Design-Build Contract

DESIGN-BUILD CONTRACT

TABLE OF CONTENTS

1. Parties and Project
2. Definitions
3. Design-Build Services
4. Contract Documents
5. Contract Price and Payment
6. Schedule
7. Design Phase
8. Construction Phase
9. Change Orders
10. Owner's Responsibilities
11. Design-Builder's Responsibilities
12. Insurance and Bonds
13. Indemnification
14. Warranties
15. Completion and Closeout
16. Default and Termination
17. Dispute Resolution
18. Lien Waivers
19. General Provisions
20. Execution

1. PARTIES AND PROJECT

DESIGN-BUILD CONTRACT (this "Contract") is made as of [Effective Date] by and between:

OWNER:
Name: [Owner Legal Name]
Type: [Individual/Corporation/LLC/etc.]
Address: [Address]
Phone: [Phone]
Email: [Email]

DESIGN-BUILDER:
Name: [Design-Builder Legal Name]
Type: [Corporation/LLC/Partnership]
Address: [Address]
Phone: [Phone]
Email: [Email]
Contractor License: [License Number]
Architect/Engineer License (if applicable): [License Number]

PROJECT:
Name: [Project Name]
Location: [Project Address]
Type: [Residential/Commercial/Industrial]
Description: [Brief Project Description]

2. DEFINITIONS

"Applicable Laws" means all applicable federal, state, and local laws, statutes, regulations, ordinances, codes, rules, and orders.

"Change Order" means a written amendment to this Contract signed by both parties modifying the Contract Price, Schedule, or Scope of Work.

"Completion Date" means the date for Substantial Completion as set forth in the Schedule, as may be adjusted by Change Order.

"Construction Documents" means the final drawings, specifications, and other documents prepared by Design-Builder for construction of the Project.

"Contract Documents" means this Contract, General Conditions (if any), Construction Documents, approved Submittals, Change Orders, and other documents incorporated by reference.

"Contract Price" means the total amount payable to Design-Builder as set forth in Section 5.

"Design Development Documents" means drawings and specifications that establish the design, scope, quality, and character of the Project.

"Design-Builder" means the entity responsible for both design and construction of the Project.

"Design Consultants" means architects, engineers, and other design professionals engaged by Design-Builder.

"Final Completion" means completion of all Work including Punch List items.

"GMP" means Guaranteed Maximum Price.

"Owner's Criteria" means Owner's program requirements, design criteria, budget, and schedule as set forth in Exhibit A.

"Phase" means Design Phase or Construction Phase as the context requires.

"Preliminary Design" means concept-level drawings and documents describing the basic Project scope.

"Professional Services" means architectural, engineering, and other design services.

"Project" means the building, structure, or improvement to be designed and constructed.

"Schedule" means the project schedule as set forth in Section 6.

"Schematic Design" means documents establishing the general scope, scale, and relationships of Project components.

"Subcontractor" means any person or entity contracted with Design-Builder to perform Work.

"Substantial Completion" means the stage when the Project is sufficiently complete for Owner's intended use.

"Work" means all design services, labor, materials, equipment, and construction required to complete the Project.

3. DESIGN-BUILD SERVICES

3.1 Single Source Responsibility

Design-Builder shall provide single-source responsibility for both design and construction of the Project. Design-Builder is solely responsible for:

• All Professional Services (design)
• All construction services
• Coordination between design and construction
• Performance of all Subcontractors and Design Consultants

3.2 Scope of Services

DESIGN SERVICES:

• ☐ Programming and feasibility analysis
• ☐ Site analysis and surveys
• ☐ Schematic Design
• ☐ Design Development
• ☐ Construction Documents
• ☐ Permitting support
• ☐ Construction administration
• ☐ Engineering (structural, MEP, civil)
• ☐ Interior design
• ☐ Landscape architecture
• ☐ [Other design services]

CONSTRUCTION SERVICES:

• ☐ Pre-construction services
• ☐ Value engineering
• ☐ Constructability review
• ☐ Scheduling
• ☐ Procurement
• ☐ General construction
• ☐ All trade work
• ☐ Project management
• ☐ Quality control
• ☐ Commissioning coordination
• ☐ [Other construction services]

3.3 Owner's Criteria

Design-Builder shall design and construct the Project in accordance with Owner's Criteria attached as Exhibit A, which includes:

• Program requirements
• Performance criteria
• Design standards
• Budget parameters
• Schedule requirements
• Sustainability goals (if any)

3.4 Standard of Care

Design Services: Design-Builder shall perform Professional Services with the degree of care and skill ordinarily exercised by design professionals performing similar services in the same locality.

Construction Services: Design-Builder shall perform construction in a good and workmanlike manner in accordance with the Construction Documents and Applicable Laws.

