Alternative Project Delivery - Texas Water Development Board

Section 2
performance (i.e. finished product water or treated effluent standards) require
considerable research, evaluation, and negotiations.
Benefits
In EPC contracting, as opposed to DBB or DB, the EPC Contractor is not
necessarily bound to a specific Design Engineer or a Construction Contractor.
Consequently, the EPC Contractor can act as an Owner’s Agent, negotiating terms
and conditions and seeking competitive costs from subcontractors and equipment
vendors for specific elements of the project work. When a project involves a
technology that is a specialty of a given EPC Contractor, the Owner can gain the
benefit of the value-added services from that EPC Contractor.
Areas of Concern
In EPC project delivery, the vendor is providing some degree of design and
construction services similar to DB. Consequently, the areas of concern regarding DB
and EAR project delivery methods previously identified also apply.
Performance-based EPC contracts provide the least opportunity for the Owner to
exercise control over design details and to facilitate general public project input. The
contract emphasis is on constructing a facility that meets the Owner’s schedule and
defined performance requirements under a given price structure. The Owner may
have limited input into details beyond those typically associated with a 50-60% design
unless they were previously defined in the Owner’s Project Criteria.
Design-Build-Operate (“DBO”)
Description
A Design-Build-Operate or DBO approach typically involves the Owner retaining a
Procurement Advisor to provide procurement support services. The Procurement
Advisor may provide limited design engineering services or the Owner may hire a
Design Engineer to develop the Project Criteria. The Procurement Advisor role is
to aid the Owner in the preparation of the Request for Qualifications (‘RFQ”) and the
Request for Proposals (“RFP”) to secure a DBO vendor team. Due to the complexity
of a contract that includes project development, construction and operations phases,
the Owner typically retains an attorney for the development of the DBO service
agreement. The Owner’s project management staff, Procurement Advisor, Design
Engineer and the contract attorney typically constitute the Owner’s project team.
The RFP’s Project Criteria may be solely performance-based or have some
prescriptive design requirements. The objective of the RFP is to secure a contract
with one party, usually the lead of the DBO Contractor team, who will have overall
responsibility for the development, design, construction, start-up, acceptance testing,
and long-term operation of the project. The DBO contract is primarily based on
delivering an asset with a given design/construction and operational performance.
2-12 Texas Water Development Board B1381-Sect2