One of the frequent questions occurring in the Water Design-Build Council's education session is understanding how to apply the terms – prescriptive and performance – in a “fixed-price” design-build project.
The “fixed-price” design-build delivery method enables owners to select a design-build firm for their water/wastewater infrastructure project that best fits the project budget, scope, and schedule requirements.
For a fixed-price design-build project, there are two options available; one is defined as a “prescriptive” process, and the other is “performance.”
The “prescriptive” approach is the preferred method when owners have determined well in advance their overall project objectives and drivers and, most of all, they have clearly defined the specific technical, budget, and schedule requirements they want in order to achieve a successful project. In this instance, this type of project is typically straightforward and owners are not seeking to integrate innovative technology or new systems.
The second option available for a fixed-price project is characterized as “performance” based. In this approach, owners encourage the design-builders to inject their innovative ideas during the proposal phase of the project. In this option, innovation is accomplished by utilizing more performance-based requirements and limiting bridging documents.
Such innovation often results in diverse and distinct solutions that help to differentiate the attributes of the design-builder’s proposal during the selection process.
The first step in ensuring success is fostering competition among the selected short-list design-builders. The selection process also begins with defining the technical merits of each proposed design, as well as ensuring that a clear work scope, schedule, and cost exists. But specifically, the owner needs to be clear in defining whether the fixed-price design-build project is either prescriptive or performance based.
Once a selection is made, the design-builder and owner can truly collaborate by having open dialogue to determine the best treatment processes, design, scope, cost, and schedule priorities. As a collaborative delivery model, a fixed-price project focuses on the owner’s scope and cost priorities, in order to achieve an accelerated schedule for an effective long-term water infrastructure project. The collaboration for a fixed-price project occurs in the selection process.
For example, in the performance-based approach, the design presented to the owner during the selection process is often not completed to achieve the most cost- and schedule-efficient design. However, during the contract negotiation, the collaboration that occurs in the discussion process offers flexibility to offer design considerations. It is these collaborative attributes that separates design-build delivery from traditional contracting methods.
In early 2017, the WDBC will complete its new Fixed-Price Procurement Guide which provides owners with clear direction on the two variations of prescriptive and performance-based approaches.