Design-Build Contract Risk Allocation - Design-Build for Water and Wastewater Projects - page 105

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Design-Build
Contract Risk Allocation
Bennett D. Greenberg, Esquire, DBIA, Seyfarth Shaw LLP
INTRODUCTION
The DBB project delivery model is the most widely used project delivery model in the
water and wastewater industry throughout the United States. The DBB delivery model
expects that the owner will contract separately with a design professional for design ser-
vices and then execute a contract with a contractor (or construction manager) for con-
struction of the project. Typically, the design has to be fully completed before it is bid to
the lowest responsible bidder, which then proceeds with construction.
Owners use the DBB delivery model because of their familiarity with the contract-
ing process, their ability to maintain a level of control over the design process, and the
ability to drive project costs down through competitive bidding. The inherent problem
with DBB is the tension created between the design professional and the contractor. This
is particularly acute when the time for developing the design has been compressed and
the contractor has been selected solely on the basis of price. Whatever the source of the
tension, one thing is clear: the owner is contractually caught in the middle and left to deal
with the claims for additional costs and time extensions.
Another disadvantage of the DBB delivery model is that project cost certainty cannot
be established until after the design is one hundred percent complete and the contractor
provides a lump sum bid. Thus, this leaves limited opportunity to reduce project costs
by modifying the design if project bids come in higher than expected, not to mention
increasing the time lost bringing water and wastewater plants into service.
In response to these limitations of DBB contracting, waste and wastewater authori-
ties are now looking at the DB delivery model. Single-point responsibility, which is the
cornerstone of DB contracting, creates certain advantages and makes it a logical vehicle
for construction of water and wastewater projects for a number of reasons.
First, owners are looking for one entity to assume the risk of designing and con-
structing these projects on time and on budget. Single-point responsibility requires the
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