Design Build and Other Types of Construction Contracts

The construction industry is a complex and ever-evolving field that requires different business models and contracts to ensure successful project delivery. In this article, we will explore the most common types of construction contracts, including design-build contracts, construction management contracts, and cost-plus contracts.

Design-Build Contracts

Design-build contracts are popular in the construction industry because they offer a streamlined approach that enables the owner to work with a single entity. In a design-build contract, the owner enters into an agreement with a design-builder to manage both the design and construction of the project.

Design-build contracts simplify the construction process by consolidating responsibilities, improving communication, and reducing conflicts between the design and construction teams. This combined approach is particularly useful when time is critical or when the owner wants to have more control over the project outcome.

Construction Management Contracts

Construction management contracts are used when the owner hires a construction manager (CM) to oversee the project`s construction process. Under this contract, the CM acts as the owner`s agent and works with various design and construction firms to ensure that the project is delivered on time, within budget, and to the owner`s specifications.

Construction management contracts provide greater flexibility than other types of contracts because they allow the owner to hire different firms for different components of the project. This means that if the owner has an existing relationship with a particular architect or contractor, they can still work with them under the construction management contract.

Cost-Plus Contracts

Cost-plus contracts are used when the owner wants to have more control over the project and is willing to pay the contractor for their actual costs plus a fee for services. Under this contract, the owner agrees to pay for all the costs associated with the project, including materials, labor, and overhead, as well as an agreed-upon fee for the contractor`s services.

Cost-plus contracts provide more transparency in the construction process, allowing the owner to see the actual costs of the project and make changes as needed. This type of contract is particularly useful for complex projects with changing requirements or when the owner wants to have greater control over the project`s budget.


In conclusion, the construction industry offers various types of contracts to suit the owner`s needs and project requirements. Design-build, construction management, and cost-plus contracts offer unique benefits that make them ideal for different construction projects. By understanding each type of contract, owners can choose the best one for their project and ensure its successful completion.