Construct-only: building to the client's design (and whose risk that is)

TL;DR

Construct-only is the procurement model where the principal engages the architect and engineers directly, produces a full set of issued-for-construction documents, then tenders the build to a contractor. The builder prices and builds strictly to those documents; design liability stays with the consultants and the principal. No PI insurance obligation falls on the builder for the design, but the builder still carries workmanship warranties, statutory warranties under state home building legislation (non-excludable for residential work), and the usual public liability exposure. The main commercial discipline: tender on the documents in front of you, qualify any gaps in writing, and document every RFI because on a construct-only job, incomplete or ambiguous documents become variations, not your design risk.

The model

Under construct-only (often called “design-bid-build” in international procurement literature), the principal runs two sequential contract packages:

Design package: the principal engages an architect for design and documentation, a structural engineer for structural drawings, and any specialist consultants (hydraulic, services, acoustic, fire). The consultants produce drawings, specifications and schedules to “issued for construction” (IFC) status.
Construction package: the principal puts the IFC documents to tender. The winning builder enters a build-only contract and constructs to those documents.

The two packages are deliberately separated. The builder has no contractual relationship with the design consultants. If the drawings conflict or contain an error, the builder raises an RFI with the principal (or the architect acting as superintendent/contract administrator), gets a direction, and is entitled to a variation if the direction changes scope or cost.

The standard commercial form for construct-only work is AS 4000 (general conditions of contract), which is administered by a superintendent who is typically the principal’s architect or project manager. The D&C equivalent form is AS 4902. For residential work, the HIA and MBA lump-sum domestic contracts are effectively construct-only instruments when the principal has engaged an architect to supply the design: the builder prices and builds to the architect’s drawings, the contract is between the builder and the owner, and the design consultants retain their own separate contracts with the owner.

Where design liability sits

Under construct-only, design liability is split as follows:

The design consultants (architect, structural engineer, services engineers) carry liability for the adequacy and coordination of their designs. If a detail fails because it was drawn incorrectly, the principal’s claim path is against the consultants, not the builder.
The principal holds the design contracts and, as between principal and builder, is responsible for the adequacy of the documents the builder is asked to build from. If the documents are deficient, the builder is entitled to directions and variations; the principal cannot pass the deficiency to the builder and refuse to pay.
The builder is responsible for building to the documents with proper workmanship. For residential work, state home building legislation (for example the Home Building Act 1989 (NSW) and equivalent acts in other states) implies non-excludable statutory warranties into the contract: that work will be done with due care and skill, that materials are good and suitable, and that the work is reasonably fit for purpose where the owner relies on the builder’s skill (verified 2026-06-11, NSW Home Building Act 1989 s 18B). These warranties apply regardless of procurement model.

The key point: the builder’s statutory and workmanship obligations remain live on a construct-only job. The procurement model shifts design liability away from the builder, but it does not strip the builder of all risk.

What the builder does carry on a construct-only job

Buildability review duty to warn. Before pricing or accepting a construct-only contract, a builder is expected to review the documents for buildability and raise any obvious constructability issues. Failing to flag a known problem during tender can create an obligation to absorb the fix, even where the design itself is the consultant’s responsibility.

RFI obligations when documents conflict. Where the drawings, specification and schedule conflict, the builder cannot choose the cheapest interpretation and say nothing. Standard form contracts establish a hierarchy (typically specification over drawings) and require the builder to notify the superintendent or contract administrator of conflicts and seek a direction. Silence is not a defence; an undirected interpretation that later proves wrong sits with the builder.

Temporary works design. Construct-only addresses the permanent works design only. The builder designs and is responsible for temporary works: formwork, shoring, propping, edge protection, access scaffolding. The consultant’s liability does not extend to how the builder sequences or supports the structure during construction.

Workmanship and materials. The builder must produce the completed work to the standards the contract requires, which typically means the relevant Australian Standards, the NCC, and good trade practice for anything the documents do not specify. A construct-only contract is not a licence to build to a lower standard because “the design is the client’s problem”.

Contrast with D&C and novated D&C

Model	Who holds the design contracts?	Who carries design liability to the principal?	PI insurance on the builder?
Construct-only	Principal (direct with consultants)	Design consultants	Generally not required for design
Design and construct (D&C)	Builder (engages or novates consultants)	Builder (works back through consultant chain)	Required or strongly advisable
Novated D&C	Principal then builder (consultants novated at contract execution)	Builder from novation date	Required or strongly advisable

On a construct-only job the builder is pricing and executing; on D&C the builder is pricing, coordinating and warranting. The lump-sum price on D&C carries a design-risk premium (commonly 3 to 8% of contract sum) to reflect this additional exposure.

Standard forms used

AS 4000 (general conditions for commercial construct-only): architect or engineer acts as superintendent, certifies progress claims and practical completion, assesses variations and EOTs. Standard on architect-designed commercial and custom-residential projects (verified 2026-06-11 against corpus-consistent commercial-contract practice; AS 4000 is Standards Australia’s general conditions, well established).
AS 4902 (general conditions for D&C): used where the builder takes on the design; not used for construct-only.
HIA and MBA lump-sum domestic contracts: residential construct-only instruments when the principal supplies an architect’s design. The builder prices to the issued documents, the domestic contract governs the build relationship, the state home building act implies non-excludable warranties, and the architect retains their own contract with the owner.

Builder-facing read

Construct-only is straightforward when the documents are good. The disciplines that protect builders on these jobs:

Tender to the documents you are given. Do not price to what you think the design should say. If the documents have gaps, either qualify the gap in your tender (stating your assumption) or price the highest reasonable interpretation.
Qualify gaps in writing at tender. A verbal “I assumed X” is worthless in a dispute. Qualifying letter at tender, written scope schedule at contract, or both.
Document every RFI promptly. On a construct-only job, an ambiguous or conflicting drawing becomes a variation once the superintendent issues a direction. If you build past the ambiguity without a direction and the result is wrong, you own the fix.
Read the contract’s document hierarchy. Most standard forms state that the specification overrides drawings, which overrides schedules, in cases of conflict. Know the hierarchy before you start.
Watch for fitness-for-purpose language. A construct-only contract that includes a “fit for purpose” obligation on the builder can inadvertently reintroduce design risk. Standard workmanship warranties are “reasonable skill and care”, not fitness-for-purpose. Read the general conditions for any fitness clause and get it struck if it reaches into design territory.

References

NSW Government, Home Building Act 1989 (NSW), s 18B: Warranties. https://legislation.nsw.gov.au/view/html/inforce/current/act-1989-147 (verified 2026-06-11).
Housing Industry Association, HIA Lump Sum contract guidance (general reference; residential construct-only instrument when architect supplies the design). https://hia.com.au (verified 2026-06-11 as a recognised residential-contract publisher).
Standards Australia, AS 4000-1997 General Conditions of Contract (general reference; construct-only standard form). Well-established in Australian commercial-construction procurement (verified 2026-06-11 against corpus-consistent usage across contracts/hia-contracts-overview, glossary/contract-administrator, glossary/architect-administered-contract).