Alternative Project Delivery - Texas Water Development Board

Section 2
Ownership and funding of the project asset is generally public under this approach.
Often, the Owner retains either the Design Engineer or a Construction Manager to
ensure that the Contractor fulfills contract obligations. Upon completion of
construction, the constructed asset is turned over to the Owner to operate.
Key Contractual Issues
The basis for fulfilling the Construction Contractor’s contractual obligations are that
construction has been completed and performed in accordance with the Design
Engineer's specifications. Typically, any guarantees or warranties provided by the
Construction Contractor are limited to whether facilities are constructed and
equipment installed to industry standards. Generally, neither the Design Engineer nor
the Construction Contractor is explicitly obligated to demonstrate that the
completed facility will perform its intended purpose. The contracts are based
primarily on delivery of an asset meeting the design specifications.
From design to completion, the typical DBB project delivery involves numerous
parties and a minimum of three discrete contracts. The Owner retains most of the
project risk. The Design Engineer typically is not selected on the basis of the
delivered cost of the project. The design and construction process is neither
interactive nor integrated. Each phase of the project is consecutive: design, bidding,
permitting, construction and operation. Design deficiencies or unforeseen conditions
are addressed via "change orders" between the Owner and the Construction
Contractor.
Benefits
The key benefit of a traditional DBB approach is that it is the archetypal model for
project delivery of municipal infrastructure. As the historical basis for most
regulatory, legal, financial, insurance and political requirements for municipal project
delivery, it has been accepted, tested and consequently is well understood by all
stakeholders. The general familiarity and frequent repetition of the use of the DBB
approach may minimize project "soft" costs.
The sequential project phasing, provides significant opportunities for public scrutiny
of the project. Typically under this approach the project begins with a feasibility
report and an estimate of probable project costs. At this point, a conceptual project
definition and cost is available for review and approval. This is the first opportunity
for public scrutiny of the project’s cost-benefit features. In a DBB approach, the
design is then completed and typically accompanied by an engineer’s final project cost
estimate. The final design and cost estimate can then be reviewed and approved as a
whole by the public. Next, the construction bid and contract are distributed and bids
are received and evaluated. The lowest responsible bidder is typically awarded the
bid. At this point, the project is fully defined by the plans and specs and a
presumptive final cost for the facility is available. This is a third opportunity for
public review of the project. This sequential definition of the project provides
multiple opportunities for the public's consideration of the project and extensive
Owner input and project control.
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