Preparing an Owner Organization to Perform Design-Build - Design-Build for Water and Wastewater Projects - page 58

a design-construction project solution. DBB is a construction-based, linear, and commodity-
driven approach to build a predetermined design solution. As a result of these differences,
the following myths exist and should be more thoroughly understood by owners.
My th #1 — More Competitors for the Design-Build Project Are Better
While it is advantageous for the owner to have a high level of interest from design-
builders to compete for the project in the initial RFQ or RFP step, it is beneficial to limit,
by short-listing, the invited proposers to three to five of the best qualified design-builders.
It is desirable to short-list only the best three proposers, unless there are one or two more
that are just as qualified as the top three. These short-listed firms can be interviewed to
select a design-builder on the basis of qualifications or to request final technical and price
proposals in response to an RFP. The owner should make a final selection from the best
qualified teams; more than three to five “best” competitors might dilute the quality of the
short list. In addition, because the investment for a competitive DB proposal is five to ten
times more than for a traditional proposal, competitors will only be inclined to respond if
they know they have a favorable probability of being selected.
Myth #2 — The Owner's Standard Construction Contract
Can Be Appropriately Modified for Design-Build
Attempting to convert the owner's standard construction contract to a DB contract
creates a very ineffective contract document. The contracting principles, single-source
responsibility for design and construction, roles and responsibilities, and execution pro-
cesses are dramatically different for DB and do not fit within the context of a traditional
construction contract. It is highly advisable to begin with a standard DB contract, which
is available from DBIA as well as other sources, and incorporate the owner's standard
requirements for public contracting, such as small business issues, ordinances for compli-
ance, local permits, and other local design and construction requirements.
Myth #3 — The Owner Can Successfully Shift All Risk to the
Design-Builder Because There Is Single-Source Responsibility
Fair risk allocation is typically a predictor of the success of a DB project. Any risk that is
assigned unfairly or unreasonably to the design-builder, such that the design-builder can-
not manage that risk, will result in resistance from the surety bonding company, as well as
from the design-builders. The design-builder clearly has project integration risk for design
and construction, so unless the owner stipulates certain means and methods, the design-
builder must manage all that related risk.
Unreasonable risk allocation for items where the design-builder is not in a position
to manage certain risks can cause firms to decide to not compete for the project. In addi-
tion, some owners have experienced high legal costs for revising and/or negotiating those
risks after project award without added benefit. Owners are more likely to achieve their
objectives through fair risk allocation that assigns risk to the party that can best control a
specific risk rather than through allocating all risks to the design-builder.