Construction Contracts for Your Refurbishment Project

Most club refurbishment projects fail before they even start, not because of poor design, but because the client picks the wrong delivery method. The type of construction contract you choose is one of the most important decisions you'll make in a project. It sets the framework for how costs are managed, how risks are allocated, and how smoothly the job runs from start to finish.

The stakes are real. According to the Centre for International Economics, 74% of large and complex Australian projects qualify as failures against their original targets, whether that's budget, time, or scope. A significant share of those failures trace back to the wrong procurement strategy.

Traditional procurement: clear on paper, risky in practice

The most familiar method is the traditional procurement route. In this model, you appoint your project team, including architects and service engineers, to prepare a full construction documentation package. Once complete, that package is sent to tender, and only then do you appoint a builder to deliver the works.

At first glance, it looks neat and orderly. Every detail is designed upfront, builders price from the same set of drawings, and you feel like you're in control. But in practice, traditional contracts can be slow, costly, and prone to budget blowouts, particularly in refurbishment projects where hidden site conditions are common.

Imagine discovering asbestos, structural weaknesses, or outdated services during demolition. None of that was in the tender drawings. The builder is entitled to claim variations, and suddenly your "fixed price" contract isn't so fixed after all. Research from HJA (2022) found that traditional contracting fosters a "culture of dispute and litigation" due to the higher number of contractual interfaces and split responsibilities between design and construction teams.

The cost of getting it wrong is not trivial. An Allens (2022) study found that disputes absorb 2.6% of total project costs across Australian construction, money that goes to lawyers and mediators instead of bricks and mortar.

Design and construct (D&C): faster, but not without trade-offs

An alternative is the Design and Construct (D&C) contract. Here, you take the project through early design development, then hand the responsibility for finalising the design over to the builder.

The advantages are compelling:

• Speed - construction often starts earlier, with design and build phases overlapping.
• Cost certainty - you lock in pricing earlier, giving more confidence in the budget.
• Single point of responsibility - the builder takes ownership of design coordination and delivery, which significantly reduces dispute risk compared to traditional procurement.

But there are trade-offs. With D&C, you sometimes compromise on design intent and finishes, as the builder seeks to keep costs down. Transparency can also be reduced: you may have less visibility of preliminaries, builder's margins, or subcontractor costs. And while variations are less common at the start, they can creep in further down the track if the brief isn't rock solid.

Traditional vs D&C: side-by-side comparison

Factor	Traditional Procurement	Design & Construct (D&C)
Design control	Full client control - architect reports to you	Builder controls final design - risk of value engineering
Cost certainty	Low until tender - variations common	Higher - fixed price locked earlier
Timeline	Longer - sequential design then build	Shorter - design and build overlap
Risk allocation	Split between client and builder	Mostly with builder
Variation risk	High - hidden conditions trigger claims	Lower initially, but brief must be airtight
Transparency	Full visibility of costs and subcontractors	Reduced - builder margins less visible
Dispute risk	Higher - separate contracts, more interfaces	Lower - single point of responsibility
Best for	Design-critical projects, complex heritage	Time-sensitive projects, budget-driven

Which contract is right for you?

The reality is there's no "one size fits all" construction contract. The right procurement pathway depends on the type of refurbishment, your budget priorities, and your appetite for risk.

• If design quality is critical, and you're prepared for a longer program with potentially higher costs, traditional procurement gives you the greatest design control.
• If time and budget certainty matter most, a D&C contract can deliver faster outcomes and clearer pricing, but you'll need to accept some compromises.
• For complex refurbishments with unknown conditions, hybrid contracts or negotiated arrangements may provide the flexibility needed to manage risk.

The key is making this decision early, before you start design development or tendering. Get it wrong, and you can set yourself up for disputes, delays, and spiraling costs.

Why client-side project managers add value

This is where a client-side project manager earns their keep. Acting independently of the builder, our role is to:

• Evaluate procurement options - weighing up the pros and cons of traditional, D&C, or hybrid contracts for your specific project.
• Keep builders honest - interrogating preliminaries, margins, and provisional sums to make sure pricing is fair.
• Align planning, cost, and construction - making sure approvals, budget forecasts, and buildability all line up.
• Manage variations - monitoring changes and negotiating fair outcomes if they arise.

In refurbishment projects, where uncertainty is high and hidden conditions can derail even the best-laid plans, having this independent oversight is the difference between success and failure.

Avoiding delays and surprises

The best projects are the ones where the contract, design, and budget all align before work begins. That means:

• Freezing the scope and design early, with only essential adjustments allowed later.
• Choosing the right procurement route for your priorities.
• Getting realistic advice on costs, risks, and timeframes upfront.

With the right contract strategy in place, refurbishments and fit outs can run smoothly, delivering exactly what you set out to achieve from day one.

Final thoughts

Your choice of construction contract isn't just a formality. It's a strategic decision that shapes the entire project. Traditional contracts give design control but expose you to delays and cost risks. D&C contracts provide cost certainty and speed but can compromise design quality and transparency. Each comes with trade-offs, and every project requires careful analysis.

As a client-side project manager with an architectural background, I help clients navigate these options and manage the risks. The outcome? Fewer delays, fewer surprises, and a refurbishment that delivers on budget and on time.

If you're planning a refurbishment or fit out and want to avoid budget blowouts, hidden costs, or design shortcuts, get in touch. I'll help you find the right contract pathway and make sure your project delivers exactly what you need.

Frequently asked questions

What is the difference between traditional and D&C contracts?

In a traditional contract, you engage an architect and consultants to fully document the design before tendering to a builder. The builder prices from completed drawings and builds to specification. In a Design and Construct (D&C) contract, you develop the design to a certain stage, then hand responsibility to the builder to finalise the design and deliver the works. The key difference is who carries the design risk: in traditional, it sits with the client and their consultants; in D&C, it transfers to the builder.

Which contract type is cheaper for a club refurbishment?

It depends on the project. D&C contracts often appear cheaper upfront because the builder locks in a price earlier and carries more risk. But if the brief is poorly defined, variations can still blow out the budget. Traditional contracts give you more control over quality and specification, but the sequential process (design first, then build) takes longer and hidden site conditions in older club buildings frequently trigger costly variations. For most club refurbishments, the total cost comes down to how well the project is scoped and managed, not just which contract type you pick.

Can I switch from traditional to D&C mid-project?

Technically, yes, but it is messy and expensive. Switching mid-project means renegotiating contracts, potentially paying out existing consultants, and reworking documentation to suit the new delivery model. It also introduces confusion about who is responsible for design decisions already made. If you are considering a change, it is far better to make that call before you start tendering. Get proper procurement advice upfront and you will avoid this situation entirely.

Do I need a project manager with a D&C contract?

Absolutely. A D&C contract shifts design and construction risk to the builder, but it does not remove the need for independent oversight. The builder is incentivised to value-engineer finishes, reduce scope where possible, and protect their margin. A client-side project manager reviews the builder's design development, checks that the brief is being met, scrutinises costs, and holds the builder accountable on quality and program. Without one, you are relying on the builder to police themselves, and that rarely ends well.