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Design-Build Construction Projects: Overview and Tips for Success
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February 2, 2009
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By W. Samuel Niece
Public and private owners, contractors and design professionals all have an interest in better project delivery methods. Design-build is viewed by many as an alternative to the inefficiencies and adversarial nature of traditional design-bid-build contracting. Following is a guide to design-build contracting that provides an overview of benefits and risks, advice for successful projects, practical information, and a look at new approaches, such as Integrated Project Delivery, Lean Construction and Building Information Modeling.
| A. | Tips for a Successful Design-Build Project
| 1. | Define your functional requirements (“what,” not “how”) early. Form should follow function. So, think about what is going to happen in your facility before you think about shape, features and aesthetics. Don’t become emotionally committed to one solution and close off the road to others too soon. To get the most out of design-build, you have to give the designer-builder some flexibility to innovate.
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| 2. | Decide whether design-build really is the best delivery system for your project and get stakeholder buy-in. If your CEO, mayor or governing board wants a facility to be his/her/its personal statement, then you may be better off with design-bid-build. If you can’t get the stakeholders to buy-in to the concept of design-build, then you may not want to try it.
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| 3. | Allocate risks fairly between the owner and the designer-builder. There is a tendency among some owners to try to shift as much risk as possible to the contractor. This can work with design-bid-build, where the owner can draft the contract package and then put it out for bid on a take-it-or-leave-it basis. But, that does not work with design-build because design-build requires more trust on both sides.
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| 4. | Let the designer-builder do its job. If you dictate almost all aspects of the design to the design-builder, you will not realize the potential benefits of design-build.
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| 5. | Monitor what is happening – delegate but do not abdicate. This sounds inconsistent with No. 4, but if the designer-builder is going in a direction that does not satisfy the owner’s functional requirements (either because the designer-builder is deviating from the owner’s program or because the owner’s program did not accurately reflect its functional requirements), then it is better to take corrective action sooner rather than later. The worst thing that can happen is to have construction under way and the facility taking shape in steel and concrete when one of the users or decision-makers says “that is not what I wanted.”
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| 6. | Insurance. Made sure you have insurance coverage (without overlaps or gaps) for all the project risks – or make a conscious decision to assume those risks. Do not be surprised when an uninsured risk materializes.
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Design-build is not new. From the time of Hammurabi (1800 B.C.) the concept of “master builder” was the predominant project delivery method. Under the Code of Hammurabi, the master builder had absolute responsibility for the success or failure of the project. There was a single point of responsibility, and there was no division between the designer and the builder.
Then, during the industrial revolution, increased specialization and the demand for capital caused changes in project delivery. Architecture and engineering evolved into “intellectual professions” while builders were viewed as “physical artisans.” This separation led to designers performing their work without participation (or input) from the builders. Efforts to address this disadvantage have led to such approaches as post-design constructability reviews and value engineering. However, these approaches do not deal with the root cause of the problem – the division of responsibility between two factions with often-conflicting goals.
The key distinction between design-build and design-bid-build is that in design-build, the design and construction components are packaged into a single contract.
The term “design-build” actually refers to a range of alternatives to the traditional project delivery system. A useful way to look at design-build is by what it is not. Traditional design-bid-build is a segmented, sequential process in which the owner first contracts with a design professional to prepare detailed, suitable-for-construction plans and specifications (or sometimes has them prepared by its in-house design professionals), then uses the detailed plans and specifications to solicit competitive bids for construction, and finally awards the construction contract to the low bidder. The term “engineer, procure, construct” (EPC) generally is applied to design and construction of power and process plants. Most of this discussion applies equally to design-build or EPC.
The traditional design-bid-build construction contract usually is awarded to the low bidder after competitive bidding. On the other hand, design-build contracts usually – but not always – are awarded on the basis of price and other factors (often referred to as “best value”), where the designer-builder offering the lowest price is not necessarily the winner.
The differences are highlighted when each project delivery method is broken down into steps.
Stages of traditional design-bid-build:
|  | Negotiate design contract.
