To get the best results on a design-build project, the owner’s role is as important as that of the design-builder. View this Slideshare to discover six areas where an owner’s early involvement is critical to realize ultimate success.
Learn more about progressive design-build models for water and wastewater project delivery, and get information about a new initiative by the Water Design-Build Council to create model procurement documents for these projects. Presentation by John Awezec of HDR, Inc., John Doller of Carollo Engineers, and Peter Hughes of the Water Design Build Council.
Design build risks and rewards for public ownerJon Straw
This document discusses the risks and rewards of design-build (D-B) contracting for public owners. It outlines several potential benefits of D-B over design-bid-build, including early cost guarantees, time savings, and single entity responsibility. However, it also notes legal and practical risks, such as transferring unknown site risks to the contractor. The document provides an overview of different D-B entity structures and best practices for owner oversight and qualifications-based selection processes. It also summarizes several state and local design-build enabling laws and ordinances.
The document discusses the design-build approach for construction projects. It outlines the team structures for the proposal, design, and construction phases. The design-build process involves preliminary design and planning, detailed design work to develop a guaranteed maximum price (GMP), implementation including permitting and construction, and project completion. Key advantages of the design-build approach are obtaining a firm price earlier and cost savings through integrated design and construction efforts.
This document defines a contract and outlines key concepts in contract law including offer and acceptance, consideration, duties and enforcement, and defenses. It explains that a contract is a legally binding promise, and covers topics such as what constitutes a valid offer, how acceptance forms a contract, the need for consideration on both sides, the concept of substantial performance of duties, remedies for breach such as damages and specific performance, and defenses that can make a contract void like unconscionability, fraud, duress, and illegality.
Types of contract in Project managementAli Heydari
The document discusses different types of contracts that may be used in project management. It describes fixed price/lump sum contracts where a specific deliverable is agreed to for a set price, carrying more risk for the seller. Cost-reimbursable contracts reimburse the seller for all allowable costs and come in forms like cost plus fee or cost plus fixed fee. Time and materials contracts bill the buyer based on hours worked and materials used by the seller.
There are several types of contracts:
1. A valid contract is enforceable by law when all essential elements are present.
2. A voidable contract can be voided when consent is not free, such as under threat.
3. A void contract has no legal effect.
Contracts can also be express (verbal or written), implied (based on actions), quasi (not by agreement but recognized by law), executed (both parties fulfilled obligations), or executory (obligations still need to be performed).
To get the best results on a design-build project, the owner’s role is as important as that of the design-builder. View this Slideshare to discover six areas where an owner’s early involvement is critical to realize ultimate success.
Learn more about progressive design-build models for water and wastewater project delivery, and get information about a new initiative by the Water Design-Build Council to create model procurement documents for these projects. Presentation by John Awezec of HDR, Inc., John Doller of Carollo Engineers, and Peter Hughes of the Water Design Build Council.
Design build risks and rewards for public ownerJon Straw
This document discusses the risks and rewards of design-build (D-B) contracting for public owners. It outlines several potential benefits of D-B over design-bid-build, including early cost guarantees, time savings, and single entity responsibility. However, it also notes legal and practical risks, such as transferring unknown site risks to the contractor. The document provides an overview of different D-B entity structures and best practices for owner oversight and qualifications-based selection processes. It also summarizes several state and local design-build enabling laws and ordinances.
The document discusses the design-build approach for construction projects. It outlines the team structures for the proposal, design, and construction phases. The design-build process involves preliminary design and planning, detailed design work to develop a guaranteed maximum price (GMP), implementation including permitting and construction, and project completion. Key advantages of the design-build approach are obtaining a firm price earlier and cost savings through integrated design and construction efforts.
This document defines a contract and outlines key concepts in contract law including offer and acceptance, consideration, duties and enforcement, and defenses. It explains that a contract is a legally binding promise, and covers topics such as what constitutes a valid offer, how acceptance forms a contract, the need for consideration on both sides, the concept of substantial performance of duties, remedies for breach such as damages and specific performance, and defenses that can make a contract void like unconscionability, fraud, duress, and illegality.