4. CONTRACT DOCUMENTS

4.1 Contract Documents

The Contract Documents consist of:

1. This Design-Build Contract
2. Exhibit A: Owner's Criteria
3. Exhibit B: Design-Builder's Proposal
4. Exhibit C: Schedule of Values
5. Exhibit D: Project Schedule
6. Construction Documents (as developed)
7. Approved Change Orders
8. General Conditions (if attached)

4.2 Order of Precedence

In case of conflict:

1. Change Orders (most recent first)
2. This Contract
3. Construction Documents
4. Owner's Criteria
5. Design-Builder's Proposal

4.3 Interpretation

Design-Builder shall not take advantage of any ambiguity or discrepancy. Questions shall be submitted to Owner for clarification.

5. CONTRACT PRICE AND PAYMENT

5.1 Contract Price

Owner shall pay Design-Builder:

☐ Lump Sum/Stipulated Sum:
$[Amount] for complete Design and Construction Services.

☐ Guaranteed Maximum Price (GMP):

• GMP Amount: $[Amount]
• Design-Builder's Fee: $[Amount] or [___]% of Cost of Work
• Contingency: $[Amount] or [___]% of GMP
• Savings Distribution: [___]% to Owner; [___]% to Design-Builder

☐ Cost Plus Fixed Fee:

• Cost of Work plus Fixed Fee of $[Amount]
• GMP Cap (if any): $[Amount]

☐ Phased Pricing:

• Design Phase (Phases 1-3): $[Amount] (fixed)
• Construction Phase: $[Amount] (GMP established after Design Development)

5.2 Phase Pricing (If Phased)

5.3 Cost of Work (for Cost Plus or GMP)

Cost of Work includes:

• Design Consultant fees
• Labor costs (wages, taxes, benefits)
• Materials and equipment incorporated in Project
• Subcontractor payments
• Equipment rental
• Permits and fees
• Bond premiums
• Site office and temporary facilities
• Testing and inspections

Cost of Work excludes:

• Design-Builder's home office overhead
• Design-Builder's profit (included in fee)
• Costs due to Design-Builder's negligence

5.4 Applications for Payment

• Design-Builder shall submit monthly Applications for Payment
• Applications shall detail work completed, materials stored, and previously paid amounts
• Owner shall pay within [30] days of approved Application

5.5 Retainage

• Owner shall retain [5]% of each payment until Final Completion
• Retainage may be reduced after Substantial Completion

5.6 Late Payments

Late payments accrue interest at [1.5]% per month or the maximum legal rate.

6. SCHEDULE

6.1 Project Schedule

6.2 Detailed Schedule

Design-Builder shall prepare and maintain a detailed Project Schedule showing all activities, durations, and critical path.

6.3 Schedule Updates

Design-Builder shall update the Schedule monthly and promptly notify Owner of any changes affecting milestones.

6.4 Time Extensions

Design-Builder is entitled to time extensions for:

• Owner-caused delays
• Change Orders
• Force Majeure events
• Differing site conditions
• Permit delays not caused by Design-Builder
• Other delays beyond Design-Builder's reasonable control

Design-Builder shall provide written notice within [5] days of delay occurrence.

6.5 Liquidated Damages (Optional)

☐ Applicable: If Substantial Completion is not achieved by the Completion Date (as extended), Design-Builder shall pay $[Amount] per day as liquidated damages, not as penalty. Cap: $[Amount].

☐ Not Applicable.

7. DESIGN PHASE

7.1 Design Services

Design-Builder shall provide Professional Services through licensed architects and engineers. Design-Builder's Design Consultants:

7.2 Design Phases

7.2.1 Schematic Design
Design-Builder shall prepare Schematic Design documents including:

• Site plan
• Floor plans
• Building sections
• Exterior elevations
• Preliminary specifications
• Preliminary cost estimate

7.2.2 Design Development
Upon Owner approval of Schematic Design, Design-Builder shall prepare Design Development documents including:

• Refined drawings and specifications
• Structural, mechanical, electrical concepts
• Interior and exterior finishes
• Updated cost estimate
• GMP proposal (if applicable)

7.2.3 Construction Documents
Upon Owner approval of Design Development, Design-Builder shall prepare Construction Documents including:

• Complete architectural drawings
• Complete engineering drawings
• Detailed specifications
• Permit-ready documents

7.3 Owner Review and Approval

Owner shall review and provide comments/approval within [10] business days of each Phase submission. Owner's approval authorizes Design-Builder to proceed to next Phase.

7.4 Design Changes After Approval

Changes requested by Owner after Phase approval may result in additional fees and schedule adjustments via Change Order.

