form-of-agreement-between-owner-and-architect) Knowing it will be a design-build project, the scope and work product can be customized to produce just what the would be required to provide to the contractor. At that point, a standard residential design-build contract may be appropriate or using a small projects Owner-Contractor agreement such as AIA's A105 or even A107. 

    Thanks,

    Arlen

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    Arlen M. Solochek FAIA
    Maricopa Community Colleges
    Associate Vice Chancellor for Capital Planning & Special Projects
    2411 West 14th Street, Tempe AZ 85281
    (480) 731-8232 |
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     "Everyone has a plan until they get punched in the mouth."- Mike Tyson







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  • 8.  RE: Design-Build Delivery for Custom Home

    Posted 02-13-2019 11:33


    Arlen,
    I really appreciate all of your input. You have been tremendously helpfull!

    Cheers,

    Simone du Boise, aia, cgc, csi, icc,leed ap bd+c, ncarb
    Architect
    ssdb@cadmusconstruction.com

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  • 9.  RE: Design-Build Delivery for Custom Home

    Posted 02-13-2019 11:33
    Edward,

    It sounds like the goal is to retain the Client (end user) and the Builder (contractor) to work together under an agreement so that ....
    1. The Client does not walk away with either the Builder or take the drawings to another builder.
    2. The Builder does not walk away with the Client after designs are drawn up.

    Is that correct?
    This sounds a little bit like the "Architect as Developer" where the Architect holds the master agreement.
    https://www.di.net/articles/the-architect-as-developer-2/

    If you are feeling the squeeze from competition in the area, why not leverage your skills in design and negotiations to be the Design-Builder for the Client?  It's a different set-up from Design-Bid-Build, but it also sounds like it's more on the residential scale and has more opportunity to earn as both the designer and the Contractor.  Contrary to what is suggested above, this model trends towards the Owner-Design-Builder Agreement where you take on the role as Design-Builder. (https://www.aiacontracts.org/contract-documents/20736-owner-design-builder-agreement)  and the "family" of design-build agreements here (https://www.aiacontracts.org/contract-doc-pages/27146-design-build-family).  While I put faith in the AIA, the EJCDC documents can be another resource to write a Design-Build agreement.

    ------------------------------
    Eric Letbetter AIA
    Associate Principal
    Niles Bolton Associates
    Atlanta GA
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  • 10.  RE: Design-Build Delivery for Custom Home

    Posted 02-13-2019 11:34
    Hi Edward.  We developed a 'letter of intent' quite a few years ago to help address this and similar situations. It outlines a general agreement between owner and contractor to work together toward a set budget and outline project scope, in good faith.  i'm sure there are others who have developed something similar.  I vetted it first with a number of our 'go to' builders to make sure it was fair and equitable.  In recent years, we have not used it very often.

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    Michael Malinowski FAIA
    Sacramento CA
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  • 11.  RE: Design-Build Delivery for Custom Home

    Posted 02-13-2019 11:34

    To Edward and All Architects:


    Over the last several years, I decided to modify the traditional approach to the single family market in my area, and this involved becoming the planner, developer, and architect. 


    I found properties and lots which were desirable and bought lots or land parcels. After developing site planning in accordance with planning and zoning regulations, during the purchase due diligence period, I secured City approvals, then closed on the purchase. 


    I offered the lots for sale to individuals and/or builders at market value, and paid few fees to realtors, but  paid a buyer's agent fee, if a buyer was brought to us by a realtor. If brought by a builder, I will pay the builder a fee if they do not end up with a build contract. My property sales contract has an addendum which identifies me as the architect with design control. This can be a deed restriction added to the property or simply a side agreement signed at closing. 


    I developed schematic designs to market the property and provided these "idea sketches" with my marketing materials. Also, after receipt of a deposit from a buyer, I will develop schematics to their requirements, and develop the design further after closing. My sales contract does not require buyers to use me as the architect for development of a final design nor construction drawings, but does require the buyer to submit their designs and plans to me for approval, prior to proceeding with city permits for construction. Some builders have their own team of engineers and house plan drafters, and they can use their own resources, with my oversight, as I control the design via my review. 


    I formed a separate LLC  for this practice.  My local banker provided loans for land purchases and construction loans. I have also established working relationships with realtors who have lots listed for sale, builders, and all city planning and development officials. My presentations to city hearings for variances, zoning, etc. provide me with free publicity. My signs on lots for sale, don't just say "For Sale", they offer a developed homesite available with schematic design options and freedom from being controlled by a realtor or builder. I don't ask for work from realtors and builders, but they have freely brought potential clients to me.  


    My first year with this business plan produced results which far exceeded my expectations. I purchased my first property with a down payment of 25% and loan of 75%. I subdivided a large lot into three smaller lots and sold two of these lots with schematic designs. The first two lot sales paid for the property with all costs and yielded a 20% profit over all costs. The sale of the third lot was 100% profit, and fees from all architectural work added to the bottom line. 