Types of contract in Project managementAli Heydari
The document discusses different types of contracts that may be used in project management. It describes fixed price/lump sum contracts where a specific deliverable is agreed to for a set price, carrying more risk for the seller. Cost-reimbursable contracts reimburse the seller for all allowable costs and come in forms like cost plus fee or cost plus fixed fee. Time and materials contracts bill the buyer based on hours worked and materials used by the seller.
There are several types of contracts:
1. A valid contract is enforceable by law when all essential elements are present.
2. A voidable contract can be voided when consent is not free, such as under threat.
3. A void contract has no legal effect.
Contracts can also be express (verbal or written), implied (based on actions), quasi (not by agreement but recognized by law), executed (both parties fulfilled obligations), or executory (obligations still need to be performed).
Aba div 4_swann_design_build_standard_of_care_2014_05_27Roland_Nikles
This document discusses standards of care in design-build projects. It describes a project where a government agency issued a design-build RFP for a project with only 30% complete documents. A contractor hired a design firm with prior experience with the agency to assist with bidding. Issues arose during construction as the design was not fully developed. This led to questions about which standard of care applies and who bears responsibility for incomplete information. The presentation examines responsibilities of designers and contractors in design-build projects.
Risks & Advantages of P3 Projects by Sid Scott, Hill InternationalRoland_Nikles
Provides overview of the current status (March 2014) of public/private partnerships for development of horizontal and vertical infrastructure in the United States.
This document summarizes a study that compared the performance of projects delivered using Integrated Project Delivery (IPD) to other delivery methods such as Construction Manager at Risk, Design-Build, and Design-Bid-Build. The study analyzed 35 projects across nine performance areas including cost, quality, schedule, safety, changes, communication, labor, environment, and business performance. The results showed that IPD projects displayed superior performance in 14 different metrics across six of the nine performance areas. Specifically, IPD delivered higher quality projects faster at no significant cost premium. The conclusion was that if the statistical analysis criteria was relaxed, IPD would have shown superior performance in even more metrics and performance areas.
Aba division 4 presentation outside consultants handling of change orders (8 ...Roland_Nikles
The document discusses competing methods for analyzing project change orders, specifically whether owners should rely on the designer/construction manager or hire an independent consultant. It notes advantages and disadvantages of both approaches. Relying on designer/CM provides familiarity but they may not address risks adequately due to self-interest or desire to avoid blame. An independent consultant provides an objective perspective and expertise in risk management, but costs more due to set-up. There are valid arguments on both sides, and the best approach depends on the owner's resources and project specifics. The document aims to help owners evaluate which method may be most suitable for their needs.
Ashrae denver business project development and ipd_ springerRoland_Nikles
The document discusses integrated project delivery (IPD) and how project development risk and cost of capital influence the choice between IPD and traditional delivery models. It notes that while IPD can create value through early design decisions as shown in the MacLearny curve, investing early in development carries high risk that the value may not be realized due to market, entitlement, financing and other risks. This makes the cost of capital steeper in early development stages. Owners with higher development risk tolerance due to their business model or financing approach will prefer IPD, while others facing steeper cost of capital slopes will prefer traditional models. The key is understanding how development risk and value drivers shape the cost of capital over time for any given project
This document provides an overview of risks in engineering, procurement, and construction (EPC) contracts and techniques for mitigating those risks. It discusses major categories of project risks for EPC contracts, including construction, financial, geographical, contractual, and project management risks. Case studies are presented to illustrate examples of risks in areas like contractor expertise, payment issues, force majeure events, and project staffing. The document concludes by outlining contractual provisions and project management strategies that owners and contractors can use to mitigate risks in EPC projects.
The document discusses strategies for contractors to maximize profits on cost plus contracts through billing practices related to labor rates, equipment rates, overhead allocation, and self-performed work. It provides examples of how contractors can build profits into their billing rates and recommends contract language to define billing terms and limit hidden profit margins. The document also overview Veritas Advisory Group, a construction consulting firm that assists with dispute resolution through cost and schedule analysis.
