Design-build versus plan-and-spec

Definition

Whether the builder also drew it, which decides who owns a defect.

Why It Matters

On a plan-and-spec job the owner supplies the drawings and warrants that building to them will work, so a contractor who followed them is not answerable for a design that fails. On a design-build job the same company drew it and built it, and both halves of the failure are theirs. That line decides where the tail liability on every completed job sits, it is invisible in the profit and loss, and it changes what insurance the business needs. Ask which side each of the last three years of work fell on, contract by contract, because a company can run both and most of them do.

In numbers: A $400,000 foundation that settles is a claim against the designer on a plan-and-spec job and against the company you just bought on a design-build one, on identical work.