Design-Build Contract Risk Allocation - Design-Build for Water and Wastewater Projects - page 111

statement, to identify incomplete design elements and to set forth in narrative form the
owner's statement of intended scope with respect to the incomplete elements.
Next, the owner and the design-builder should establish a very structured process
for finally establishing the GMP. The design-builder should first submit a GMP proposal
along with an accompanying set of qualifications and assumptions. These qualifications
and assumptions should detail the specific conditions the builder has made with respect
to various components of the design. Following submission of the GMP proposal, the
owner and its consultants should meet with the design-builder to reconcile any questions,
discrepancies, or disagreements relating to the design development documents, techni-
cal statement, or the GMP proposal and accompanying qualifications and assumptions.
Once these conflicts and disagreements have been reconciled, the GMP can be finalized.
The design-builder and owner should attach to the GMP proposal all the documents and
contract terms that form the basis of the design-builder's GMP.
Defining the Standard of Care
The design-builder's scope of work requires it to assume responsibility for both the design
and construction of the project. Thus, the owner and design-builder need to discuss and
ultimately agree on the standards by which design and construction deficiencies are
measured.
The parties employing the DB delivery model will address construction deficiencies
in the same manner they address construction deficiencies when employing DBB. Con-
struction deficiencies will be found when the work fails to conform to the project's plans
and specifications. Typically, the design-builder agrees to provide all new material and
equipment of good quality and in conformance with the contract documents. Moreover,
the design-builder warrants that its work will be free of defects and to correct all defective
work for a period of one year from the date of substantial completion of the work.
Perhaps, the more interesting and challenging issue the parties need to address is
determining the standard of care by which to judge the design-builder's design responsi-
bilities. The design-builder's standard of care in the absence of a stricter or higher stan-
dard of care imposed by contract is the common law professional standard of care. Under
this standard, a design is measured against the professional negligence standard, whereby
a design professional can be found liable for its errors and omissions only if it fails to
perform in accordance with the professional negligence standard of care applicable to all
similarly situated design professionals in the community.
Owners of water and wastewater facilities must ask themselves whether the tradi-
tional negligence standard of care is sufficient to protect their interests or whether they
need to impose a stricter or higher standard of care, which if breached, would impose
liability on a design even when the design had not breached the common law standard
of care. For example, owners of waste and wastewater treatment facilities have to achieve
mandated quality levels. Thus, it does the owners little good if the design professional
develops a design while not negligent nevertheless fails to achieve the owner's desired
results.
It is critical for the owner to clearly specify the performance standards that must be
satisfied and to further ensure these standards are capable of objective measurements.
The design-builder has to carefully study these standards and determine the feasibility