This document discusses how sustainability planning can benefit building projects and clients. It defines sustainability as meeting present needs without compromising future generations' ability to do the same. A sustainability plan establishes long-term priorities and goals, identifies opportunities and challenges, and engages partners. For clients, sustainability planning provides knowledge of broader sustainability concepts, defined goals and priorities to guide decision-making, and clear communication of expectations to partners.
Aba forum division_4_aurora_light_rail_presentation_shresta_2012_11_27Roland_Nikles
The document provides an update on the status of the FasTracks transit expansion plan in the Denver region. It summarizes that 81 miles of new rail and bus rapid transit lines are currently under construction, with $4.7 billion invested by 2017. It also describes funding sources such as federal grants and loans that are supporting projects like the Eagle P3 commuter rail line between Denver and Denver International Airport. Construction is progressing on lines like the West Rail Line, East Rail Line of the Eagle P3 project, and the new I-225 rail line to Aurora.
Aba div 4_swann_design_build_standard_of_care_2014_05_27Roland_Nikles
This document discusses standards of care in design-build projects. It describes a project where a government agency issued a design-build RFP for a project with only 30% complete documents. A contractor hired a design firm with prior experience with the agency to assist with bidding. Issues arose during construction as the design was not fully developed. This led to questions about which standard of care applies and who bears responsibility for incomplete information. The presentation examines responsibilities of designers and contractors in design-build projects.
Risks & Advantages of P3 Projects by Sid Scott, Hill InternationalRoland_Nikles
Provides overview of the current status (March 2014) of public/private partnerships for development of horizontal and vertical infrastructure in the United States.
This document summarizes a study that compared the performance of projects delivered using Integrated Project Delivery (IPD) to other delivery methods such as Construction Manager at Risk, Design-Build, and Design-Bid-Build. The study analyzed 35 projects across nine performance areas including cost, quality, schedule, safety, changes, communication, labor, environment, and business performance. The results showed that IPD projects displayed superior performance in 14 different metrics across six of the nine performance areas. Specifically, IPD delivered higher quality projects faster at no significant cost premium. The conclusion was that if the statistical analysis criteria was relaxed, IPD would have shown superior performance in even more metrics and performance areas.
Aba division 4 presentation outside consultants handling of change orders (8 ...Roland_Nikles
The document discusses competing methods for analyzing project change orders, specifically whether owners should rely on the designer/construction manager or hire an independent consultant. It notes advantages and disadvantages of both approaches. Relying on designer/CM provides familiarity but they may not address risks adequately due to self-interest or desire to avoid blame. An independent consultant provides an objective perspective and expertise in risk management, but costs more due to set-up. There are valid arguments on both sides, and the best approach depends on the owner's resources and project specifics. The document aims to help owners evaluate which method may be most suitable for their needs.
Ashrae denver business project development and ipd_ springerRoland_Nikles
The document discusses integrated project delivery (IPD) and how project development risk and cost of capital influence the choice between IPD and traditional delivery models. It notes that while IPD can create value through early design decisions as shown in the MacLearny curve, investing early in development carries high risk that the value may not be realized due to market, entitlement, financing and other risks. This makes the cost of capital steeper in early development stages. Owners with higher development risk tolerance due to their business model or financing approach will prefer IPD, while others facing steeper cost of capital slopes will prefer traditional models. The key is understanding how development risk and value drivers shape the cost of capital over time for any given project
This document provides an overview of risks in engineering, procurement, and construction (EPC) contracts and techniques for mitigating those risks. It discusses major categories of project risks for EPC contracts, including construction, financial, geographical, contractual, and project management risks. Case studies are presented to illustrate examples of risks in areas like contractor expertise, payment issues, force majeure events, and project staffing. The document concludes by outlining contractual provisions and project management strategies that owners and contractors can use to mitigate risks in EPC projects.
