Electrical Contract – Design & Build

Design and build Contract Model

In this article, we briefly go trough:

How Terawatt delivers design and build electrical contracts for different types of construction projects
What concrete benefits the D&B electrical contract offers to the main contractor?
How a D&B electrical contract proposal is prepared?

A Brief Overview of Terawatt’s Design-and-Build (KVR) Expertise

As the name suggests, a design-and-build (D&B) contract is a turnkey delivery model where both design and implementation are included in one package. The contract is offered without completed electrical designs. Instead, the tender is typically based on documents such as electrical system descriptions or space programs. In some cases, the available input data may be very limited, making it essential to identify the key needs of the client and the building’s end users through discussion and, based on that, develop a well-reasoned solution proposal.

Approximately 15% of the electrical contracts we deliver are design-and-build (D&B) projects. In commercial construction, the share of D&B projects is even higher. At best, we have been involved already at the project development stage, allowing us to contribute our expertise and experience to the electrical implementation from the very beginning of the project. According to feedback from our clients, this early involvement has in some cases provided significant benefits in closing the deal and successfully delivering the project.

In addition to our strong experience in KVR contracting, the company’s financial stability ensures that projects progress on schedule and protects our clients from reputational risk and unexpected financial issues. One of our key strengths is our ability to deliver cost-effective D&B contracts by utilizing our own electrical designs.

Key Benefits of Design-and-Build Electrical Contracts for the Main Contractor

Based on extensive experience with design-and-build (D&B) projects, we can confidently recommend this delivery model for electrical works in construction projects. Below, we have outlined the key benefits for the main contractor.

Fewer Risks and Interfaces

When full responsibility for a building’s electrical systems is assigned to a single contractor, interface risks between design and execution during construction are significantly reduced. At the same time, the main contractor’s exposure to additional design costs or change-order expenses is minimized.

Reducing interfaces also means that all handover-related designs, documentation, and inspections come from a single source. Construction projects are often complex and involve multiple disciplines, and managing them becomes easier when responsibility for electrical systems rests with one dedicated partner.

Fewer interfaces typically also translate into fewer meetings and a lighter project management workload for the main contractor.

Improved Cost Control

When the electrical contractor is responsible for both design and execution, cost control for the main contractor is improved in several ways. One has already been mentioned above (reduced interface risks), while another relates to procurement.

With design and implementation under the same roof, procurement activities can begin already during the design phase, making purchasing faster and more efficient. There is more time to request quotes from multiple suppliers, and suppliers generally have better availability for deliveries scheduled further into the future. Early procurement also enables more accurate and reliable scheduling.

Execution-Driven Design

When design and execution are planned together, the resulting solutions are often more practical and easier to install. Combined with smoother procurement processes, this helps projects stay on schedule and enables solutions that require less installation time and material.

A smoother execution phase means fewer installation hours on site, which has a direct impact on costs and improves the main contractor’s competitiveness. In addition, execution-driven design often leads to a more functional end result that better serves the end users.

Access to Expertise Without In-House Resources

With a design-and-build (D&B) contract, the main contractor gains immediate access to technical expertise, knowledge of standards and regulations, and hands-on implementation experience. There is no need for the main contractor to employ an in-house electrical specialist, which reduces fixed organizational costs and further improves competitiveness.

Drafting Electrical Design Plans

The initial input data for a design-and-build (D&B) electrical contract may consist of materials such as architectural drawings and an electrical equipment list. Once the request for quotation is received, we begin preparing preliminary electrical design plans. At this stage, we define the detailed requirements of the different spaces in the future building: how many luminaires will be installed in each area, how power will be supplied, and how electricity will be distributed.

The preliminary design already addresses key elements such as lighting solutions, locations of electrical distribution boards, and the number of electrical outlets.

Terawatt’s experts define the number of electrical points in the preliminary design and determine how lighting is controlled as well as where electrical distribution boards are located throughout the building. The main switchboard, riser structures, and the connection capacity are also defined at this stage. These decisions form the basis for the cost calculation of the tender: the required amount of cabling, labor hours, and other components of the electrical contract needed for construction. Together, these elements determine the final price presented in the offer.

The preliminary design also takes future safety systems into account. These include all fire alarm systems, emergency lighting systems, and intruder alarm, video surveillance, and access control systems for the property. Our preliminary design is intended to be comprehensive enough for the client to utilize it in their own planning and decision-making processes. The preliminary design is always presented as part of the contract negotiations.

Tendering and Contract Negotiations for a Design-and-Build (KVR) Project

Based on the preliminary design plans and the selected solutions, the required quantities and system needs for the electrical contract are defined. Our estimators and the person responsible for sales for the project prepare a solution proposal and a tender for the project. The tender presents and itemizes all components included in the electrical contract, such as lighting systems, switchboards, various safety systems, cable routes, cable management systems, and electrical design.

It is also essential for the tender to address how heating systems and other electricity-intensive systems have been taken into account.

The tender may also include optional systems that are not necessarily required for the property but could provide added value. Our customers may propose these options to the project developer, or the options may be systems that the developer has requested to be evaluated. Typical optional systems include solar power plants, energy storage solutions, and electric vehicle charging systems.

In competitive tendering processes, typically between one and five contractors are invited to contract negotiations based on their bids. Price alone does not determine the final decision; well-informed main contractors carefully review the submitted tenders and their specific characteristics. At Terawatt, we aim to identify the individual priorities of each client or customer, and our tender proposals are designed to meet each client’s specific needs.

At Terawatt, sales activities are handled not only by the Head of Estimating and Sales but also by Project Managers and the CEO. Whenever possible, Project Managers always participate in contract negotiations, as they are also responsible for project execution. Our clients appreciate that the people responsible for delivering the project are involved in the negotiations, allowing decisions to be made directly at the table without unnecessary clarification rounds or additional negotiations.

We also find this approach beneficial ourselves: involving the people responsible for implementation as early as possible strengthens project outcomes. The closer sales and execution are to each other, the better. It is also easier to commit to a project when you have had the opportunity to influence its scope and solutions from the outset.

Summary

Design-and-build contracting is one of the cornerstones of Terawatt’s service offering, and we find D&B projects highly rewarding. Our long experience in electrical works, combined with a deep understanding of buildings and construction, allows us to deliver even greater value to our clients through the D&B model. In practical terms, this means that our clients are able to present more competitive bids to their own customers while managing lower risk.

We avoid both overdesigning and underdesigning projects. Instead, we aim to find an optimal solution that takes into account construction costs, the required systems and their scope and quality, as well as the needs and preferences of the end users.

However, design-and-build contracting requires trust in the contractor’s ability to take full responsibility. Especially during the tender phase, it is crucial that the proposed scope is clear and well-defined so that our clients can confidently present it forward. Time invested in reviewing the offer and preparing preliminary designs helps both parties avoid unpleasant surprises later in the project.