How to fix the broken paradigm of risk transfer and procurement in construction

The construction industry is at a crossroads, grappling with legislative change, increasing scrutiny and macroeconomic pressures. Despite commitments to safety and collaboration in the wake of the Grenfell Tower disaster, on-the-ground practices often undermine these ideals.

Nowhere is this more evident than in the misapplication of design and build (D&B) contracts and the conflicting approaches to the principal designer (PD) role under Building Regulations. 

D&B, in its purest form, integrates responsibility by transferring design ownership to the contractor. However, over the past decade this model has devolved into a “design and dump” mentality where fully prescribed designs, resembling traditional contracts, are repackaged as D&B. This risk-shifting approach – driven by a fixation on transferring accountability downward – has become an accepted norm. 

In this context, the principles set out by the Building Safety Act (BSA) and Building Regulations update are at risk of being ignored. Instead of fostering collaboration and safety, the industry has grown accustomed to expediting design and procurement processes to unsustainable speeds, creating a culture where risk transfer overshadows responsibility and expertise.

This raises a critical question: is this approach right, sustainable and ultimately safe? 

The principal designer role: A game of pass the hot potato 

At the heart of the Building Regulations principal designer (BRPD) role lies a fundamental question: who is best placed and most competent to oversee the planning, management and monitoring of compliance? 

Legislation identifies the BRPD as the lead designer with “control over the design work”, a position echoed by RIBA guidance, which considers the architect the”natural choice”. This makes sense in traditional contracts, where architects typically preside over Stage 4 designs and oversee specific contractors’ design portions. 

However, in D&B contracts, the RIBA guide suggests that “it would be most sensible” to transfer the BRPD role to the contractor, who theoretically assumes design responsibility. This works in a textbook example of D&B, where contractors develop their own design proposals based on early stage employers’ requirements.

>> Also read: Grenfell shows it’s time to scrap design and build contracts

>> Also read: Tinkering with design and build won’t fix anything – but alliancing can

Yet, when you consider that most D&B contracts take the “design and dump” approach and have fully prescribed designs with often non-existent contractors’ proposals, the expectation on contractors to take on this risk and duty is actually quite dangerous – for everyone. 

Compounding the issue are onerous contract amendments designed to offload risk onto contractors. Today’s standard form contracts are rarely left unmodified and contain twice as many amendments as those from a decade ago, creating significant liabilities for contractors tasked with delivering designs they had no input in.

This entirely undermines the intent of the BSA and the need to establish informed oversight by those best equipped to influence safety-critical decisions early in a project’s lifecycle. 

The case for an independent principal designer 

Confusion around the BRPD role is exacerbated by insurers like Wren, who advise against architects they insure serving as BRPDs in D&B contracts due to liability concerns. As architects retreat from responsibility, contractors are left bearing risks they often lack the technical competence to manage. 

The solution may lie in appointing an independent BRPD: a neutral, technically competent third party to provide consistency and impartiality, and who serves to have a singular focus on safety and compliance. While this would require significant industry alignment and could address the misaligned responsibilities and expectations inherent across the industry. 

Re-evaluating procurement models 

The misuse of D&B to transfer risk raises a critical question: does this model still hold value? I would argue that the answer is “yes”, but only if we return to its foundational principles. Designers must remain accountable for their work, and risk transfer should be reflected in agreed contingencies, not convoluted contract amendments. 

Clients and consultants must resist overloading projects with contractor-designed portions (CDPs) that unfairly shift risk, inevitably leading to disputes and cost overruns. True collaboration, rather than adversarial practices, is essential for achieving better outcomes. 

Taking this further, are traditional models adequate and equipped to deliver efficiently, quickly and safely? Single-stage lump sum procurement leverages competitive tension to secure a lower initial price and provides fixed cost certainty. However, its success hinges heavily on a fully coordinated design, and sufficient time for designers to develop [RIBA] Stage 4 plans. Compressed timelines often lead to coordination issues and costly changes, undermining efficiency. 

Two-stage tendering allows for early contractor involvement, enabling more accurate risk pricing and collaborative design development. However, the additional time and resource costs, which are often overlooked, can offset the benefits. Analysis frequently shows little financial or programme difference between single and two-stage procurement once changes and delays are factored in – and this has ultimately led to growing traction of hybrid forms. 

Typical hybrid models combine the strengths of single and two-stage methods, engaging contractors early at [RIBA] Stage 2 or 3 while continuing design development. By overlapping these processes, clients can gauge market appetite, refine designs and achieve competitive pricing without sacrificing timelines. Early contractor involvement also enhances design validation, reducing inefficiencies and supporting cost certainty. 

A radical alternative 

Perhaps, then, we should ask: why not abandon traditional tendering altogether? With the abundance of data available to cost consultants and project managers, clients are better informed than ever. A streamlined process could shortlist contractors based on fees, added value and strategy, followed by direct negotiation against a validated cost plan. This approach would prioritise collaboration and trust, aligning strategies and contractors with client goals and reallocating time saved to project design and delivery. 

The inefficiencies of risk transfer and adversarial procurement processes undermine the progress intended by the BSA and, in the past year, these shortfalls have become evidently clear. Collectively we all have a part to play in fostering a safer, more equitable construction process: 

• Clients must lead by being open to and promoting fair risk-sharing and ensuring that there is clarity on accountably, roles and responsibilities. 
• Consultants must challenge outdated norms and embrace collaboration, prioritising project outcomes over individual liabilities. 
• Contractors must promote transparency and refrain from accepting risks beyond their capabilities instead of participating in the never-ending “race to the bottom”. 

At BW: Workplace Experts we have long advocated for clear design responsibilities set out within contracts and where possible a period to validate enabling clients to then make informed decisions should there be anything identified, rather than trying to exclude or price risk. More recently we have been promoting the need for an independent and regulated BRPD role, despite the perception that this is overly cautious. We believe an equitable structure can benefit all parties, clients, the contractor and the industry at large. 

The BSA was a much needed wake-up call, but we cannot let it devolve into another box-ticking exercise. Change requires action, not rhetoric. By prioritising collaboration and accountability, we can build safer, more efficient projects.

Surprisingly, it may even prove faster and more economical. The time for change is now. Let’s stop hiding behind contracts and start building trust, collaboration and accountability from the outset.