The document discusses strategies for contractors to maximize profits on cost plus contracts through billing practices related to labor rates, equipment rates, overhead allocation, and self-performed work. It provides examples of how contractors can build profits into their billing rates and recommends contract language to define billing terms and limit hidden profit margins. The document also overview Veritas Advisory Group, a construction consulting firm that assists with dispute resolution through cost and schedule analysis.
This document discusses how sustainability planning can benefit building projects and clients. It defines sustainability as meeting present needs without compromising future generations' ability to do the same. A sustainability plan establishes long-term priorities and goals, identifies opportunities and challenges, and engages partners. For clients, sustainability planning provides knowledge of broader sustainability concepts, defined goals and priorities to guide decision-making, and clear communication of expectations to partners.
Aba forum division_4_aurora_light_rail_presentation_shresta_2012_11_27Roland_Nikles
The document provides an update on the status of the FasTracks transit expansion plan in the Denver region. It summarizes that 81 miles of new rail and bus rapid transit lines are currently under construction, with $4.7 billion invested by 2017. It also describes funding sources such as federal grants and loans that are supporting projects like the Eagle P3 commuter rail line between Denver and Denver International Airport. Construction is progressing on lines like the West Rail Line, East Rail Line of the Eagle P3 project, and the new I-225 rail line to Aurora.
6. Comparison of Contractual Structure
Design-Bid-Build vs. Design-Build
Design-Bid-Build
Bid Based on
Owner Defined Scope
CONTRACT CONTRACT
Design
Professional
Contractor
Construction SUB
Documents CONTRACT
Sub
Contractors
6
7. Comparison of Contractual Structure
Design-Bid-Build vs. Design-Build
Design-Bid-Build Design-Build
Bid Based on
Performance
Criteria and
Bid Based on
Owner Owner General
Defined Scope
Specifications
CONTRACT Construction
CONTRACT CONTRACT
Documents
Design Contractor
Professional
Contractor
Designer Builder
SUB Construction SUB
CONTRACT Documents CONTRACT
Sub Sub
Contractors Contractors
7
8. Design-Build
Bid Based on
• Provides Performance Performance
Criteria Criteria and
Owner • Provides General General
Owner
Specifications
Specifications
CONTRACT
Contractor
• Provides Design Team
Designer Builder
• Detailed Construction
Contractor Documents Construction SUB
Documents CONTRACT
• Management of
Construction
Sub
Contractors
8
9. Design Build Concept
Design Builder Contractor
Owner and Owner
Owner Prepares Owner Builds
Design Builder Reviews
Specifies Detailed Approves According to
agree on Price Design for
Project Needs Design Design Agreed
and Contract Compliance
Documents Designs
9
10. Design-Build vs. Design-Bid-Build
Both Owners and the Design Builders
Occasionally Misapply the Design
Build Concept…
We will present examples of each.
10
11. Typical Problem Areas
Design Scope Construction
DB designs Unlike DBB, Scope is DB may provide
minimal to meet sometimes vague, a basic industry
performance, Ow change to the DB is a standards while
ner expected design evolution to the Owner expected
higher standard Owner greater standards
11
12. Example of Owner Misapplied Concept
Contractor
Owner and Design Builder Owner
Owner Owner Builds
Design Builder Prepares Burdens
Specifies Approves According to
Agree on Price Design Design
Project Needs Design Agreed
and Contract Documents Process
Designs
12
13. Typical Problem Areas
Design
Example:
Large Industrial Complex.
DB designs
minimal to meet
performance, Ow
ner expected
higher standard
13
14. DB’s Expected Drawing Development
A1 AFC or Rev 01
Rev 00
• Design • Incorporates • Incorporates
development Owners any minor
to point of Comments to comments or
Owner review. A1, Approved from
for unforeseen
Construction issues
14
16. 2007 2008 2009
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
12/21/07
Work Started in July 2007. The
evolving design, due to owner
changes, delayed the initial
drawing submittals until
December.
E1
16
17. Evolution of Drawing 101
Owner Rejects Drawing:
• Comment #1: Owner prefers the two plans be
combined and produced at a larger scale.
