Alternative Project Delivery - Texas Water Development Board

Design-Build-Operate (DBO)
Issues Checklist
A Design-Build-Operate or DBO approach involves securing a contract with one
vendor team who will have the overall responsibility for the development, design,
construction, start-up, acceptance testing, and long-term operation of the facility. This
differs from the DB approach in that operation of the facility is provided through the
vendor team also providing design and construction services. The DBO vendor team
is usually selected through a formal RFQ/RFP process where the owner retains a
procurement advisor and attorney to assist with the process, including development of
project criteria and a draft service agreement.
Generally, one of the participants in the DBO vendor team is the project guarantor
who pledges to financially back the performance guarantees of the team for the project
duration. This ensures that the project will perform as intended by the owner.
The typical project structure and the relationships of the various parties involved in a
DBO project are shown below.
DBO Project Structure
Customer
Customer Customer Customer Customer Customer
Bonds
Owner
Project
Guarantor
DBO Contractor
DB
Contractor
O & M
Contractor
Payment and
Performance Bond
Insurance for Risk
Mitigation
Design
Equipment &
Technology
Construction
Contractor
Startup / Testing /
Performance
Guarantee
Operation &
Maintenance
Issues Checklist R. W. Beck 5