Design Build vs Fixed Price: Which Saves More Money?
- Blackrock Development Management
- May 30
- 4 min read

Build Smarter, Not Harder: Why Design Build is Changing the Game
Imagine a world where construction projects finish faster and cost less. Sound too good to be true? Welcome to Design Build—a game-changing approach that’s transforming how projects are delivered across commercial sectors.
Why Design Build?
Traditional methods like fixed-price contracts often come with unexpected expenses, design conflicts, and time delays. Design Build flips the script by integrating designers and builders under a single contract. This early collaboration can cut project costs by 6% and reduce timelines by 12%, based on industry benchmarks. In a climate where material prices and labor costs are constantly in flux, having your contractor involved from the start allows for real-time adjustments and smarter value engineering solutions.
Comparing Contract Models: Design Build vs. Fixed Price
Choosing the right delivery model affects your budget, timeline, flexibility, and stress level. Owners, developers, and even lenders need to understand how these models shape the overall experience.
Design Build:
One contract, one team from concept to completion
33.5% faster delivery than traditional methods
Fewer change orders thanks to early contractor input
Flexible pricing models: cost-plus, guaranteed max price (GMP), or fixed-price
Fixed Price:
Upfront pricing provides predictability
Cost padding is common to account for risk and uncertainty
Limited flexibility—any design changes require formal (and costly) change orders
Better suited for projects with fully completed designs
Design Build also empowers faster decision-making. When issues arise, resolution happens within one unified team, rather than through back-and-forth between architect, contractor, and owner. This seamless communication is a major contributor to its faster delivery timelines.
The Hidden Costs of "Predictability"
While Fixed Price may seem simpler, it often hides risk premiums, higher change order fees, and limited contractor involvement early on. These factors inflate costs and introduce uncertainty. Owners are also more vulnerable to scope gaps if the initial drawings don’t fully capture site complexities or programmatic needs.
By contrast, Design Build projects tend to experience lower cost overruns, reduced rework, and fewer delays. Risks are shared early between owner, designer, and contractor, leading to smoother execution. When construction professionals are part of the design process, they can help optimize building systems, flag material delays early, and even streamline permitting.
Long-Term Value: Looking Past the Initial Price Tag
Design Build is about more than short-term savings. It often results in:
Better quality control and fewer construction defects
Lower maintenance and operating costs
Faster ROI due to early completion
Higher resale value thanks to more durable builds
This model incentivizes teams to think holistically. With contractors contributing to system design, clients often end up with more energy-efficient and sustainable buildings. That means reduced utilities and deferred maintenance costs for years to come.
Even though Design Build projects may limit traditional bidding competition, selecting based on qualifications ensures experienced teams that align with your goals. While upfront costs can vary, the long-term financial benefits often outweigh them. Teams selected through qualifications-based processes are often more invested in project outcomes and less focused on minimizing cost at the expense of quality.
Integrated Risk Management & Change Control
One standout benefit of Design Build is the mitigation of change orders. Because the contractor is involved during design, potential issues are flagged early—not after walls are up. In contrast, Fixed Price projects average 10–15% in cost growth due to formal change order processes.
Additionally, Design Build allows for clear payment structures—like milestone-based draws or GMP agreements—tailored to your project's scope. Fixed Price contracts, on the other hand, fix costs regardless of actual conditions, often at the owner's expense if the scope changes unexpectedly.
If something in the original scope needs to change—say, relocating plumbing or switching finish materials—Design Build can adjust more nimbly. The integrated team is already aligned, making modifications less cumbersome and more cost-efficient.
The Role of Planning in Both Models
Design Build incorporates design and execution from day one, typically allocating 7–15% of total costs to planning. This investment in alignment helps reduce delays and rework, which can consume up to 5% of project costs in traditional models.
Fixed Price contracts place greater weight on upfront design completion before contractor involvement. This can lead to disconnects between design and constructability—and unanticipated cost growth. If the architect specifies a product with a 12-week lead time, but procurement doesn’t start until the construction phase, you're already behind.
This gap between design intent and construction reality can make Fixed Price projects more susceptible to budget overruns, especially if site conditions or codes shift after design is completed.
When Does Fixed Price Make Sense?
Fixed Price still has its place. For projects with a clearly defined scope, minimal customization, and a fast-track design phase already complete, Fixed Price can offer predictability and stability. In government work or bond-funded initiatives, it often meets compliance requirements for competitive bidding.
However, even in these contexts, more public owners are beginning to adopt hybrid models like CM-at-Risk or Progressive Design Build to blend collaboration with accountability. The industry trend is shifting toward models that reward shared risk and proactive alignment.
Comparison Table
Aspect | Design Build | Fixed Price |
Cost Savings | 6% lower unit costs | Risk premiums add 8–20% |
Project Timeline | 33.5% faster; 12% quicker completion | Construction starts after full design |
Risk Allocation | Risks shared between all parties | Contractor bears most risk |
Change Orders | Reduced through early collaboration | Formal change orders can add 10–15% to total cost |
Design Phase Costs | 7–15% of total costs for integrated design | Higher upfront costs for completed design |
Cost Growth | 3.8% less cost growth | Higher cost growth due to limited flexibility |
Management Fees | Transparent, tailored to scope | Often padded with contingencies |
Quality Control | Embedded throughout design and build | May be affected by lowest-bid mentality |
Payment Structure | Cost-plus, GMP, or fixed price options | Fixed, regardless of actual spend |
Team Collaboration | Single leadership, integrated teams | Design and construction operate separately |
Final Thoughts
Design Build stands out as a cost-effective, agile, and high-performance alternative to traditional Fixed Price contracts. By promoting early collaboration, transparent budgeting, and shared accountability, it helps minimize change orders, reduce delays, and improve long-term outcomes.
Ultimately, your decision depends on your risk tolerance, project clarity, and financial goals. Fixed Price contracts may suit clearly defined scopes where predictability is paramount. But for projects seeking speed, flexibility, and cost efficiency, Design Build is the clear frontrunner.
Whichever model you choose, ensure your partner understands the delivery method inside and out—because the contract you choose lays the foundation for your project's success.
Comments