• Comment #2: Owner directs preferred labeling
of Walls
17
18. 2007 2008 2009
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
Contractor adds changes
2/24/08 complying with Owner changes.
The two drawings were
combined into one as
requested.
E2
18
19. Evolution of Drawing 101
Owner Rejects Drawing:
• Comment #3: Owner states that the combined
drawing scale is now too small to describe the
details desired.
• Comment #4: Owner comments that the line
width used on the drawings was to narrow.
19
20. 2007 2008 2009
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
4/4/08
Rev 00
The Owner requires what was a
single drawing now be broken out
into six new detail drawings
102 103
104 105
106 107
00
20
21. Drawing 101 Becomes 7 Separate Drawings
Effort x 1
101
Key Plan
102 103 104 105 106 107
Design Effort Increased x 6
21
22. 2007 2008 2009
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
Drawings Issued for
4/20/08 Construction on April 4th
Floor slab revised to
accommodate preferential
Owner decision to add
Storage and Bathrooms.
Change required on
3 separate drawings
01
22
23. Evolution of Drawing 101
Owner Rejects Drawing:
• Comment #5: Owner requires the removal of an
a reference to another drawing, wants detail on
each drawing.
• Comment #6: Owner requires that a note
describing a typical expansion joint be
specifically added at each joint location.
23
24. 2007 2008 2009
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
10/18/08
Walls moved to increase
size.
03
24
25. Evolution of Drawing 101
Owner Rejects Drawing:
• Comment #7: Owner now wants 20 more
expansion joints. Although all are the same, the
Owner requires that each has to be specifically
detailed.
25
26. 2007 2008 2009
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
10/31/08
All 7 Drawings reissued
specifically detailing 20
Expansion Joints.
04
26
27. Evolution of Drawing 101
Owner Rejects Drawing:
• Comment #8: Owner increases size of
equipment in the building, rejects drawing and
directs that it be changed to accommodate the
new equipment.
27
29. Expected Drawing Development
A1 AFC or Rev 01
Rev 00
• Design • Incorporates • Incorporates
development Owners any minor
to point of Comments to comments or
Owner review. A1, Approved from
for unforeseen
Construction issues
29
30. Impacts Caused by Owner’s Design Process Involvement
A1 AFC Rev
1
A2
Rev 2 Rev3 Rev4
A3
A4 Rev 5 Rev 6 Rev12
>10,000 Additional Drawings
30
32. Impacts of Owner Misapplied Concept
• The Owner’s design involvement caused the
Contractor:
– Unplanned additional resources needed for
management, development, and production of
drawings
– More time required to progress job
– Contractor’s costs to complete the project increased
above what was bid
32
33. Example of Contractor
Misapplied Concept
Construction
Example:
Power Station
DB may provide
basic industry
standards while
Owner expected
greater standards
33
34. Example of Contractor Misapplied Concept
Contractor
Owner Owner and Design Builder Owner
Does Not
Builds
Specifies Design Builder Prepares Reviews
According to
Work With
Project Needs agree on Price Design Design for
Agreed
Owner
and Price and Contract Documents Compliance
Specification
Designs
34
35. Comparison of Contractual Structure
Design-Bid-Build vs. Design-Build
DBB DB
Owner Owner
CONTRACT CONTRACT CONTRACT
Design
Professional
Contractor Contractor
SUB SUB SUB
CONTRACT CONTRACT CONTRACT
Sub Design Sub
Contractors Professional Contractors
35
36. Design Build – Liabilities
DB
• Design Errors and
Omissions are
Owner
Under Contractor
Liability
CONTRACT
• Subcontractor
Time and Money
$ $
Claims are charged
Contractor
against Contractor
to correct design
SUB SUB
issues CONTRACT CONTRACT
• Possible LD’s to
Owner
Design Sub
Professional Contractors
36
37. Example of Contractor Misapplied Concept
Completion Work Status
At Termination:
• Plant was nearly operational
• Over half of systems turned over
• ~500 well defined punch list items
37
38. Opposing Views of Project
Contractor’s Story Owner’s Story
• Project will Perform • Project Not Built as
as Contracted Contracted
• Essentially • Auxiliary Systems not
Operational Built Per Design
• Owner Being • Contractor Failed to
Unreasonable Perform
38
39. Example of Contractor
Misapplied Concept
Upon Investigating the Work-in-Place,
– Design did not Conform to Owner’s
Criteria,
– Work in Place did not Conform to Detail
Construction Design
39
40. Design Build – Liabilities
DB
Design Professional’s
Contract was essentially a Owner
Typical Subcontract
Agreement. CONTRACT
When General Contractor
was Terminated, Design
Professional took the
$ Contractor
position they had no SUB SUB
CONTRACT CONTRACT
further contractual
obligation.
