Unlike DBB where the design and construction phases of a project are procured using two separate contracts with little or no overlap in the respective project work phases, the design-build ("DB") delivery approach combines the design and construction phases into one, fixed-fee contract. Under a DB contract, the design-builder, not the project sponsor, assumes the risk that the drawings and specifications are free from error. While the design and construction phases are performed under one contract, it is important to note that the design-builder may be one company or a team of companies working together. The DB selection process may be based on a negotiation with one or more contractors or a competitive process based on some combination of price, duration, and qualifications. Increasingly DB contracts are being awarded on the basis of best value, considering each of these factors.
The DB delivery approach is a relatively new process for the transportation industry in the United States, particularly for transit. Since its introduction in the early 1990s, DB has become a successful, well-established process for delivering major capital projects by the private sector. As other sectors experience success with DB delivery, transportation agencies are increasingly interested in the potential to apply DB as a means to improve the cost-effectiveness (time, cost, and quality) of traditional contracting practices.
Since 2000, 7 transit New Starts projects have been procured using a DB approach, including:
• Denver RTD Southeast Corridor LRT;
• South Florida Commuter Rail Upgrades;
• Minneapolis Hiawatha LRT;
• NJ Transit Hudson-Bergen LRT MOS-1;
• NJ Transit Hudson-Bergen LRT MOS-2;
• WMATA Largo Metrorail Extension; and
• BART Extension to San Francisco International Airport.
In addition there are two non-New Start fixed guideway projects with Federal interest that have been delivered using a DB approach:
• Portland MAX Airport Extension; and
• JFK Airtrain.
The primary advantages associated with DB delivery and other PPP delivery approaches that include a DB component (discussed below) when compared to traditional DBB delivery include:1,2,3
• Time savings: The potential for time savings results from early contractor involvement in the design phase, which increases the constructability of the design plans, the ability to work concurrently on the design and construction phases for portions of the project and the elimination of the bidding process between the design and construction phases that is required of traditional DBB project delivery.
• Cost savings: The potential for cost savings results from continued communication between design, engineering, and construction team members throughout the delivery, reduced inspection requirements by the project sponsor because the design and construction risk are the responsibility of the design-builder, reduced change orders due to early involvement of the construction contractors in the design phase and shortened project timeline, which, among other benefits, may reduce construction costs.
• Shared risks: Since the potential project risks are shared among the public and private sectors, the risks may be assigned to the party best able to handle them. For example, the private sector may be better equipped to handle the risks associated with design quality, construction costs, and adherence to the delivery schedule since it is responsible for both the design and construction of the facility while the public sector may be better able to manage the public risks of environmental clearance, permitting, and right-of-way acquisition. Additional benefits of proper risk allocation are reduced costs and minimization of contingencies.
• Improved quality: The potential for improved quality results from the involvement of the design team through the project development and opportunities to incorporate project innovations and new technology that may arise based on project needs and contractor capabilities.
PPPs may include a variety of structures and combinations that result in private participation only in the design and construction phases or also in other aspects of project delivery, including operations, maintenance, and project financing.
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1 Loulakis, M.C. Construction Project Delivery Systems: Evaluating the Owners Alternatives, AEC Training Technologies, 1999.
2 Pakkala, Pekka. Innovative Project Delivery Methods for Infrastructure: An International Perspective, Finnish Road Enterprise, 2002.
3 Tenah, K.A. "Project Delivery Systems for Construction: An Overview," Cost Engineering, AACE International, Morgantown, WV, 43(1), pp20-26.