How to Compare Design-Build Proposals When the Designs Are Not the Same
Updated: Sep 20
Two design-build teams, two proposals, two different designs, two different numbers. One is nine per cent cheaper. The temptation is obvious and the trap is obvious with it, because in design-build the price and the design arrive together, so a lower number can mean a sharper team or it can mean a smaller building.
Learning to compare design-build proposals properly is the single most valuable procurement skill an owner can have. Here is the process I use with clients, and it takes an afternoon rather than a week.
Why you cannot compare design-build proposals on price alone
In a traditional tender, every bidder prices the same drawings, so price is the only variable and the lowest compliant bid wins. Design-build deliberately removes that condition. You describe the outcome you want, and each team proposes its own solution.
That means the two numbers in front of you are answers to two different questions. Comparing them directly is like comparing the cost of two holidays without checking how many nights each one covers.
Step one: write down what you are actually buying
Before you read either proposal again, write a single page listing what the project must deliver. Usable area and its breakdown. Mechanical and electrical capacity. Acoustic and thermal performance. Finish standard by space type. Accessibility. Sustainability targets. Occupancy date. Operating cost expectations.
If you cannot write that page, the proposals are not the problem. The brief is. Every good design-build procurement starts with the owner defining the outcome tightly and the solution loosely.
Step two: normalise the proposals onto one sheet
Separate base scope, allowances and exclusions
Build three columns: your requirement, what proposal A includes, what proposal B includes. Then split each proposal's number into base scope, allowances, cash allowances for items not yet designed, and contingency. An allowance is a placeholder, not a price. A proposal carrying a twenty thousand dollar allowance for millwork against a competitor's priced millwork package is not cheaper, it is less resolved.
Convert performance claims into numbers
Better envelope, more efficient plant and higher glazing performance are all claims until someone attaches a figure. Ask for the numbers that matter to you: effective R value, projected energy use, expected maintenance cost. A design that costs three per cent more and runs fifteen per cent cheaper is a different proposition once you put a ten-year number on it.
Price the differences rather than ignoring them
Where the designs genuinely differ, put a cost on the difference. If A has eight hundred square feet more usable area, value that area at your own rent or productivity number. If B finishes six weeks earlier, value those six weeks at your carrying cost or rent. Now the two numbers are describing the same thing.
Step three: hunt for the scope gaps
Scope gaps are where budgets die, and they hide in the same places every time. Demolition and abatement. Existing conditions and remediation. Permits, development charges and utility connection fees. Temporary services and protection. Fire alarm integration and life safety verification. Commissioning. Furniture, fixtures and equipment. Signage and wayfinding. Security, access control and low voltage. Landscaping and site restoration. Warranty period and maintenance training. Testing and inspection fees.
Go down that list against each proposal and mark included, excluded or silent. Silent is the dangerous one. Every item marked silent should go back to the proponent as a written question before you score anything.
Step four: score what is not on the page
The team you actually get
Ask who will run the project day to day, not who came to the presentation. Ask what else those people are running during your construction window. The named project manager matters more to your outcome than almost anything else in the document.
Schedule credibility
Compare the two schedules for permit duration, long-lead procurement and the float they carry. A schedule with no float is not an aggressive schedule, it is an optimistic one, and optimism is charged back later as a delay claim.
Contract terms and risk allocation
Read the commercial terms with the same attention as the price. How are changes priced, what markup applies, who carries unknown site conditions, what liquidated damages or bonusing apply, what insurance is carried and how are disputes resolved. A proposal that is two per cent cheaper with materially worse risk allocation is not cheaper.
What a low number usually means
A meaningfully lower price in design-build is almost never a discount. It is usually one of five things: less scope, thinner allowances, a leaner design solution, more risk transferred back to you, or a deliberate buy-in that will be recovered through change orders. Any of those can be acceptable once you can see which it is. None of them should be discovered in month four.
A simple weighted approach
You do not need a procurement department. Score each proposal out of ten on five criteria and weight them: normalised price (forty per cent), technical solution against your requirements (twenty-five), team and past performance on comparable projects (fifteen), schedule credibility (ten) and commercial terms (ten). Adjust the weights to your priorities, but set them before you open the envelopes rather than after, because weights chosen afterwards are simply a justification for a decision already made.
The honest summary
When you compare design-build proposals, you are not comparing prices. You are comparing two different buildings, two different teams and two different risk positions that happen to have prices attached. Normalise the scope, price the differences, chase every silence, and only then look at the numbers. The proposal that wins on that basis is usually not the cheapest one, and it is almost always the least expensive by the time the building opens.
Common questions about comparing design-build proposals
Why can I not just compare the two prices?
Because in design-build each team prices its own design, so the two numbers answer two different questions. Until you normalise them against a single written statement of what the project must deliver, you are comparing two different buildings rather than two prices.
Where do scope gaps usually hide?
In the same places every time: demolition and abatement, existing conditions, permits and development charges, site servicing, commissioning, furniture, technology and signage. Mark every item in each proposal as included, excluded or silent. Silent is the dangerous one.
What does a meaningfully lower price usually mean?
Almost never a discount. Usually less scope, thinner allowances, a more optimistic schedule, a lighter specification, or a team that is stretched. Find out which one before you assume you have found value.
How should I score competing proposals?
Five weighted criteria: normalised price, scope completeness, the team actually assigned, schedule credibility and commercial terms. You do not need a procurement department, you need the same five questions asked of both.
If you are holding two proposals and cannot tell them apart, that is a good moment for an outside read. You can see how I work with owners and project partners on project solutions.
This article is general information about commercial construction practice in Canada, not legal advice. Have your own counsel review your contract.
Connect with Carolee on LinkedIn: linkedin.com/in/carolee-w-turner-2002417
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