Design-Build Contract Risk Allocation - Design-Build for Water and Wastewater Projects - page 108

the owner for both design and construction of a project. Lastly, an integrated DB firm
notwithstanding the fact that it may subcontract certain design and construction services
will be legally liable for both the design and construction of the project.
Moreover, individual members of a design-builder that presents itself as a joint ven-
ture will be jointly and severally liable for the debts and obligations of the joint venture.
Thus, if one member of the joint venture cannot satisfy its share of a liability the joint ven-
ture incurs, the other member of the joint entity is responsible for satisfying that liability
in full. Accordingly, each member of the DB joint venture must recognize that it will be
responsible for the acts, breaches, and omissions of its joint venture partner. Firms joining
forces for a water or wastewater project must ensure that they have not only compatible
cultural and business values but also sufficient financial resources to permit each party to
fulfill its obligations to the owner and each other as well.
Selecting the Appropriate Procurement Methodology
Regardless of the project delivery system, a procurement methodology that permits the
owner to select a design-builder based on a combination of qualifications and price, as
opposed to low price alone, is more likely to result in the selection of a design-builder that
is competitive cost-wise and possesses the necessary qualifications and expertise to com-
plete the project on time and on budget.
An owner desiring to employ the DB delivery system must be mindful of public
contracting laws that mandate a selection procedure based on low price alone, or in some
cases, may even go so far to preclude the use of DB delivery. A procurement method based
on price alone creates a real risk that the benefits of the DB process will not be realized,
as these benefits are in large part tied to the experience and qualifications of the design-
builder. Accordingly, depending on the jurisdiction, owners may have to pass legislation
or amend existing procurement regulations to permit a best-value selection methodol-
ogy. For example, the District of Columbia enacted legislation authorizing the Conven-
tion Center Authority to employ a best-value procurement methodology (D.C. Municipal
Regulations 2001). This methodology provides an owner with the necessary flexibility to
select the most qualified DB team offering a competitive price, even if it is not necessarily
the lowest price.
Design-builders must also be sensitive to the procurement constraints that applicable
legislation may place on them. Design-builders are taking certain risks that have such
firms committing to deliver these projects on time and on budget. A procurement system
that forces selection of the low bidder for trade contractor packages can have disastrous
consequences if the low bidder is not also the best qualified bidder. Design-builders, like
many owners, are often prepared to pay more if the somewhat higher price gets them the
best qualified trade contractor that can complete its work on budget and without delaying
other contractors on the project.
Defining the Project Scope
The fear that the design-builder may cut corners in the design is often exacerbated by the
owner's requirements that the design-builder commit to a firm price based on incomplete
design information. The dilemma that must successfully be addressed regarding these