What are the advantages of a Design and Construct (D&C) Contract?
The Design and Construct (D&C) principle is the most commonly adopted approach to the construction of medium to large scale development projects across Australia.
But what are the advantages of D&C and what should developers be aware of to ensure the quality expected is actually delivered?
3 Main Advantages:
1. The builder becomes responsible for completing a building’s design and takes the risk of time and cost to meet the principal project’s requirements. In turn, it provides the developer with much greater cost certainty.
2. As the design does not need to be fully documented or coordinated, you are able to commence construction earlier and reduce pre-commencement equity requirement costs as design-related costs can be funded out of the construction facility.
3. Financiers prefer it given the greater certainty and lower risk to the developer which in turn makes projects easier to fund.
Our company has just completed the project management of Victoriana on behalf of JD Property Development Group, which boasts some of the most premium apartments in the Melbourne marketplace.
Utilising a D&C delivery approach and working with quality contracts Hickory Group (Aus), this high-end luxury $400m apartment project has been completed to exceptionally high standards and is a credit to all involved.
No doubt, many have had good and bad experiences relying upon the D&C approach, but I remain steadfast in my belief that this remains the best delivery approach for nearly all developments.
If carefully managed, a D&C approach will lead to exceptional results. However, beware; if you don’t understand the potential pitfalls and how to expertly prepare the principal project’s requirements and or the sensitivities in the drafting of a D&C contract, it is very easy to end up with a building vastly different to that which you may have expected.