What Recent Federal Design-Build Changes Mean for AEC Firms

After years of losing ground, federal design-build is gaining traction thanks to recent congressional support.  

The original National Defense Authorization Act (NDAA) of the late 1990s made design-build the default delivery method for the Department of Defense (DoD). It accounted for 75% of construction acquisitions at its peak, but usage fell to 25% over the following decade as agencies selected delivery methods on a case-by-case basis.

The recent FY2026 NDAA (Section 2809) adds tools to support the use of progressive design-build (PDB) for complex, higher-risk military construction (MILCON) work where it fits best. This is the first time Congress has given the DoD express statutory footing for PDB, rather than having agencies apply it under a prototype or other type of Other Transaction Authority.

The change signals renewed momentum and expanded authority for more collaborative project delivery methods, rather than relying solely on traditional design-build.  

But why the change now?  

Traditional design-bid-build MILCON projects have faced ongoing schedule delays and rising costs, giving the administration and Congress good reason to take legislative action rather than leave the decision to individual agencies. The shift also reflects a broader industry trend, with design-build projected to account for nearly half of U.S. construction spending by value. Will this impact architecture, engineering, and construction (AEC) firms? For federal projects, absolutely.

The shift expands the authority for PDB and other accelerated, collaborative delivery methods, creating new opportunities for AEC firms by unlocking the key benefits the federal design-build projects deliver. It also opens the door to nontraditional federal construction contractors through the use of Other Transaction Authorities and not just Federal Acquisition Regulation-based contracting methods and limitations.

Integrated Teams Drive Better Decisions

Design-build brings designers and contractors together, creating a collaborative environment where engineering, constructability, cost, and schedule considerations are evaluated as the project develops. Designers work alongside estimating and scheduling teams to refine solutions, address challenges, and make informed decisions before construction documents are finalized. For federal projects, established relationships and a proven ability to work together can strengthen team qualifications and improve project execution.

Design-Build Accelerates Project Delivery

Unlike traditional design-bid-build delivery, design-build allows design and construction activities to overlap. The integrated process also reduces overall project risk, design changes, and eliminates a separate procurement phase, helping federal agencies shorten schedules and obligate construction funding sooner.

Early Contractor Involvement Improves Cost and Risk Management

When contractors participate during concept development and validation, they provide real-time input on pricing, constructability, site logistics, material availability, and long-lead equipment. This allows teams to identify and address potential risks, such as unforeseen site conditions, utility conflicts, or sourcing challenges, before they affect construction. By resolving issues early and negotiating pricing as the design evolves, teams can reduce change orders, improve cost predictability, and minimize project disruptions.

What’s Ahead for Federal Design-Build  

Accelerated design-build delivery using Other Transaction Authorities is expected to continue growing across the federal market, particularly within the DoD.  

Other markets may follow a different path, operating under different authorities and procurement requirements. Still, the federal market is moving toward greater use of collaborative project delivery methods. Understanding these changes now can help firms prepare for new federal opportunities ahead.

To learn more about these changes or federal design-build, contact us.  

FAQ

What is progressive design-build (PDB)?

Progressive design-build is a project delivery method that brings owners, designers, and contractors together early in the planning process. The team collaborates on scope, budget, risk, and constructability before negotiating the final construction price.

What changed for progressive design-build in federal projects?

The FY2026 National Defense Authorization Act removed a significant barrier to using progressive design-build on complex military construction projects, giving the Department of Defense clearer authority to implement the approach.

Why is the Department of Defense expanding progressive design-build?

The change is intended to address ongoing challenges with project schedules, cost growth, and project complexity. Progressive design-build encourages earlier collaboration and more informed decision-making.

How does progressive design-build differ from traditional design-build?

Traditional design-build often requires contractors to submit a fixed price based on a partially developed design. Progressive design-build allows the team to develop the design collaboratively before negotiating the final construction cost.

What are the benefits of federal design-build projects?

Federal design-build projects can improve collaboration, accelerate project delivery, increase cost predictability, and reduce construction risks through early contractor involvement.

How can AEC firms benefit from increased federal design-build opportunities?

Architecture, engineering, and construction firms can benefit from expanded opportunities to participate in collaborative project delivery teams, strengthen contractor partnerships, and pursue more complex federal projects.

Will progressive design-build become more common in the federal market?

Many industry observers expect its use to increase, particularly within Department of Defense programs, as agencies seek more efficient approaches to delivering complex facilities.