What is Progressive Design-Build?
Progressive Design-Build: What Construction Attorneys Need to Know About Risk Allocation and Project Selection
The construction industry continues to evolve, and Progressive Design-Build (PDB) has emerged as one of the most significant developments in project delivery methodology. For construction attorneys, understanding PDB isn't just about staying current with industry trends—it's about recognizing how this delivery method reshapes risk allocation, contract structures, and legal exposure for all parties involved.
Defining Progressive Design-Build Beyond Industry Buzzwords
Progressive Design-Build breaks away from the "design, bid, build" paradigm that has dominated construction for decades, and is a natural evolution from traditional design-build. But rather than forcing contractors to submit fixed-price proposals based on incomplete designs—often only 20% developed or less—PDB introduces a two-phase collaborative approach that defers pricing commitments until design reaches more meaningful levels of completion.
Phase One involves preliminary design development, preconstruction services, and transparent cost collaboration between owner and design-builder. The design-builder works alongside the owner to refine project requirements, identify potential issues, and develop realistic cost estimates. This phase typically concludes at a contractually pre-determined design completion level.
Phase Two encompasses final design completion, construction, and commissioning based on the agreed-upon contract price established at the end of Phase One. Critically, if parties cannot reach agreement on Phase Two commercial terms, the owner retains an "off-ramp" option to use the design and proceed with alternative delivery methods.
This structure addresses a fundamental problem in traditional design-build: the information asymmetry that forces contractors to price significant unknowns. As one industry expert observes, when projects reach "$2 billion, $5 billion, $10 billion" with timelines spanning "five years, ten years, twenty years," contractors become "increasingly unwilling to ‘wrap large risks’ and provide fixed prices".
Strategic Project Selection: When PDB Makes Legal Sense
Not every project benefits from PDB's collaborative approach. Construction attorneys should understand which project characteristics align with PDB's risk mitigation advantages and which might create unnecessary legal complications.
Complex Infrastructure Projects: Multi-stakeholder projects involving "municipal, road, railway and utility authorities, regulatory agencies" demonstrate PDB's strongest value proposition. These projects benefit from early stakeholder engagement and collaborative problem-solving that PDB facilitates. Airport infrastructure exemplifies this application—San Francisco International Airport reports using PDB for "billions of dollars' worth of projects" over 16 years with minimal litigation
High-Risk Environments: Projects with significant uncertainty about existing conditions, aging infrastructure requirements, or physical site constraints benefit from PDB's collaborative risk identification process. Water and wastewater treatment facilities represent a particularly strong application, as they often involve intricate layers of communication and may require design evolutions during construction due to changing community needs and discoveries of new underlying conditions.
Regulatory-Intensive Projects: Projects requiring extensive permitting or regulatory approval benefit from PDB's early engagement model. The collaborative approach enables proactive coordination with regulatory agencies and reduces the likelihood of late-stage compliance issues that can trigger claims and delays.
Contract Drafting Considerations for Construction Attorneys
PDB contracts require careful attention to several unique provisions that don't appear in traditional delivery methods. The off-ramp mechanism needs precise drafting to avoid disputes over intellectual property rights, compensation for Phase One services, and transition procedures if parties cannot reach agreement.
Professional liability insurance specifications must address the phased nature of PDB delivery. Some insurers bill entire premiums upfront with proportional return if the owner exercises the off-ramp, while others split coverage and premium by phase. Attorneys should ensure contract insurance requirements align with available coverage structures.
Change order procedures require modification for PDB's collaborative approach. While traditional design-build seeks to minimize changes through upfront risk transfer, PDB acknowledges that design evolution is inherent to the collaborative process. Contract language should establish clear procedures for documenting design changes and their cost implications during Phase One.
The Bottom Line for Construction Attorneys
Progressive Design-Build represents more than an incremental improvement in project delivery—it changes how parties can allocate risk, structure relationships, and resolve disputes. For attorneys advising construction industry clients, understanding PDB's legal implications isn't just about keeping up with trends. It's about recognizing how this collaborative approach can reduce litigation risk while creating new opportunities for value creation in complex construction projects.
As infrastructure needs grow more complex and traditional adversarial approaches prove increasingly expensive and ineffective, PDB offers a pathway toward more successful project outcomes. Construction attorneys who master PDB's legal framework will be better positioned to serve clients navigating the industry's evolving landscape.
Need help deciding whether PDB is right for you? Contact Elkhoury Law.
