PREPARATION, EXECUTION AND PERFORMANCE OF A DESIGNBUILD CONTRACT

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PREPARATION, EXECUTION AND PERFORMANCE OF A
DESIGN/BUILDCONTRACT

• Erik M. Rosenwood and Adam L. Horner
• DESIGN PROFESSIONAL SERVICE GROUP

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Topics to be covered

• Understanding the risks and rewards of
  Design/Build
• Things to consider when executing Design/Build
  contracts
• Performing a Design/Build Contract as a Design
  Professional

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DESIGN/BID/BUILD
OWNER
General Contractor/Construction Manager At-Risk
Architect/Design Professional
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DESIGN/BUILD

• Owner

Design/Builder
Architect/Design Professional
Construction subcontractors
Sub-consultants (geotechnical, environmental,
civil, etc.)
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• PART I
• UNDERSTANDING THE RISKS AND REWARDS OF
  DESIGN/BUILD

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Benefits of Design/Build

• Faster and more cost effective
• Complete control over design and construction
• Single point of responsibility
• Focus on problem solving, not assigning blame for
  problems
• Currently about 40 of the market and growing!
• Ability to identify and address errors in design
  before they become a big problem Limit exposure
• You control the flow of money
• Much higher profit potential
• Recover overhead and general conditions as well
  as profit

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FASTER AND MORE COST EFFICIENT

• Enhance constructability and cost estimating
• Value engineering
• Geotechnical and Environmental concerns
  integrated into project planning and sequence
• Long lead item procurement
• Identifying design delegation responsibilities
  with subcontractors

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Things to Consider Before Choosing Design/Build

• Is there a conflict? Design Professional is
  under contract with Design/Builder not Owner
• Creating a separate corporate entity
• Considering Risk
• Guaranteed Maximum Price
• Subcontractor default
• The Expectations Problem
• Playing the role of general contractorAre you
  ready?

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Things to Consider Before Choosing Design/Build
(Cont.)

• Construction accounting skills lacking
• Licensing issues
• No Standard of Care
• Job Site Safety
• Risks as Design Professional Subcontractor

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• PART II
• Executing Design/Build Contracts

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AIA Contracts

• A141-2004 Owner / Design-Builder Agreement
• A142-2004 Design-Builder / Contractor Agreement
• B143-2004 Design-Builder / Architect Agreement

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Things to Consider When Contracting with Owner
for Design Build?

• Does Owner have Owners rep. or consultant?
• Communicate and Document
• Limitation of Liability
• Explain duties of all parties in letter or
  memorandum
• Arbitration provision?

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• PART III
• PERFORMANCE OF THE DESIGN PROFESSIONAL IN
  DESIGN/BUILD CONTRACTS

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Things to Consider when Contracting with
Design/Builder as Design Professional

• Try to limit liability for flow down claims
• Clearly define scope of work
• Limitation of Liability
• Arbitration provisions
• Limiting consequential damages

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Risks for the Design Professional in a
Design/Build Contract

• Flow down provisions for Design Professional
  Subcontractor
• Design Builder may want less than full
  construction drawings to limit cost
• Other subs may do portions of design
• Construction Administration services are usually
  very limited
• Respond to questions and inquiries
• Sign off at substantial completion
• Certification to governmental authorities

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The Differing Role of the Design Professional in
Design/Build

• Design system by system
• Eliminate Defensive Detailing
• Investigate alternative designs
• Delegating design duties to specialty
  subcontractors
• Setting price constraints
• Alter design sequencing
• Maximize flexibility of design-build team

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Questions?