Design Sub
Professional Contractors
40
41. Example of Contractor Misapplied Concept
EXAMPLE of DESIGN ISSUES
Unit Drain System
Punchlist Item:
“Drain funnels are spraying fuel oil on the ground”
41
42. EXAMPLE of DESIGN ISSUES
Unit Drain System
Problem Encountered:
Fuel Oil Is Spilling
Owner Equipment
• Unexpected Result
• Environmental Issue
42
43. EXAMPLE of DESIGN ISSUES
What Was SPECIFIED:
Funnel Connection was Specified by Manufacturer
of this Owner Supplied Equipment
Vendor Required Funnel
Connection Owner Equipment
1”
2”
43
44. EXAMPLE of DESIGN ISSUES
Conflict in Specifications and Design Drawings.
• Design-Build contractor Changed the Owner’s
Requirement for a funnel connection without
the Owner’s Review of Approval.
44
45. EXAMPLE of DESIGN ISSUES
What was DESIGNED:
Contractor’s Design Drawings showed the 1” pipe being
connected to a 1” underground pipe by a Flange Joint
Owner Equipment
1”
1”
45
46. EXAMPLE of DESIGN ISSUES
Conflict in Engineering Design Drawings and
Actual Construction.
• Owner Refused to Accept Flanged
Connection, they were supposed to have a
Funnel Connection.
• Design-Build Contractor, Cut Off the Flange
and Welded on a Funnel Connection.
46
47. EXAMPLE of DESIGN ISSUES
Field Change:
Contractor makes field change for a funnel connection
without the Owner’s Review or Approval
Owner Equipment
47
48. EXAMPLE of DESIGN ISSUES
Contractor’s Resolution:
A 1” pipe with funnel connection runs
underground to a tank
Owner Equipment
1”
1”
48
50. EXAMPLE of DESIGN CORRECTIONS
Steps to Resolve
Remove Work-in-Place and Install New Work
Owner Equipment
• Stop System
• Hand excavate and
Remove 1” Pipe
• Install 2” Pipe and
Appropriate Funnel
• Backfill
50
51. Example of Contractor Misapplied Concept
• Unapproved and non-conforming design had to be
corrected by the replacement engineer
• Significant portions of work-in-place had to be
removed and re-constructed in accordance with
corrected design
• As more systems were inspected and design was
corrected, the Punch list grew to over 2,000 items
51
52. Lessons Learned
Design Scope Construction
Owner strive to Define Scope matrices Define Standards
specify its desires that specifically pre-contract,
pre-contract and identify items and evaluate
then limit review to responsible party experience of
compliance Design Builder
52
54. Delta Consulting Group is an international consulting firm of multi-
disciplined professionals in engineering, accounting, construction,
project management and litigation support. Our key services
include: Dispute Avoidance/Resolution, Expert Witness Testimony,
Project Management, Financial Advisory, as well as Troubled
Project and Surety Consulting.
Delta Consulting Group, Inc.
4330 Prince William Pkwy., Suite 301
Woodbridge, VA 22192
703.580.8801 (p) | 703.580.8802 (f)
www.DELTA-CGI.com
J. Mark Dungan: Co-Founding Partner
Email: mdungan@delta-cgi.com
54