The Design-Build Delusion

The design-build delusion.

Design-build firms have billed themselves as the best solution for construction, rightly so, in some cases.  For church building projects though, there are some aspects of the process that are significant hindrances, and can be problematic for the church body.  Here’s why.

The design-build process is geared toward efficiency, not consensus.  If you have been in a leadership role in a church for any amount of time, you know that without unity of purpose and unity of vision, church projects can get badly out of hand and quickly mired in conflict.

Is the design-build method a bad process?

No.  In the right setting design-build is a great solution.  It is an effective way to delegate the details of building a facility so you can carry on with your business.  However, if your goal is to engage people in the process, to build into them a vision of your ministry as a church, and allow them to give input into the process and gain their buy-in; you will need control of the process.  In this respect, the design-build process has some significant drawbacks.

1)       The design-builder drives the project.  In this process, the church has only one contract and only one control point.  All of the preliminary work (site work, civil plans, architecture, etc) is contracted through the design-builder, so the design-builder retains the financial leverage on the project.  The primary source of income for the design-builder is the construction project at the end, so they have incentive to start building as quickly as possible.  This is often done at the expense of the planning that is specific to your ministry and critical to your success.

2)      The design-builder owns all of the intellectual property.  In the beginning, this may seem like a non-issue, but in the design-build process you don’t see what you get for the money you spend until you have already committed to hiring the design-builder.  The process is designed to lock you in before you see final pricing.  In this scenario, the costs are guaranteed to come back high because the design-builder knows that if you decide not to let them build the building, you must start over in the process.  The church does not own the site plans, survey, architectural plans, etc.  Not only is it a waste of time and money to start over, but also wastes goodwill from the church body.

3)      There is no oversight for the church.  In most cases the architect is contracted by the design-builder, in some cases, the architect is a direct employee.  When the architect works for the builder, the architect is no longer in a position to keep the builder accountable – which is a primary function of the architect during the construction process.  Also, because the architect and builder work together, many of the design decisions are made without your input.  You may not find out about them until sometime in the building process, at which point you will be introduced to the term “change-order”  This is why 80% of building projects finish over budget.

4)      A builder cannot take advantage of the tax advantages you have as a church.  So despite your tax-exempt status, since you are not the ‘owner’ of the project, you are still required to pay taxes on the largest purchase you will make.

What’s the alternative?

In the last few years, companies have begun to adopt what the building industry calls IPD. (Integrated project delivery)  Some firms call it team-build. Whatever it is called, this setup addresses the problems that are inherent in the design-build system, while leaving intact the advantages of the design-build over the design-bid approach.

1)      Because the planner, architect, builder, engineers, church, consultants, and anyone else you deem desirable is involved in the design process, everyone’s ideas are incorporated at the beginning.  Value-engineering is done here.

2)      All parties work directly for the church.  The project progresses on the church’s timeline, because the church is writing the checks.  There is no conflicted loyalty, and the church owns all of the resulting designs.

3)      If the church buys the materials directly, the church can save both tax and markup on the materials. This is generally 15-35% depending on your tax rate and your builder’s markup.

The drawback to this process is that it takes longer, and requires more involvement from the church.  Typically, when a pastoral team tries to take this on themselves, the ministry loses momentum.  You will need to hire a firm or an individual to manage the building process and the coordination; this is typically a church planner, consultant, or some type of project navigator.  The money you spend to coordinate that process, though, will be a small amount versus the money that the process saves.  Plus, if it is properly handled you also have a supportive and enthusiastic church body ready to launch a new ministry.