DD&C contracts – what and why?
The Insight
The Design Development and Construct (DD&C) contract lies between a Design and Construct contract and a Construct Only contract. For all parties, a DD&C is often advantageous. First, let's break down what is required from each party.
The key responsibilities for a Contractor under a DD&C are to adhere to the workmanship with the structural integrity and the quality of materials, as well as the suitability for purpose.
DD&C contracts are best suited to works where the Principal can provide documents which detail:
A clear and defined design
The established standards for details and finishes
Any required specifications for products and materials
DD&C contracts work best when the Contractor doesn’t need to conduct extensive investigative work or interact with outside authorities.
The documents provided by the Principal cannot be deviated from without approval. They are designed to indicate the minimum performance level expected from the Contractor. They mustn’t detail a work methodology for the Contractor. Doing so would make the Principal responsible for the suitability and warranty of the work.
A DD&C allows the Contractor some freedom in terms of the delivery methodology as long as they stay within the Principal’s design which was issued at tender.
The Impact
In contrast to a DD&C, a Design and Construct contract sees the Principal lose some control over the design while a Construct Only contract adds coordination risks to the Principal’s shoulders. As the Principal may not have sufficient resources in-house, a DD&C utilises the wider private sector’s resources. This also allows the Principal to take advantage of the time benefits that come with undertaking some works concurrently with others.
By giving the Contractor the flexibility to develop a work method suitable to their benefit and vary the design of the concealed elements, the Principal opens the door to cost saving initiatives. This flexibility is limited only by adherence of the fitness for purpose and the structural integrity.
A DD&C ensures the Principal knows what to expect from the finished project while the Contractor is able to design a work method suitable to their needs. The design is still, however, limited to the extent specified by the Principal.
By allowing the Contractor to take on a greater role in their area of expertise, the risk is mitigated between both parties and the responsibility of the contract deliverables is shared.
A DD&C typically allows for a more harmonious contractual relationship. As the Contractor is given the freedom for innovation, the project is able to become more profitable whilst delivering on the Principal’s requirements of standards and professionalism.