Changing Design/Build Midstream?
About 6 weeks ago we contracted with a design/build firm to renovate one floor of a duplex in Red Hook on which we’re about to close. We thought the one-stop shopping of a D/B firm would avoid some of the problems we had in our last apartment reno, where the architect kept blaming the contractor…
About 6 weeks ago we contracted with a design/build firm to renovate one floor of a duplex in Red Hook on which we’re about to close. We thought the one-stop shopping of a D/B firm would avoid some of the problems we had in our last apartment reno, where the architect kept blaming the contractor for delays and overruns and vice-versa. But now we are near the end of the ‘design’ phase and suddenly the reno is projected to go almost 50% over than the original estimate and all kinds of new projected costs keep popping up — even after we’ve dramatically scaled back the work. So we are feeling rather pissed off, not to mention trapped since working with a single firm means no competitive bidding for contractors. Before we pull the trigger we are now thinking about taking the designs this firm has done and shopping them elsewhere. Are we crazy to consider this/has anyone else done it? Mindful that time is money (we are about to close and bc we have 2 kids can’t live there while the work is going on, so we will be paying rent elsewhere for 4-5 months), will we potentially save enough after shopping the job elsewhere to make it worth it? Or is our rage at the firm’s misrepresentations as to cost (which we now suspect was deliberate lowballing to get our business) cutting off our nose to spite our face given the hassles and likely similar bottom line we’ll face if we fire this firm and start (mostly) over? Any advice from others who’ve worked w D/B firms in similar situations would be much appreciated. Thanks.
Architect here. This doesn’t sound good. I’d heed the advice of the previous posters and fire them immediately and move to a more qualified firm (whether it be another design/build or an architect/contractor combo). You should fire them AFTER you interview other firms and find a firm qualified to take over the job. And make sure you have solid references for all the firms. If you’re still completing the design phase and you’re already 50% over budget then you’re going to end up quadrupling the budget by the time construction is complete. It sounds like they’re taking you for a ride.
What does your contract with them say about early termination? Did you include in the contract a reference to your budget and schedule? What are their excuses for the increase in costs?
I assume the contract itemized their fees according to phase…in which case you should only be required to pay them for ‘design services’ to this point. Another firm taking over this early in the game is actually not difficult. You just don’t want to go into CD’s (because the new firm legally needs to develop their own construction documents), DOB filing (because you don’t want to pay an extra fee for having another firm supersede this one), and especially construction and have to switch teams.
I’m curious what the project scope is and what their original estimate was (for construction only…not their design fees)…we can tell you if they seemed to be deliberately low-balling you to get the job or if their current pricing is at odds with industry standards.
Good luck. I hope you get this sorted out soon.
As another architect doing the design-build thing, I can say that there are definite possibilities to save doing it this way, but there is always the ability for an unscrupulous DB team to use the setup to their advantage, and it sounds like that may be the case here.
When we do a construction budget, we make sure it is completely inclusive, and there are no change orders unless the client originates the change or there are circumstances impossible to predict.
We also make sure the client knows he/she always has the opportunity to bid the same job out to other contractors in order to maintain the advantages of competitive bidding. If another contractor is lower and qualified to do the work, I’m happy to work with him/her. This keeps us honest and competitive.
I would suggest to your DB team that they give you the opportunity to do the same and that they either lower their price to match the lowest qualified bid (qualified being important because there are a lot of low-ballers that just hit you up later with change orders and end up costing more) or let you work with that contractor in a standard owner-contractor-architect relationship.
If your DB cannot do that, then walk away now. You may lose a little in costs but you’ll gain a lot more in peace of mind and probably have a much better experience and results to go with it. In my experience, the relationship between you and your team is almost as important as the results.
Remember, this should be fun.
Unless you’ve paid for the rights to their design, I’m pretty sure the design & drawings are considered their intellectual property, and you are not allowed to shop them to another contractor. You would have to start fresh with another firm.
I’d be concerned about whether the DB guys drawings/specs are complete enough/documented enough to just hand off to another contractor…if I was building something myself, I would not have the same level of detail in my drawings as I would if a separate contractor was building it.
That said, get rid of the DB guys. If they’re a nightmare now, they’ll be worse during construction.
I have change design in midstream before.
It was a rather large project, four story with apartments.
It made me happier as I did what I wanted. Its not really the cost. Many contractors use lesser quality materials, so any project, unless the contractor is reputable, you really have to watch over your self.
Problem with major changes is the plans also have to be change. That will cost you. The most important thing is to get the results you want.
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It is best to isolate your issues with this particular firm. A true design/builder both designs and builds. If everything is being subcontracted it sounds like this firm doesn’t have a hands on background, which probably means their design and coordination will suffer. Competitive bidding also doesn’t ensure the price will go down. I prefer to work with the same MEPs because they always answer the phone and get the work done fast.
It is not uncommon even in large scale government jobs for an underperforming contractor to get replaced. If you have not signed you may be best off looking elsewhere.
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If they are acting as a “construction manager” on the contracting end of things then you should be privy to all subcontractor bids and should be able to see multiple bids on each trade, thus creating an “open book” trusting relationship. The idea of design-build is that while the designing is going on, there is a direct and immediate feedback on costs and constructibility providing you with more accurate numbers and avoiding the typical over-bid scenario that you are talking about? If you really feel like they are cheating you and colluding with their sub-contractors to rip you off then you should change firms because this feeling is not likely to change.
They have a ‘construction manager’ in-house (FT employee of the company) who basically serves as the equivalent of a GC, and then they subcontract out all the actual work. In theory both the D/B firm and the client save money because that process is made even more efficient by having the architect in-house, so there is no finger pointing bw the design and contractor ends of the job as to who is responsible for what, and the ‘team’ will work together to revise your plans as the estimates about cost etc come in. But so far we have not seen that benefit, to put it mildly.
They have a ‘construction manager’ in-house (FT employee of the company) who basically serves as the equivalent of a GC, and then they subcontract out all the actual work. In theory both the D/B firm and the client save money because that process is made even more efficient by having the architect in-house, so there is no finger pointing bw the design and contractor ends of the job as to who is responsible for what, and the ‘team’ will work together to revise your plans as the estimates about cost etc come in. But so far we have not seen that benefit, to put it mildly.