Large construction projects primarily involve design-build work, where a design firm and contractor join forces, either through a joint venture or in a prime contractor/subcontractor relationship, to design and construct the project. The design-build team owns the design and the related risk. Contractors with design liability tend to see their profits fall significantly compared to those who share risk, the study shows.
“We discovered that many of these large design-build projects in the civil space, whether done through an owner or public-private partnership, performed quite poorly. And we wanted to investigate,” said Stan Halliday, chief underwriting officer for construction surety with Travelers.
