Design-Build-Operate - Design-Build for Water and Wastewater Projects - page 313

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Design-Build-Operate
Patrick E. Gallagher, JD, Camp Dresser & McKee Inc.
INTRODUCTION
Adding operation and maintenance to the DB contractor's responsibilities is referred to as
design-build-operate (DBO), and it expands the DB method to include life-cycle account-
ability for water and wastewater projects. Unlike DB, where the owner takes over opera-
tion and maintenance on completion of design and construction, the DBO contractor
operates and maintains the project for an operating period that is typically 15 to 20 years.
This long-term responsibility for operation and maintenance serves as an incentive for
the DB contractor to achieve life-cycle cost efficiencies, both during the procurement
process and during execution of the project. These cost-efficiencies are realized largely
through its control over the design decisions, which often involve trade-offs between capi-
tal investment and operating costs. Given the broad scope of contracted services for a
DBO project, the owner necessarily places a high degree of reliance on the DB contractor
for successful performance of the water or wastewater project.
This chapter includes a discussion of DBO versus DB, and a summary of two DBO
case studies.
A COMPARISON OF DESIGN-BUILD-OPERATE
TO DESIGN-BUILD PROJECT DELIVERY
DBO can be used by private or public owners. Private owners have more flexibility in
making operation-related services decisions. The single-most important factor for many
public municipalities that consider DBO as a project delivery option, however, is the pol-
icy question of whether an essential service, such as the operation of water or wastewa-
ter facilities, should be provided by an outside contractor or by municipal employees.
This issue is evaluated in parallel with the cost-effectiveness of the operation alterna-
tives. Where existing water or wastewater facilities are operated effectively by municipal
employees or where municipal officials have concerns with a potential misalignment of
interests of the municipality and an outside contract operator, the DBO project delivery
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