Civil Engineering Project Management (4th Edition)

• The promoter may need to employ an inspector to watch the contractor’s
construction.
• Bidding costs for other than simple structures are expensive, so contractors
may refuse to bid if more than three or four are invited to tender.
If the promoter does not employ a consultant or inspector to check the contractor’s
work, his only real control over its quality and the end result is his
checking of the packages offered by tenderers before awarding the contract.
This is not necessarily sufficient because, in the limited time available for tendering,
the contractor cannot work out all the details of his design nor specify
the exact nature of everything he will supply. Thus the promoter can suffer
disappointment at what he receives; and if he then wishes to make any
changes these may be very costly or even impracticable.
(b) Design, build and operate contracts
Procedures for design and construction 25
Under this type of contract the contractor is required to operate and maintain
the works for a period of perhaps 3–5 years after he has completed their construction.
The contract may be for a lump sum, a proportion of which is payable
in stages during the operating period, or income may be derived from sales or
charges – bridge tolls for example.
Advantages are:
• The contractor is given an incentive to design and construct well, in order
to ensure low maintenance and repair costs during the operating period.
This is useful to a promoter who, for instance, wants a road built, because
problems arising from faulty design or construction tend not to be revealed
except under two or three years’ trafficking.
• The operation provision reduces the promoter’s need to check the contractor’s
work.
• The maintenance provision keeps the contractor available to undertake
repairs during the operating period, though the promoter must have powers
to act if the contractor does not undertake repairs and maintenance properly.
Disadvantages are:
• The same as those listed for design and build contracts under (a) above.
• The contractor has to shoulder added risks so his price can be high.
• The contractor’s costs of bidding are higher than for a D&B contract.
A problem is that repairs or excessive maintenance could arise from unforeseeable
ground conditions or, in the case of a road for instance, from traffic
loading exceeding that specified in the contract, so occasions for dispute could
arise. The promoter will also be responsible for any repairs due to an inadequacy
in his specifications for design and construction. Where design, build
and operate (DBO) contracts are for provision of buildings and process plant,
such as for water or wastewater treatment, it is the quality of the equipment
and consequent output which is principally tested by the period of operation.