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| | Prepare construction drawings.
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| | Bid construction contract.
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| | Construct project.
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Stages of negotiated (best value) design-build:
| | Describe scope.
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| | Negotiate design-build contract.
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| | Prepare construction drawings.
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| | Construct project.
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Stages of hard-bid design-build:
| | Negotiate bridging contract.
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| | Prepare design development drawings.
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| | Bid design-build contract.
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| | Prepare construction drawings.
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| | Construct project.
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| C. | Potential Advantages of Design-Build
| 1. | Earlier Cost Visibility
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The total cost of the project is apparent earlier with design-build. In traditional design-bid-build, construction costs are not known until bid opening, and it is possible to spend money (and time) on a design that the owner cannot afford to build. All too often, construction bids exceed the budget, and the project must be re-designed to bring it within the budget, thus delaying completion. With design-build, the contractor agrees to a price before the owner spends money on design or construction (except for bridging).
Design-build has the potential to reduce overall project cost because the design-build contractor performing the design has a better feel for the construction cost of alternatives and thus can come up with a design that is less expensive to build – and has an incentive to do so. Another way to look at this advantage is that it moves “value engineering” (or cost reduction incentive) from after contract award (with the contractor proposing cost-reduction ideas and sharing the savings with the owner) to pre-award (with the owner enjoying most of the cost savings).
Design-build may result in earlier completion and occupancy of the project because there is no dead time between completion of design and start of construction. Further, the design-build contractor can begin construction of early phases of the project (such as grading, site utilities, foundations) before design of later phases (building envelope, interior partitions, HVAC, electrical) is 100 percent complete. This process sometimes is referred to as “fast track.” Similar results can be achieved by agency construction manager and multiple-prime contracts – but at the expense of additional administrative burden.
Under traditional competitively bid design-bid-build, particularly on public projects, equipment or building system specifications must be generic in order to achieve competition. This makes it difficult for traditional design-bid-build to reach innovative, proprietary products – for which there may be only one manufacturer. Further, after-award substitution of a new product for a standard product often is impracticable because of the ripple effect. The designer has designed the project around current generation products, and substitution of new products after bidding can require revisions to structural, mechanical or electrical components to accommodate the new product. Who is going to pay for these ripple changes? Design-build resolves this problem. The designer-builder selects the equipment (right down to make and model number) and then designs the building around the selected equipment, which is a more logical way to proceed. In fact, the designer-builder sometimes can obtain free design assistance from equipment or building system manufacturers desiring that their new technologies be used.
Design-bid-build can suffer from sub-optimization when individual project participants optimize their own positions, often at the expense of the overall project. The total cost to the owner of a building element, such as the steel frame, includes the cost of the engineering to determine the required steel sections plus the cost of the steel. The designer has little incentive to use a sharp pencil to achieve the minimum amount of structural steel; he optimizes his own position by spending only the design time necessary to ensure that there is enough steel to meet gravity and seismic loads, often by employing conservative assumptions that may result in more steel than necessary. So, the owner often saves money on design but pays for it in steel.
With design-build, on the other hand, the designer-builder has an incentive to use the optimum amount of engineering. As long as an additional dollar of engineering will save more than one dollar’s worth of steel, the design-build contractor will spend the engineering time up to the point of diminishing returns when an additional dollar’s worth of engineering saves only a dollar’s worth of steel – because both the cost of design and the cost of steel come out of the same pocket.
This is not to say that design-build results in flimsy or less-safe structures. “More” (steel, concrete, etc.) is not necessarily “better.” Simply specifying extra steel or concrete in one place because the engineer does not have the time or incentive to calculate exactly how much actually is required does not improve the overall performance of the building. If the owner wants a building with higher floor loadings, less floor deflection or resistance to a bigger earthquake than required by code, then the way to achieve this is by placing that requirement on the designer-builder up front – not by hoping that the designer will throw in some extra steel or concrete because he or she does not have time in the budget to use a sharp pencil.
