Design-Build Procurement Approaches - Design-Build for Water and Wastewater Projects - page 66

• Obtain acceptable contract terms that meet the owner's project objectives and
requirements, with acceptable risk allocation and sharing
The most desirable procurement approach will allow the owner to enter into a mutu-
ally beneficial agreement with the design-builder. To achieve these goals, owners should
understand each procurement approach and recognize the drivers or incentives that are
inherent in each.
DESCRIPTION OF PROCUREMENT APPROACHES
In general, there are five basic procurement approaches: direct negotiation, qualifications-
based selection, best-value selection, progressive design-build, and price-based selection as
described in the following paragraphs. These are summarized in Table 7-1 and described
in more detail herein. There is no single or “right” procurement method for DB projects.
Owners must tailor the selection process to what best fits the needs of their project.
Direct Negotiation
Owners that have a trusted relationship and prior experience with a design-builder may
elect to enter into direct negotiations, sometimes referred to as sole source , with that
design-builder. Such an approach is advisable if the owner has had a previous successful
relationship with the design-builder for other projects and if direct negotiation is allowed
by applicable law. Public owners are usually precluded from this approach due to state
procurement laws. Private owners utilize this method as needed.
Qualifications-Based Selection
The QBS approach focuses on the selection of a DB entity being based on qualifications
rather than price. The price for design and construction of the project is not a part of the
selection. The owner issues an RFQ and upon receipt of the Statement of Qualifications
(SOQs), evaluates and ranks the SOQs. The owner selects the top-ranked design-builder
and enters into contract negotiations, or the owner can issue an RFP to a short list of
design-builders and request technical approach and personnel information. The impor-
tance of qualifications is described in the DBIA Position Statement “The Role of Qualifi-
cations in Selection of a Design-Builder” (DBIA 2010a).
Should negotiations fail, then the second highest ranked design-builder is selected
and negotiations begin. Owners may also choose to request technical details about the
project and solicit comments from the proposers. As discussed in chapter 14, it is recom-
mended to include a discussion of the risk posture (i.e., the draft agreement) for the proj-
ect in the RFQ. State laws should also be checked, because many states do not allow QBS
of a design-builder.
An owner receives the benefits of competitive pricing using QBS as the guaranteed
maximum price (GMP) is developed. With this approach, all or the majority of the con-
struction work can be priced competitively in the open marketplace. At a predetermined
percent of design completion (e.g., 60 percent), the design-builder will provide the owner
with a GMP. After the GMP is negotiated and accepted by the owner, the design-builder