What type of reimbursement is typically used with the Design-Bid-Build method?

In the Design-Bid-Build project delivery method, the most common type of reimbursement used is the lump sum contract. This approach involves the contractor providing a single price for the entire project based on the detailed design provided by the owner. The owner and contractor agree on this fixed amount before the work begins, which helps establish a clear budget line and allows for straightforward financial management during the project's execution.

This method is aligned with the typical characteristics of Design-Bid-Build, where the project is fully designed before any construction bids are solicited. The lump sum arrangement promotes cost control for the owner, as the contractor assumes the risk for any cost overruns unless there are changes in scope or other significant alterations during the project. The simplicity and clarity of the lump sum format make it particularly appealing in this delivery method, encouraging competitive bidding and providing a clear basis for project scope and expectations.