This advantage becomes even more pronounced in Design-Build-Operate-Maintain (“DBOM”) projects, where the private entity will bear the costs of operating and maintaining the facility. The private entity can be expected to put more money into construction when it will reduce operation and maintenance costs and vice-versa. For example, a private entity with a 35-year DBOM contract might opt for a slate roof that would last the full 35 years rather than an asphalt shingle roof, which it might have to replace twice during the life of the DBOM agreement. 1/
| 6. | Reduced Administrative Burden
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Design-build may reduce the administrative burden on the owner because there is one solicitation, one award and one contract to administer. On the other hand, design-build agreements are complex and may require more time and effort to execute than traditional design and construction contracts.
In the traditional design-bid-build approach, the owner warrants the correctness of the plans and specifications to the construction contractor under the Spearin Doctrine, United States v. Spearin, 248 U.S. 123 (1918). 2/ Thus, as between the owner and the construction contractor, the risk of defects in plans and specifications is allocated to the owner. Of course, by indemnification provisions in the owner-designer contract, the owner seeks to shift this risk to the designer. However, design professionals can obtain insurance coverage only for negligent errors and omissions, and virtually all design contracts limit the designer's liability to such.
Thus, under design-bid-build, there can be design mistakes for which the owner is liable to the construction contractor under the warranty of correctness, but the owner cannot transfer the liability on to the design professional. Even when the designer is in fact negligent, proving negligence can be difficult, often requiring expert testimony from another design professional that the designer failed to meet the applicable professional standard of care. On the other hand, the contractor usually can prove there was a defect in the plans that cost the contractor money based on fact testimony alone. Thus, the owner may be caught in this “gap” and have to bear the cost of the design defect.
Design-build potentially eliminates this gap because the designer-builder has no one but itself to blame for defective plans and specifications or differing site conditions. But see M.A. Mortenson Co., 93-3 BCA ¶26,189, No. 39,978 (ASBCA 1993), in which the design-build contractor recovered for extra costs incurred because of defects in information provided by the owner.
| D. | Potential Risks of Design-Build
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Under traditional design-bid-build, the owner has full control over the details of the plans and specifications and does not publish them for bids until it is satisfied that they reflect its functional requirements and aesthetic preferences. With design-build, the owner gives up some of this control, as the contract is awarded before the design is complete. This concern can be ameliorated by bridging, advancing the level of design through the design development stage (30 percent or so) before award of the design-build contract. By doing so the owner may give up some of the advantages of design-build. The Design-Build Institute of America position on bridging is that the initial proposal should include only minimal design detail. DBIA prefers the term “Schematic Design Documents” rather than “Preliminary Design Documents.”
This is the key balancing act for a successful design-build project. The design should be advanced far enough along to ensure that all of the owner’s “must have” features are incorporated into the contract but not so far as to take away the designer-builder’s freedom to design a cost-effective, constructible facility. Thus, if the owner insists on controlling every detail of the facility, it may be better off sticking to traditional design-bid-build. A possible hybrid is to fully design the architecture (floor plans, elevations, finishes) and then turn it over to a designer-builder to design the foundation, structure and MEP (mechanical, electrical, plumbing).
When entering into a fixed-price contract, the designer-builder probably will base its price on designing to minimum code requirements, which can lead to increased maintenance and operation costs in the future. If the owner wants more than minimum code requirements, it needs to call those out in the RFP or IFB. It may want to ask for pricing of alternatives.
Another option (on private projects and some public projects) is to ask for technical proposals and make the selection based on best value. That way, the owner can select the designer-builder that seems to best comprehend what is desired in the price/quality dichotomy.
| E. | When Design-Build May or May Not Be the Best Choice
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Design-build seems to be preferable to design-bid-build at both ends of the complexity spectrum. Simple, functional facilities such as parking structures and warehouses tend to be good candidates for design-build because there are excellent firms that have it down to an efficient, cookie-cutter approach. On the other hand, very complex structures that are difficult to construct also are good candidates because these are where the designers and the constructors tend not to see eye-to-eye. In the middle are projects such as one-off office buildings, where aesthetics may weigh against design-build.
