Alternative Project Delivery - Texas Water Development Board

Issues Checklist
• A collaborative design and construction effort can foster innovation;
• Concurrent design, permitting and construction activities can reduce capital costs
and shorten project schedule; and
• The certainty of the project cost is determined at an earlier point in the project
than with a DBB approach.
Areas of Concern:
• The legal basis for this method is frequently unclear, limited or even precluded;
• State regulations may require the design to be completed as a prerequisite to
obtaining project permits;
• Perception that the design consultant's independence is compromised and the
quality of the project is sacrificed;
• The public may not be provided with comprehensive project details before the
project begins construction;
• The cost to prepare a detailed proposal may preclude smaller, yet qualified, firms
from competing for the project; and
• Significant effort and expertise is required in preparing Requests for
Qualifications/Requests for Proposals (RFQ/RFPs), and especially in preparing
and negotiating contracts.
Design-Build-Operate (DBO)
Benefits:
A DBO project delivery has all the advantages of a DB-type project, as identified
previously, plus:
• Significant cost benefit for the public may occur because the operator has an
incentive to maintain optimal equipment quality to minimize maintenance
expense for the term of the contract.
• There is an incentive to minimize project operating expenses, thus the facility
may use value engineer design, lowering overall contract costs.
Areas of Concern:
• Public owners have to relinquish some control over project construction details,
schedule, and operation;
• A multiphase project contract can be difficult to prepare, understand and
administer;
• The high cost of developing a DBO proposal may be a deterrent to smaller, less
sophisticated contractors participating in the DBO process. However, the
procurement process can be structured to require a portion of the work to be
performed by local, minority or disadvantaged contractors;
2 Texas Water Development Board Issues Checklist