Planning and Defining the Design-Build Procurement Process - Design-Build for Water and Wastewater Projects - page 99

Owners are advised to limit the short list to three to five design-builder proposers.
It is likely that the owner will receive the benefit of good competition from this number
of proposers, while limiting the resources that are needed to review subsequent propos-
als. In addition, the proposing community appreciates that the probability of capture
increases with a limited short list. Proposers included on a small short list, therefore, are
inclined to be motivated to compete aggressively, and this will yield maximum innovation
and related cost savings for the owner to consider.
The RFP Process
Writing an RFP for a DB project can be a complicated process. Larger projects can have
performance, cost, and schedule risks that must be considered throughout the contrac-
tor procurement process, especially during the proposal phase. Managing project risk is
critically important to successfully complete DB projects. The RFP is central to describ-
ing and implementing the owner's risk management strategy for the project. Additional
information on the RFP can be found in chapter 15.
Risk management. The RFP must address the owner's technical, commercial, and
legal requirements for the project so that risk can be managed. Some of the types of risk
issues that are typically addressed in a DB RFP are as follows:
• Site and subsurface conditions
• Permits and approvals
• Commodity price volatility
• Work stoppages
• Limitation on liability
• Reliance on owner-supplied information
• Required security instruments
• Post-acceptance warranty
• Schedule
• Construction costs and operations and maintenance (O&M) costs
• Force majeure
• Changes in law
• Technology selection and performance of assets
• Future maintenance considerations
• Future capital requirements (if long-term performance guarantees are included
in the DB contract)
The owner's objectives for managing risk must be understood and documented for
each identified risk. After evaluating the range of risk allocation alternatives and deter-
mining the consequences of each risk, the owner is then prepared to describe its risk
management strategy in the RFP. The roles and responsibilities of the owner and design-
builder for allocating and managing each risk must be detailed in the RFP and related
project documents, including the DB contract. Risk allocation must be aligned with the
owner's overall project objectives. If, for example, the owner elects to maintain responsi-
bility for obtaining certain permits, the owner would also be accepting the schedule risk