| 2. | Sophistication and Stability of Owner
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Design-build works best with a sophisticated owner that understands what it is giving up (control) in return for lower cost and earlier completion. Also, design-build works best when the people who decided to use design-build will be around when the facility is completed. The horror story is new decision-makers who do not like what they see being built and demand changes late in the game.
| F. | Design-Build in the Public Sector
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The federal government generally has been receptive to design-build. In 1994, a coalition of design and construction industry associations met with the General Services Administration and the Army Corps of Engineers, resulting in passage of the Clinger-Cohen Act of 1996, which is codified at 41 USC §253m and implemented by Federal Acquisition Regulation (FAR) Subpart 36.3.
Clinger-Cohen calls for a two-phase procedure:
| | Phase One is open to all comers and deals with experience and technical competence.
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| | In Phase Two, a limited number of offerors (five or fewer) submit detailed concepts and pricing.
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Award is made based on price and other factors – but not necessarily the lowest-priced proposal – in accordance with evaluation factors set forth in the Request for Proposals.
The approach of state and local governments to design-build ranges from outright hostility to grudging acceptance.
A huge potential problem with state and local design-build contracts is that they may be declared void if there is no statutory authorization for using design-build or if the statutory procedural requirements are not followed.
The power of a public agency to contract is measured by the mode prescribed in the applicable law, and a contract made in disregard of the prescribed mode is void.
Thus, if a design-build contract is not made in accordance with the requirements of the governing state law, a court could find the contract void. When a court finds a contract void, it is void ab initio (from the beginning), not just prospectively. Thus, there can be no contractual recovery for anything either side has done. If the agreement is declared void, not only can neither side enforce it, but there is no implied liability on the part of the public entity for the reasonable value of services rendered.
| 3. | Construction Management Alternative
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Construction management provides an alternative to (or method of contracting for) design-build.
For example, California Government Code §4525 (California’s “Little Brooks Act”) requires that professional services for design or construction management on public projects be selected based on qualifications, then negotiation of a fair and reasonable price. Thus, agency (as opposed to at-risk) construction managers can be selected based on qualifications rather than low bid.
Large-scale projects can be procured under an agreement that the CM will have full responsibility for administration and management of the design and of all phases of construction for the project for a lump sum payable to the CM. The construction work is bid by the public entity with specifications and bid documents developed by the CM.
As part of the construction management agreement and to facilitate contract management, the CM may be assigned the contracts with the trade contractors. Whether the contracts are assigned or not, the CM manages the work of the trade contractors and payments to the trade contractors.
On a private project, compensation of the designer-builder can be either a single firm fixed price for the entire design-build scope, separate firm fixed prices for the design and construction phases or cost reimbursable (with or without a cap or GMAX) for either phase or the entire scope.
There is less flexibility in the compensation formula on public projects; statutes typically require firm fixed pricing or at least GMAX.
Under a fixed price contract, the contractor assumes all of the cost variation risk and reward. If the cost exceeds the contract price, the difference comes out of the contractor’s pocket. On the other hand, if the cost is less than the contract price, the contractor makes money – possibly a lot of money.
Under a cost-reimbursable contract, the owner assumes the risk (and reward) of cost variation. It the cost exceeds the estimate, the owner pays more, but if the cost is less than the estimate, the owner pays less.
GMAX is a hybrid under which the contractor is compensated on a cost-reimbursable basis – up to the guaranteed maximum price, after which additional costs come out of the contractor’s fee or out of its pocket.
Many owners view GMAX as the best of both worlds: if the cost exceeds the estimate, the difference comes out of the contractor’s pocket, but if the cost is less than the estimate, the owner gets the savings.
Sometimes this apparent inequity is mitigated by shared savings provisions under which the owner and the contractor split the savings, usually with the owner getting the majority.
The problem with GMAX is that it is a cost-reimbursable contract, which necessitates cost accounting and auditing to determine the “cost” of the project, and there are inevitable arguments over whether certain overhead expenses are chargeable to the project. These cost accounting, auditing and dispute resolution costs must be borne by the project.
