Alternative Project Delivery - Texas Water Development Board

Description of Project Delivery Methods
Under this approach, the Owner generally retains the Design Engineer in the capacity
of the Resident Engineer to administer the construction contract and review the
Construction Contractor’s compliance with the design requirements. The Resident
Engineer is acting as the public entities' agent to review and witness the Contractor’s
work. This relationship is generally regarded as a check and balance approach to
protect the Owner.
Areas of Concern
Potential drawbacks with the typical DBB approach as compared with other
alternative delivery approaches are related to project schedule, project risk allocation,
design and technology innovation, project performance, constructability and
operability. Many of these areas of concern are directly linked to other DBB
beneficial attributes. For example, a benefit of sequential project phasing is the
increased ease of public review of the project. The drawback of sequential project
phasing is that the project schedule is typically longer than other project delivery
approaches.
Perhaps the fundamental element of the DBB project delivery approach is to attempt
to keep the project cost as low as possible. The key objective is to obtain the lowest
construction bid. Because of the historical perspective that transferring elements of
project risk to an engineer and/or Contractor will increase project costs, a majority of
the project risk using the DBB approach is retained by the Owner.
An example may help illustrate this point. Generally, in a DBB, the Contractor’s bid
price is to supply only that which is explicitly called for in the Design Engineer’s
plans and specs. Because of this feature, the DBB project delivery method is
prescriptive. If the plans and specs do not include a component necessary for the
project’s performance, the Owner is generally responsible for the added cost of the
change to the project. All the involved parties for a variety of reasons could dispute
this situation further adding to the cost and schedule of the project. However, using
alternate project delivery methods can provide an opportunity to allocate some of this
risk to the selected design-build team. If an alternative delivery project is
performance-based, as opposed to design-based, then most of the risk associated with
facility performance can be allocated to the Design Engineer and Contractor.
As reflected above in Figure 2-1, the Owner is responsible to accurately define the
project, communicate it effectively to all of the parties, then direct, coordinate and
execute the project delivery to meet all parties' needs. In this role, with usually three
separate contracts with parties with frequently disparate interests, the task is inherently
more prone to disputes.
In a DBB project delivery, where the Design Engineer is on a fee-for-service basis,
there is limited incentive for a Design Engineer to risk undertaking innovative
technologies. From a business perspective, Design Engineers that can repeatedly use
similar components of plans and specifications can be more efficient and perhaps
more profitable. Thus, engineers are not generally rewarded financially for design
innovation.
B1381-Sect2 R. W. Beck 2-5