Construction Management vs Design and Build

Re-inventing Construction Management

The debate between Construction Management and Design and Build has shaped procurement decisions across the UK development sector for decades. Yet as contractor insolvencies mount and the Building Safety Act reshapes how higher-risk buildings are delivered, a growing number of developers and funds are questioning whether the traditional Design and Build model remains fit for purpose. Shore Construction has developed an alternative: one that combines the rigorous cost transparency of Construction Management with the hands-on site accountability of a principal contractor.

Understanding the traditional models

In a conventional Design & Build arrangement, the contractor assumes comprehensive responsibility for delivering a completed building at a fixed price. They take on design liability, procurement risk, inflationary exposure, and accountability for the entire supply chain. To manage these uncertainties, contractors build contingency into their pricing, sometimes openly through a dedicated allowance, often buried within line items across the contract sum analysis.

The commercial mechanics compound this. Main Contractor Discounts, where contractors retain a percentage of subcontractor payments, have become standard practice. Value engineering during the build phase offers further margin opportunity. The incentive structure encourages contractors to deliver for less than the agreed price, with the differential becoming profit. This creates an inherent tension between main contractor and the client (or employer's agent).

Traditional Construction Management sits at the opposite end of the spectrum. Consultancy firms manage projects on behalf of clients, coordinating subcontractors through sophisticated software platforms and charging a percentage fee for their services. The client retains direct contracts with the supply chain and bears the associated risks. However, these consultancies typically maintain a deliberate distance from site operations. Their teams inspect and report rather than supervise and direct.

James Hobden, Managing Director of Shore Construction, has observed this first-hand:

“Traditional CM consultancies are very, very hands off. The original model was designed primarily as a desk-based exercise, set apart from the project, save for a site visit at the end of each week. This created a disconnect between commercial control and programme delivery, which is the root cause of a lot of the challenges traditional CM jobs experienced.

A different approach

Shore Construction operates between these two models, though in practice the company sits closer to the Construction Management end. The distinction lies in how the role is executed. Shore Construction’s project teams are embedded on site daily, walking the job, supervising subcontractors, and managing delivery with the same intensity as any Design & Build contractor. They chair design team meetings, drive the programme, and take responsibility for outcomes, acting as an extension of the client's delivery team.

Critically, Shore Construction operates its own site logistics and labour force rather than outsourcing to third-party providers. Machine drivers, gate staff, labourers and handymen work under direct supervision. The company assumes the principal contractor role, meaning health and safety responsibility sits squarely with Shore Construction rather than being dispersed across multiple subcontractors with the client holding residual liability.

“In theory our model is halfway between the two, but in practice it’s much closer to the CM side,” explains Hobden. “We've deliberately designed our model so our project team are really hands-on. This builds on our strengths as a delivery-focused contractor and as a result the benefits flow through to both the programme and the commercial viability of the scheme. It's a win-win outcome for everyone involved."

Construction management and the Building Safety Act

The Building Safety Act has fundamentally altered the commercial calculus of Design and Build contracting. For higher-risk buildings (those over 18 metres, or over 11 metres where the HSE deems them higher risk), the Gateway 2 and Gateway 3 processes require a materially different approach before work commences. A principal contractor appointed under a Construction Management model carries the same dutyholder obligations as any other principal contractor: the difference is that clients retain direct visibility of how those obligations are being met. Changes during construction trigger fresh regulatory approval, and the traditional value engineering opportunities that contractors relied upon to enhance margins have effectively disappeared.

The commercial reality

There is a perception that cost certainty requires fixed-price contracting. The reality is more nuanced. On a recent competitive tender, Shore’s Construction Management approach came in ten percent below the Design & Build alternatives. The arithmetic is straightforward: the company removed the bond costs, eliminated the Main Contractor Discount, and stripped out the contingency that covers contractor risk.

James Hobden puts it simply:

“In the current climate, the risk premiums involved as a traditional main contractor, are making schemes unviable. And those that are, are often running on wafer-thin margins. Add in the implications of the Building Safety Act, and commercially it becomes incredibly difficult to make the numbers stack up for contractors and developers alike.

This creates a situation where schemes are being pushed back or redesigned, due to the risk equation. However if you approach the problem with a CM approach, schemes become viable once more, developers can be confident in the delivery and the risks become manageable for the contractor.”

Construction Management is not new. What Shore Construction has done is reimagine how it can be delivered: with the rigour and presence of a principal contractor, the transparency of open book accounting, and the accountability that comes from putting the company’s name on the health and safety documentation. 

As the industry continues to grapple with the consequences of contractor failures and the demands of the Building Safety Act, this approach represents a more sustainable path forward.