In contrast, with fixed-price, contractor is paid for output (the completed project) rather than inputs (brick and mortar).
| 2. | Owner Approval of Plans
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A key pitfall is whether and to what extent the owner has the right to disapprove and require changes in the design. One of the keys to a successful design-build project is to let the designer-builder design the project. Excessive owner involvement in approving plans detracts from this advantage. However, the owner must monitor the project enough to ensure that it is getting a facility that will meet its functional requirements.
The extent of the owner’s involvement in design review and approval must be understood by both parties and incorporated into the contract. After the designer-builder has commenced construction based on its design is not the time for the owner to decide to review the plans.
| 3. | Owner Involvement in Subcontracting
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Owners often want the right to disapprove subcontractors, either on technical grounds or to further socio-economic (affirmative action, diversity, local preference) goals. The more the owner interferes with the designer-builder’s management of the project, the less will be the advantages over traditional design-bid-build. If the owner desires or is required by statute to meddle in subcontractor selection, that needs to be clearly spelled out in the contract.
| H. | Organization of the Design-Build Entity
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The choice of how to organize the designer-builder is influenced by licensing law and insurance and bonding considerations.
| 1. | Licensing Considerations
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While licensing laws vary from state to state, an entity that undertakes to build a facility often must have a contractor’s license. Thus, the design-build team often is led by a general contractor or at least the general contractor is the entity in privity of contract with the owner.
The designer-builder sometimes is viewed as a joint venture between a general contractor and a design firm. This does not work in jurisdictions, such as California, where each member of a joint venture must itself by a licensed contractor.
A state cannot require that contractors on federal projects hold state contractor’s licenses. Leslie Miller, Inc. v. Arkansas, 352 U.S. 187, 190, 77 S.Ct. 257 (1956). But, a federal agency can require by contract that a contractor hold a state license. So, requests for proposals and invitations for bids should be checked closely.
| 2. | Insurance and Bonding Considerations
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There are three major insurance policies on a traditional design-bid-build project:
| | Commercial General Liability (CGL), procured by the general contractor and each subcontractor, providing third-party coverage for personal injury and property damage.
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| | Errors and Omissions (E&O), procured by the design professionals, covering liability to the owner for negligent design errors and omissions.
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| | Builder’s Risk Insurance, procured by either the owner or the general contractor, covering damage to the facility being constructed.
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One approach to problems of gaps or overlaps is a project-specific controlled insurance program (CIP or wrap-up). Such policies can be procured either by the owner or the design-builder. When the owner procures the coverage, it is know as an owner controlled insurance program (OCIP). When the contractor buys the insurance, it is called a CCIP. These policies typically provide worker’s compensation, CGL, builder’s risk, auto liability and design E&O for all project participants. They have the potential to eliminate gaps and to provide cost savings by economies of scale and elimination of overlaps.
Performance bonds on design-bid-build projects typically are restricted to construction. On design-build projects, the surety may not be willing to extend coverage to include all of the design-builder’s performance obligations, including design.
| I. | Available Standard Design-Build Contract Forms
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If an owner has decided that design-build may be appropriate for a project, it needs to think about contract forms. It could use a manuscript (custom-prepared) contract or a standard form contract.
The advantage of a manuscript contract is flexibility; you can put in anything the other party will agree to. But, manuscript contracts cost lawyer or project manager time and money to prepare. A party receiving a draft manuscript contract must spend time reviewing it to understand it. There may be no judicial gloss interpretation of the terms of a manuscript contract.
The advantages of form contacts include lower cost. Most are not free; the sponsoring agency charges a fee to use them, but the fee is much less than the cost of starting with a blank sheet of paper. In addition, the other party may be familiar with the form contract, so it does not have to spend as much time reviewing it. Many of the provisions contained in the form contracts have been litigated, and there is case law interpreting them.
Public agencies will need to modify the standard forms to delete provisions that their jurisdiction prohibits and add provisions that their jurisdiction requires.