    Builders brought two larger residential projects to us which had challenging sites and regulatory complexity. Of course, we had an advantage over plan services and unlicensed designers for these assignments, due to our experience and professional approach.  Also, a builder asked us to propose construction administration services to their client for renovations of a large condominium development, and from that assignment, we obtained two additional contracts for multi-unit condominiums.      


    This method has produced the best results ever in this area. We are currently planning our next project, a larger parcel which has been overlooked by developers due to its challenging topography. We  expect this property to yield 25 + well-located lots overlooking an area which we want to designate as a natural preserve.   


    There is no need for an architect to wait for projects to be brought from builders. An architect can start with a single lot purchase, with a nominal deposit (completely refundable), as you can add a feasibility phase period in the purchase contract, to close in 30 or 45 days or more. In that time period, a purchase contract can allow you time to market a sale of the property, obtain zoning or city approvals, etc. 


    In one of my first residential purchases, I bought a property from my client, who decided not to develop it, due to family financial considerations. The purchase contract included a nominal deposit, with a feasibility period to do planning and obtain a zoning change.  We closed on the purchase months after the contract offer with zoning approved. This produced an immediate sale of the property to another developer at a profit of twice our purchase price and an architectural project opportunity for an office development. The profit on this sale exceeded the entire income made from the prior year significantly.


    I have previously built houses for resale, as the architect and builder. This yielded even greater profits per home, but came with added risks. Other architects have also taken this path. However, I do not recommend this additional service, as it often takes longer to build, produce a sale and requires a larger net worth to obtain the construction loan. Also, there is the potential holding period and associated costs. 


    At this time, I enjoy more design and financial freedom in my practice than ever before. The added work, profit and increase to my net worth was significant in just the first year. We are now in the fourth year with this business plan.  


    Should you have any questions about this approach, please contact me directly, and I will gladly provide additional information.


    Sincerely, 


    Joel Reitzer, Architect

    R4 Development

    Fernandina Beach, Florida  

    joelreitzer@r4development.com

    904-607-3636    







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  • 12.  RE: Design-Build Delivery for Custom Home

    Posted 02-13-2019 11:35
    Edward -
    Maybe you can work with "your" builder to create an agreement which he can use with the future homeowners that says an architect (you) will be involved with the design and documents.  [Does the builder have a standard agreement that they use now, which could be expanded? Or to which a description of your services could be added as an exhibit?]  If you can make yourself the builder's (or builders') helper to create a form of agreement that makes business sense for them, and which attracts work because it is fair to owners, you become more a team member.

    In my area, builders often get an initial payment to cover expenses as they start up a house project.  For the ones I work with, some of that goes to me for my services.  Some goes to plan review and permit costs.  Some probably goes to keep the contractor's business going.  I think you could work with the builder to establish a budget for your services, and that could be split into design, documents, and CA phases.

    If the builder is concerned that the owner might take your drawings and start shopping elsewhere - that's a topic for the owner-builder agreement.  That agreement could say that you're providing services to the builder, not directly to the owner (and you might want to work some text in there to improve your liability position).  It could also provide that if the owner-builder deal falls apart, upon payment by the owner for your services (plus perhaps a 10% or so "facilitation fee" to the builder), owner can seek to work with you - at which point you can decide if you want to take the job on, etc.

    I suggest taking a look at all of the design-build standard agreements you can, including any that are for design-builder / architect, to see what you can sift out.  Be sure to reserve the rights to your "instruments of service" - or get compensation for their future use.  AIA, DBIA, Consensus Docs, etc. all have DB agreements.

    And talk with your legal counsel.

    ------------------------------
    Joel Niemi AIA
    Joel Niemi Architect
    Snohomish, WA
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  • 13.  RE: Design-Build Delivery for Custom Home

    Posted 02-15-2019 11:55
    Edward, you have expressed several very important concerns. At some point in the past, i looked up the statutes for several states; it seems as though Residential Design (one and two-family residences) is mostly an unregulated profession, in that there is no Architect requirement. The profession, as defined, focuses on the documentation of more important structures.
    Some municipalities do have this requirement. You should look-up those that do and try to obtain commissions therein.
    As an Architect you may provide Architect-led design-build Services using an AIA contract. You would then seek and award bids and represent the Owner by providing contract administration. The contractor is brought in earlier in the process.
    In a contractor-led Design-build delivery method, The Contractor brings in an Architect who is a part of the contract and has a corresponding fee. This can be done at the inception. AIA documents were recently revised and now include IPD versions and I have been told they are all much improved.
    It seems to me you could, instead of competing with local builders or trying to get a piece of their action, distinguish yourself by offering Architect-led Design-build. Pursue better, contracts for owners with higher standards. Seek and vet local builders, then bid by invitation only.
    if the prospects in your area cannot see the value of bringing in an Architect for their residential project, and local builders somehow own the market, I cannot imagine these homes being truly custom. Find your niche
    Be well

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    Ivan Contreras AIA
    Qualifier / Director
    Contreras Muñoz and Co
    Miami FL
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