Engaging a DB Consultant for Design-Build Projects - Design-Build for Water and Wastewater Projects - page 125

specifications with the contract's terms and conditions. Successful risk allocation also
requires that certain uncontrollable risks associated with the project remain with the
owner, rather than be transferred to the design-builder.
Procurement. Perhaps the most different and least appreciated aspect of a DB project
is the amount of work that is needed to develop the procurement documents. The main
difficulty is that owners are presented with the sometimes daunting task of having to
determine what they want from the project before any significant design is performed.
Consequently, the DB project conceptualization process is markedly different and
unfamiliar to public owners without prior DB experience, and developing procurement
documents that accurately reflect the owner's needs can be challenging.
The main DB procurement issues for the owner's project team are: (1) the permit-
ting approach; (2) risk allocation and project risk management techniques; and (3) the
required design criteria, performance requirements, and technical specifications. For
each owner, the federal, state, and local regulators will have specific laws and regulations
related to these permitting issues. Sometimes, a water or wastewater industry project may
only require one or two state permits. Often, however, projects require dozens of permits
and approvals, ranging in complexity from local construction permits to more complex
compliance-related environmental requirements. Additionally, some of the permitting
agency rules or polices have prerequisites of 100 percent complete design plans. Other
permits are issued on a conceptual basis for a project, with subsequent approvals being
required at later stages of the project or upon completion.
These permitting requirements and procedural matters need careful consideration
by the owner's procurement team to maximize the benefits of a DB project delivery, while
also avoiding unanticipated delays or expense. For many DB projects, a permitting agency
outreach effort is one of the frequently overlooked and undervalued project consider-
ations. Chapter 22 includes more information about typical permits used for water and
wastewater projects.
The owner's project team must also consider the project's risks and the desired risk
allocation, and this type of risk analysis typically is not familiar to public owners. Suc-
cessful risk allocation and management require skillful alignment of the performance
and technical specifications with the contract terms and conditions. A good practice is to
prepare an inventory of the project's risks for discussion with the owner's project team and
stakeholders. This inventory serves as the basis for an initial project risk matrix, which
identifies the specific project risks, the proposed allocation of the risk, and the industry
standard for the management and allocation of that risk.
Common categories for project risks are: (1) design; (2) construction/commissioning;
(3) environmental; (4) raw and finished product constraints; (5) taxation; (6) financing/
economic; (7) industrial relations; (8) O&M; and (9) natural disasters. During develop-
ment of risk allocation for a DB project, these categories are populated with specific risk
elements, such as permitting risk, subsurface conditions, preexisting conditions, as-is risk,
technology selection, and maintaining operations. Once the project risks are identified, an
owner can determine the best way to manage each risk: options range from complete risk
aversion to full acceptance and acknowledged management responsibility for the individ-
ual risk. After the risk management options are selected by the owner, a final risk matrix
can be developed. This represents the basis on which to prepare the draft contract terms