The standard forms include:
American Institute of Architects (AIA) A141-2004. This is a single contract for design and construction. It provides options for lump sum, cost-plus-fee or cost-plus-fee with GMAX. It includes Exhibits A (Terms and Conditions), B (Determination of the Cost of the Work) and C (Insurance and Bonds). Click here to purchase AIA forms.
ConsensusDOCS. The Associated General Contractors of America (AGC) and a number of other organizations representing owners, general contractors and specialty subcontractors have developed a comprehensive suite of “consensus” documents. “The organizations endorsing this document believe it represents a fair and reasonable consensus among the collaborating parties of allocation of risk and responsibilities in an effort to appropriately balance the critical interests and concerns of all project participants.” The ConsensusDOCS include:
| | ConsensusDOCS 410, Standard Design-Build Agreement and General Conditions Between Owner and Design-Builder (Where the Basis of Payment is the Cost of the Work Plus a Fee with a Guaranteed Maximum Price).
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| | ConsensusDOCS 415, Standard Design-Build Agreement and General Conditions Between Owner and Design-Builder (Where the Basis of Payment is a Lump Sum Based on an Owner’s Program Including Schematic Design Documents).
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| | ConsensusDOCS 420, Standard Agreement Between Design-Builder and Architect/Engineer for Design-Build Projects.
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| | ConsensusDOCS 421, Design-Builder’s Statement of Qualifications for a Specific Project.
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| | ConsensusDOCS 450, Standard Form of Agreement Between Design-Builder and Subcontractor.
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| | ConsensusDOCS 460, Standard Agreement Between Design-Builder and Design-Build Subcontractor (Where the Subcontractor Provides a Guaranteed Maximum Price).
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| | ConsensusDOCS 470, Design-Build Performance Bond (Where the Surety is Liable for the Design Costs of the Work).
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| | ConsensusDOCS 471, Design-Build Performance Bond (Where the Surety is NOT Liable for Design Services).
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| | ConsensusDOCS 472, Design-Build Payment Bond (Where the Surety is Liable for the Design Costs of the Work).
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| | ConsensusDOCS 473, Design-Build Payment Bond (Where the Surety is NOT Liable for Design Services).
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| | ConsensusDOCS 491, Design-Builder’s Application for Payment (Where the Basis of Payment of the Design-Build Agreement is the Cost of the Work and a GMP Has Been Established).
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| | ConsensusDOCS 492, Design-Builder’s Application for Payment (Where the Basis of Payment of the Design-Build Agreement is a Lump Sum).
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| | ConsensusDOCS 495, Design-Build Change Order (Where the Basis of Payment of the Design-Build Agreement is the Cost of Work Plus a Fee with a Guaranteed Maximum Price).
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| | ConsensusDOCS 496, Design-Build Change Order (Where the Basis of Payment of the Design-Build Agreement is a Lump Sum).
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Click here to access the ConsensusDOCS.
Design Build Institute of America. The DBIA forms include:
| | DBIA 520, Standard Form of Preliminary Agreement Between Owner and Design-Builder, an agreement under which the design-builder reviews the owner’s program and offers suggestions.
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| | DBIA 525, Standard Form of Agreement Between Owner and Design-Builder – Lump Sum.
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| | DBIA 530, Standard Form of Agreement Between Owner and Design-Builder – Cost Plus Fee with optional GMAX.
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Click here to access the DBIA forms.
There are several new initiatives that stress “collaboration.” Many people view contracting as a zero-sum game – where one party can profit only at the expense of the other party. An alternative to the zero-sum game is goal-congruent behavior, in which all participants focus on increasing the size of the pie rather than their individual slices. These new approaches have developed their own new lexicons.
| 1. | Integrated Project Delivery
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According to the AIA Guide:
Integrated Project Delivery (IDP) is a project delivery approach that integrates people, systems, business structures and practices into a process that collaboratively harnesses the talents and insight of all participants to optimize project results, increase value to the owner, reduce waste, and maximize efficiency through all phases of design, fabrication and construction.
