Water Design-Build Council Blog

For owners considering collaborative delivery approaches for water and wastewater projects, such as progressive design-build (PDB) or construction management at-risk (CMAR), one of the biggest impediments to acceptance is the perception that the final cost of the project would be larger than a traditional design-bid-build and cannot be controlled. Based on our research, there are two primary reasons this stumbling block exists. One relates to the owner’s belief that their initial cost estimates are correct and that the project can be designed and constructed within their budget. A second, and perhaps more important issue, is that many owners still do not understand how the collaborative process evolves and how to reach a final acceptable price on the project, primarily because they are only familiar with the design-bid-build pricing process that uses the low-bid approach.

Findings in the research study of "Lessons Learned from Owners Using Design-Build Project Delivery" emphasizes that the key to successful design-build projects is an active and continuous collaboration between an owner and the selected project team.

As discussed in the previous blog, the underlying principle of allocating and managing risk in projects using CMAR or design-build delivery methods is to embark upon a collaborative process between the owner and construction professionals with initial discussions on how to allocate specific risks to the party best positioned to manage and assume the risk. These decisions ultimately end up in the contract between the owner and construction professional.

As part of the initial discussions when formulating a contract, the following additional areas are highlighted for your attention. In addition, WDBC’s 2018 education program now includes a specific module on contracts which also addresses the elements of risk.

The underlying principle of allocating and managing risk in projects using CMAR or design-build delivery methods is to embark upon a collaborative process between the owner and construction professionals with initial discussions on how to allocate specific risks to the party best positioned to manage and assume the risk. Chapter 3 of the WDBC Water and Wastewater Design-Build Handbook, Fourth Edition, Apportioning and Managing Project Risk, is an excellent resource on the subject of risk in collaborative delivery projects. However, the purpose of providing this more specific commentary is to share some of the risk allocating scenarios observed during the contractual process.

What is a contingency? The definition of contingency is one of the following:

Findings in the research study of "Lessons Learned from Owners Using Design-Build Project Delivery" emphasizes that the key to successful design-build projects is an active and continuous collaboration between and owner and the selected project team.

Findings in the research study of "Lessons Learned from Owners Using Design-Build Project Delivery" emphasizes that the key to successful design-build projects is an active and continuous collaboration between and owner and the selected project team.