7.5 Ownership of Documents

Documents prepared by Design-Builder are instruments of service:

• Design-Builder retains copyright
• Owner receives license to use documents for Project
• Owner may not use documents for other projects without Design-Builder's consent

8. CONSTRUCTION PHASE

8.1 General Construction Obligations

Design-Builder shall:

• Construct the Project in accordance with Construction Documents
• Supervise and direct all Work
• Employ competent personnel
• Comply with all Applicable Laws
• Maintain a safe work site
• Coordinate all Subcontractors
• Provide quality control program

8.2 Permits

Design-Builder shall obtain all permits required for construction. Permit costs are included in Contract Price unless otherwise specified.

8.3 Subcontractors

• Design-Builder may use Subcontractors for construction
• Major Subcontractors subject to Owner's approval (not unreasonably withheld)
• Design-Builder responsible for all Subcontractor performance
• Subcontracts shall flow down applicable Contract terms

8.4 Submittals and Substitutions

• Design-Builder shall prepare Shop Drawings and Submittals as needed
• Proposed substitutions require Owner approval
• Design-Builder certifies Submittals comply with Construction Documents

8.5 Site Management

Design-Builder shall:

• Maintain orderly and clean site
• Provide temporary facilities and utilities
• Provide site security
• Protect existing structures and improvements
• Manage waste disposal

8.6 Quality Control

Design-Builder shall implement quality control including:

• Inspection program
• Testing as required
• Documentation of work
• Correction of deficient work

8.7 Coordination with Owner

Design-Builder shall:

• Provide regular progress reports (minimum weekly)
• Conduct progress meetings (minimum bi-weekly)
• Respond promptly to Owner inquiries
• Notify Owner of issues requiring decision

9. CHANGE ORDERS

9.1 Changes to Work

Owner may order changes to the Work. Changes affecting Contract Price or Schedule require a Change Order.

9.2 Change Order Process

1. Change is identified by either party
2. Design-Builder provides written proposal within [10] days
3. Proposal includes scope, cost, and schedule impact
4. Owner approves or negotiates
5. Change Order executed before changed work proceeds

9.3 Pricing of Changes

Changes shall be priced by:

• Lump sum agreement
• Unit prices (if established)
• Cost of Work plus fee percentage
• Time and materials with markup

9.4 Owner-Directed Changes

If Owner directs change before price agreement, Design-Builder shall proceed and cost shall be determined by mutual agreement or dispute resolution.

9.5 Design Changes

If design modifications are required due to:

• Owner request: Change Order with additional compensation
• Design-Builder error: No additional compensation
• Regulatory change: Change Order with additional compensation
• Unforeseen conditions: Change Order with additional compensation

10. OWNER'S RESPONSIBILITIES

Owner shall:

• ☐ Provide Owner's Criteria and program information
• ☐ Provide site access and surveys
• ☐ Provide available information about site conditions
• ☐ Review and approve design submissions promptly
• ☐ Make timely decisions
• ☐ Pay invoices when due
• ☐ Provide Owner's Criteria changes through Change Orders
• ☐ Designate authorized representative:

Owner's Representative:
Name: [Name]
Phone: [Phone]
Email: [Email]

11. DESIGN-BUILDER'S RESPONSIBILITIES

11.1 General

Design-Builder shall:

• ☐ Provide complete design and construction services
• ☐ Be responsible for design adequacy and code compliance
• ☐ Construct Project conforming to design intent
• ☐ Coordinate all design disciplines
• ☐ Employ licensed professionals for design
• ☐ Comply with Applicable Laws
• ☐ Maintain required insurance
• ☐ Provide required bonds (if applicable)
• ☐ Warrant the Work as provided herein

11.2 Key Personnel

Key Personnel shall not be changed without Owner approval.

11.3 Design-Builder's Representative

Design-Builder's authorized representative:

Name: [Name]
Phone: [Phone]
Email: [Email]

12. INSURANCE AND BONDS

12.1 Design-Builder's Insurance

12.2 Professional Liability Requirements

• Claims-made policy with [3] year extended reporting period
• Covers design errors and omissions
• Design Consultants shall maintain similar coverage

12.3 Additional Insured

Owner shall be named as additional insured on CGL and Umbrella policies.

12.4 Bonds

☐ Performance Bond: [100]% of Contract Price
☐ Payment Bond: [100]% of Contract Price
☐ No bonds required

Bonds from surety rated A- or better by A.M. Best.

12.5 Certificates

Design-Builder shall provide certificates and applicable endorsements before commencing Work.

13. INDEMNIFICATION

13.1 Design-Builder's Indemnity

Design-Builder shall indemnify, defend, and hold harmless Owner from claims, damages, losses, and expenses arising from:

• Design-Builder's negligence or breach
• Defective design or construction
• Design-Builder's failure to comply with Applicable Laws
• Bodily injury or property damage caused by Design-Builder

13.2 Limitation

Design-Builder's indemnity for design errors shall not exceed [$_____ or the professional liability insurance limits].

13.3 Survival

Indemnification obligations survive completion or termination.

