Novation case study

Need some help to understand novation and how it can benefit good design? Find out more in this case study.

You can download the novation case study here or find the full text below.

Novation - Case Study
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Novation is a form of Design and Construct (D&C). Novation relates to where the architect’s contract with the client is transferred to the builder/head contractor on the same terms after the contract has progressed through the design development stage. Once the contract has been ‘novated’ the architect is responsible to the builder and no longer to the client, i.e. it is the client/architect agreement, which is novated to the builder.

Action to benefit good design 

  • Develop design in detail prior to tendering to D&C. Alternatively, retain contract with designer while developing design in collaboration with D&C contractor, and novate at documentation.
  • Ensure delivery of good design is a key criteria in the assessment of D&C tenders, including demonstrating previous works undertaken in similar contractual arrangements.
  • Preserve a right for the architect to communicate with the client after novation, but not a responsibility.
  • Identify the intent to novate the design team prior to their appointment, so that the team understand this arrangement, fees are clear and suitable design professionals are sought.
  • Engage an experienced project manager with a strong understanding of the need to deliver the design intent of the project.
  • Ensure there is a clean line of novation, outlining level of design development and documentation to be completed and agreed upon prior to novation.
  • Allow the design team opportunity to comment on proposed construction team tenderers.
  • Appoint the architect in advance of contractor and only novate the design team after the qualitative dimensions have been determined, including design intent and documentation.
  • Ensure adequate detail on documentation as part of the contract.
  • Ensure provision for independent design advice at key project milestones.
  • Require the completion of a design intent document before finalising the contract – and then ensuring independent assessment of its achievement and associated reward/penalty.

Case study: State Library Victoria, Vision 2020 Redevelopment

The Vision 2020 Redevelopment project significantly transformed the State Library Victoria (SLV), one of Victoria’s most important cultural institutions and Australia’s oldest and busiest library. The scope included refurbishing the library’s incomparable heritage spaces, creating innovative new spaces for children and teenagers, and reinventing services to embrace new technologies and promote digital literacy. Overall, public space was increased by 40% and seating by 70%.

The ambitious $88.1 million project was delivered in 2019 by Development Victoria (DV) on behalf of State Library Victoria and Creative Victoria (CV). The project was funded through a $60.4 million grant from the Victorian Government and more than $27.7 million raised through philanthropic support. The project client team (SLV and DV) developed an extensive written brief and tested the scope against the project budget. DV built into the design and delivery strategy multiple “holdpoints” for the project to realign scope, budget and programme and client signoff prior to proceeding to the next phase.

An open Expression of Interest (EOI) shortlisted four architectural practices to tender as lead consultant of a multi-disciplinary team through all project

phases, with the knowledge that novation would occur in the later design phases. Architectus was selected as Lead Consultant and contracting entity and partnered with Danish-based Schmidt Hammer Lassen as a sub-consultant alongside eight engineering and specialist design consultants. The construction contract was based on Development Victoria’s standard two-stage Managing Contractor contract, which provides for novation of the architect and other consultants at the point of contract award. The Managing Contractor contract allows for a period of early contractor involvement, site investigation and further design development prior to agreement of a Warranted Maximum Price.

Construction was scheduled in multiple intricately managed stages over five years to allow the library to remain open throughout the construction period. The project was further complicated by the site being a campus of 26 connected buildings from different eras, spaning the 1850’s through to the 1990’s. Selection criteria for the Managing Contractor were not driven by price, but instead explored their ability to operate in a collaborative environment with both client, project manager and design team, as well as their track record of complex heritage refurbishments and delivery of projects in a live environment. Built was appointed as the Managing Contractor.

The contractor appointment and subsequent novation of the design team were timed to be after the project client team had agreed on the significant strategic design decisions, but sufficiently early to allow for constructability input from the Managing Contractor. This input was further informed by as much detailed invasive site investigation as was possible in a live operating environment.

Key initiatives adopted to protect the design quality

  • The contractor tender occurred at 50% Design Development, allowing the Design Team time to adequately scope the works and establish quality benchmarks through fast-tracked documentation of some critical items. A full technical specification was produced as one of the tender documents.
  • A schedule of prototypes, samples and first completed examples formed part of the tender documents and the subsequent contract.
  • The novated design team remaining connected to the client and being included in key presentations and meetings. Monthly client reports also had a sparingly used ‘whistleblower’ clause to allow the architect to raise any matter they believed was not in accordance with design intent with the client.
  • Incentivising savings against the Warranted Maximum Price encouraged transparency around potential savings to be shared between the client and contractor, however sufficient mechanisms were embedded to ensure scope and quality were safeguarded.
  • A clear selection process for contractors fixed on the best qualifications, teams, methodology, company culture and experience level rather than the lowest cost.
  • The structure allowed for a collaborative environment which allowed for collective problem solving when the project team faced the inevitable challenges associated with such a complex project.


  • Heritage buildings with latent conditions that couldn’t be destructively assessed during the design phases as they were still operational and open to the public.
  • Staged construction was required to maximise ongoing operation of the library while ensuring public safety.
  • It was a busy constrained site with limited loading and staging areas.

What worked well

  • Rigorously testing the budget against scope prior to the Design Services tender, allowing conservative contingencies, and, meticulous cost planning through all project phases to ensure the project remained on budget.
  • Advanced design development of documentation with a full technical specification completed prior to novation with an extensive prototyping and samples schedule to safeguard scope and quality.
  • Collaboration between the Design Team and Contractor, with direct access to specialist subcontractors such as conservation painters and timber flooring contractors, to enable quick and effective problem solving and design resolution of unforeseen conditions on site.