IDP principles can be applied to a variety of contractual arrangements and IDP teams can include members well beyond the basic triad of owner, architect, and contractor. In all cases, integrated projects are uniquely distinguished by highly effective collaboration among the owner, the prime designer, and the prime contractor, commencing at early design and continuing through to project handover.
The IDP forms include:
| | AIA Document A195 - 2008, Standard Form of Agreement Between Owner and Contractor for Integrated Project Delivery.
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| | Exhibit A to AIA Document A195 - 2008, Guaranteed Maximum Price Amendment.
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| | AIA Document A295 – 2008, General Conditions of the Contract for Integrated Project Delivery.
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The AIA General Conditions state:
The Owner, Architect and Contractor have agreed to plan, design, and construct the Project in a collaborative environment following the principles of Integrated Project Delivery and to utilize Building Information Modeling to maximize the use of their knowledge, skills, and services for the benefit of the Project.
However, Standard Form of Agreement is between the owner and the contractor only.
IDP is more about team-building and less about project delivery models and contract forms. Indeed, the Guide discusses application of IDP to multi-prime, construction manager at risk, design-build and design-bid-build projects. Nevertheless, IDP principles appear to be a good fit with design-build project delivery methodology.
The Guide is an excellent resource and can be downloaded for free from www.aia.org.
Lean Construction is a “philosophy” based on application in the construction industry of manufacturing concepts developed by Toyota. The Lean Construction Institute is the proponent of lean construction. LCI has a proposed standard contract called the “Integrated Agreement for Lean Project Delivery.” This is a single contract among the owner, architect and construction manager or general contractor. Lean Construction attempts to reverse the separation of design from construction and return to the master-builder concept.
Lean Construction stresses early collaboration among the three primary project participants, owner, architect and CM/GC, with the addition of subcontractors and other participants as they are selected. In addition, Lean Construction advocates a bottom-up approach to scheduling and quality issues rather than traditional top-down dictates.
The two pillars of the Toyota system were self-regulation (shutting down production rather than producing defective product) and just-in-time delivery: succeeding activities “pull” work-in-progress from preceding activities rather than preceding activities pushing succeeding activities. Thus, a pull system requires defect-free output from the preceding activity. In construction, the item flowing on the project is the work that is completed by one trade and delivered to the next trade.
The lean project delivery system incorporates five “Big Ideas”:
| | Collaborate, Really Collaborate. This is the antithesis of today’s prevalent arrangement in which the designers design pretty much in a vacuum and then hand over a set of 100 percent plans for the constructors to build. This acknowledges that the choice of ends affects means and available means affect ends.
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| | Increase relatedness among all project participants. This is in contrast to single-project relationships in which the designers hope to never have to deal with the constructors again and vice versa. What is needed is longer-term relationships, but this is easier said than done.
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| | Projects are networks of commitments. To improve chances of success, a project should be viewed as an assemblage of commitments among the project participants.
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| | Optimize the project, not the pieces. This is similar to the basic design-build advantage of over-all optimization rather than sub-optimization. Optimize the project – not the pieces.
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| | Tightly couple action with learning. This emphasizes feedback and moving up the learning curve.
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| 3. | Building Information Modeling (BIM)
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A key precept of the Toyota production system is the elimination of defects that would stop the production line or result in a substandard product. Interferences are the analogous defect in construction. Building Information Modeling or 3D Modeling incorporate computer tools to identify and correct interferences during the design phase rather than during the construction phase, thus reducing waste of time, motion and material during both the design and construction phases of the project. The AIA’s Integrated Project Delivery System also incorporates Building Information Modeling.
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ENDNOTES
| 1/ | For a discussion of design-build as it relates to DBOMs and other Public-Private-Partnerships (“PPPs”), click here.
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| 2/ | Spearin was a federal government procurement case. See, Bednar, Construction Contracting, pp.429a-f (George Washington University 1991) for a list of state cases accepting the Spearin doctrine.
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