14. WARRANTIES

14.1 Design Warranty

Design-Builder warrants that Professional Services shall be performed in accordance with the applicable standard of care for design professionals.

14.2 Construction Warranty

Design-Builder warrants:

• Work shall conform to Construction Documents
• Materials shall be new and of good quality
• Work shall be free from defects in materials and workmanship

14.3 Warranty Period

• General Construction: [One (1) Year] from Substantial Completion
• Design Services: Subject to applicable statute of limitations/repose
• Equipment and Systems: As specified or per manufacturer

14.4 Correction of Work

During warranty period, Design-Builder shall correct defective Work at no cost to Owner within reasonable time after notice.

14.5 Manufacturer Warranties

Design-Builder shall obtain and assign manufacturer warranties to Owner.

15. COMPLETION AND CLOSEOUT

15.1 Substantial Completion

Substantial Completion occurs when:

• Project can be used for intended purpose
• All life safety systems operational
• Certificate of Occupancy issued (or equivalent)
• Only minor Punch List items remain

Design-Builder shall request inspection. Owner or Owner's representative shall inspect and issue Certificate of Substantial Completion.

15.2 Punch List

• List of items to complete or correct
• Design-Builder shall complete within [30] days
• Owner may withhold [150]% of Punch List value

15.3 Final Completion

Final Completion requires:

• All Punch List items complete
• All closeout documents delivered
• All inspections passed
• All lien waivers delivered
• Site cleaned and demobilized

15.4 Closeout Documents

Design-Builder shall provide:

• As-built drawings
• Operation and maintenance manuals
• Equipment warranties
• Training for Owner personnel
• Spare parts and attic stock
• Commissioning reports
• Final lien waivers

16. DEFAULT AND TERMINATION

16.1 Design-Builder Default

Design-Builder is in default if:

• Persistently fails to perform Work properly
• Fails to pay Subcontractors
• Materially breaches Contract
• Becomes insolvent

16.2 Owner's Remedies

Upon default not cured within [10] days after notice:

• Terminate Contract
• Complete Work using others
• Pursue damages

16.3 Owner Default

Owner is in default if:

• Fails to pay undisputed amounts after [30] days' notice
• Materially breaches Contract

16.4 Design-Builder's Remedies

Upon Owner default not cured within [14] days:

• Stop Work
• Terminate Contract
• Payment for Work performed plus reasonable profit on remaining Work

16.5 Termination for Convenience

Owner may terminate for convenience upon [30] days' notice. Design-Builder entitled to:

• Payment for Work performed
• Reasonable demobilization
• Reasonable overhead and profit on unpaid Work

17. DISPUTE RESOLUTION

17.1 Negotiation

Disputes shall first be subject to good faith negotiation between principals.

17.2 Mediation

If not resolved within [15] days, either party may demand mediation. Costs shared equally.

17.3 Binding Resolution

☐ Arbitration: Per [AAA Construction Industry Arbitration Rules]. Award is final and binding.

☐ Litigation: In courts located in [County, State].

17.4 Governing Law

Laws of [State] govern without conflict of laws principles.

17.5 Continuation of Work

Pending resolution, Work shall continue and payments shall be made for undisputed Work.

17.6 Attorneys' Fees

Prevailing party entitled to reasonable attorneys' fees.

18. LIEN WAIVERS

18.1 Requirements

With each Application for Payment:

• Conditional waivers for current payment
• Unconditional waivers for previous payment

18.2 Final Payment

Final payment requires unconditional lien waivers from Design-Builder and all Subcontractors/suppliers.

18.3 Lien Claims

Design-Builder shall keep Project free from liens and indemnify Owner from lien claims.

19. GENERAL PROVISIONS

19.1 Entire Agreement

This Contract is the entire agreement. Prior negotiations superseded.

19.2 Amendments

Amendments must be written and signed by both parties.

19.3 Assignment

Neither party may assign without consent, except Design-Builder may assign payments.

19.4 Severability

Invalid provisions severed; remainder enforceable.

19.5 Notices

Written notices to addresses in Section 1 by hand, mail, courier, or email.

19.6 Confidentiality

Neither party shall disclose confidential information without consent.

19.7 Independent Contractor

Design-Builder is independent contractor.

19.8 Survival

Warranties, indemnities, and dispute resolution survive termination.

19.9 Counterparts

May be executed in counterparts. Electronic signatures valid.

20. EXECUTION

IN WITNESS WHEREOF, the parties execute this Contract as of the Effective Date.

OWNER:

DESIGN-BUILDER:

EXHIBITS

Exhibit A: Owner's Criteria
Exhibit B: Design-Builder's Proposal
Exhibit C: Schedule of Values
Exhibit D: Project Schedule
Exhibit E: Insurance Requirements
Exhibit F: Lien Waiver Forms