Categories: Contract Delivery, Design Bid Build, Design Build, Division 1 Specifications, General Terms and Conditions, Information For Bidders, Invitation For Bid, Project Management Plan, Risk Management Plan
After the Buyer’s organization determines project execution will use the Design-Build contract delivery method, the Project Management Office (PMO) will undertake changes to transition from the more traditional Design-Bid Build processes, procedures and best practices.
Many of the changes in the Buyer’s organization and PMO were highlighted in the October 2017 article “Are You Ready for Design Build Project Delivery Method for Rail Transit Projects?” https://www.projectmanagement.com/discussion-topic/73079/Are-You-Ready-for-Design-Build-Project-Delivery-Method-on-Rail-Transit-Projects.
This article expands on the TIPs regarding changes to contract content.
Traditionally, design and deliverables for construction contract documents are completed under a service contract with an Architecture/Engineering (A/E) firm. The acquisition process for design service contract typically uses a Request For Proposal (RFP) process. The Buyer’s process evaluates the Sellers technical proposals before negotiating cost to award a contract. Depending on the domain of the Buyer, the award process from the time of publishing an RFP to award can range from 4 months to 9 months. The contract duration for preparing designs and deliverables can range from 6 months to 18 months.
Typically, the contract documents are then bid for a firm price by a contractor to complete the construction. The acquisition process for construction contracts uses an Invitation For Bid (IFB) process. The Buyer’s process evaluates the responsive and reasonable bid from the Seller with the lowest price. Depending on the domain of the Buyer, the award process from the time of publishing an RFP to award can range from 2 months to 6 months.
Under DB delivery, a partial design document is used to develop the requirements for the construction contract. This eliminates the project duration for completing the design to100% and saves time to starting construction. This schedule benefit is achieved by having the construction contractor team with an A/E firm to complete the remaining design as construction proceeds concurrently.
As a result, the standard contract needs to integrate design scope and deliverables into the construction contract requirements. While there are various DB Models available, this article presents changes used in the rail-transit domain for converting the traditional construction contract into DB contract by integrating design requirements into Information for Bidders, General Terms and Conditions, and Division 1 Specifications.
For a recent rail-transit contract, here are the changes to the BDD contract Model that were implemented to create a DB contract:
Information for Bidders (InfoFB)
- Add technical proposal requirement for Written Work Plans and Manpower Plans for managing design resources and subject matter experts throughout the contract. This incorporates Plans that are normally part of design service consultant contracts.
- Add technical proposal requirements for statement on Risk Management approach throughout the contract, and a preliminary Risk Register, which will be monitored and managed by the DB contractor. The Risk Management will follow the standards and best practices in Project Managements Institute (PMI) guides and practice standards. This requirement is recommended by Design Build Institute of America (DBIA).
- Add cost proposal requirements for identifying funding allocations in the proposed contract pricing that is assigned to mitigate and respond to risks identified in the proposal. The funding allocations will establish a basis for the Buyer and Seller to manage risks after contract award through contract completion. This requirement is recommended by DBIA.
General Terms and Conditions (GT/C)
- Add new Article for Risk Management, which incorporates the requirements for managing risks throughout the contract. This incorporates identifying risks, defining risk trigger metrics and threshold, monitoring process, mitigating actions and responding to triggered risks. This requirement is recommended by DBIA.
Division 1 Specifications
- Add description of design scope into Summary of Work. This incorporates the technical description of design activities normally detailed in the design services consultant contracts. In conjunction with Performance Milestones, the design and deliverables will be defined, such 60% Design, 90% Design and 100% Design.
- Add requirements for design review meeting into Meetings, the including discussion topics and deliverables. This incorporates the technical description of design review meetings normally detailed in the design services consultant contracts.
- Add requirements for design documents into Submittals. This incorporates the technical description of design deliverables normally detailed in the design services consultant contracts, including content and organization, and the requirements for addressing comments on predecessor design deliverables.
- Add new Project Management Section, including requirements for Project Management Plan, including interdependency with Risk Management Plan cited in InfoFB and GC/T. This incorporates the description of the contractor’s management of personnel, processes and schedule of all design and construction activities, which is normally associated with design services consultant contracts. This requirement is recommended by DBIA and Project Management Institute (PMI).
TIP: Adapting BD requirements to the Buyer’s existing DBB contract Model should be less intrusive to developing a new DB contract Model.
Henry Hattenrath is an experienced project/program management leader and consultant on rail transit capital projects, and he is a frequent contributor on Project Management.com and LinkedIn.com.