Purpose
The purpose of this procedure is to define the design/build (DB) project delivery method. Design/Build is a project delivery method that has been in existence for many years. Forms of the DB methodology have been used in certain situations by the Bureau of Engineering (BOE).
REFERENCES
N/A
RESPONSIBILITIES
Project Manager:The Project Manager is responsible for determining the most efficient project delivery method for the project. When selecting the design/build method, the PM must consult with the Program Manager and obtain concurrence.
PROCEDURE
The basic principal of the design/build (DB) methodology is to place full or partial responsibility for both design and construction on the designer/builder. The latter is often a construction contractor who has teamed with a design firm. Alternatively, some of the larger design firms have formed construction departments that specialize in the DB approach.
The level of design undertaken by the Owner/Client can vary from essentially none to perhaps 75% design with only design details left to the DB contractor. On one extreme, some performance based DB contracts provide essentially no design and instead specify only the performance to be achieved by the final facility. An example would be an agency that desires to build a new wastewater treatment plant and issues performance based DB documents that specify the flow characteristics and final effluent standards that must be met. The DB contractor is then free to design and build to these performance standards. Obviously, the Owner’s risk increases substantially unless Manuals of Practice or other designs standards can be enforced along with maximum limits on long-term Operations and Maintenance (O&M) costs. On the other extreme, the Owner/Client could prepare 50 to 75% design documents and only require that the DB contractor provide the final details along with construction. The point is that there are many variations on the DB methodology. Identifying a project as DB doesn’t mean much unless one specifies the level of Owner/Client design contained in the bid or proposal documents.
In the most typical use of the DB methodology, the Owner/Client prepares plans and specifications for the facility to about the 25 to 30% level. This is sometimes called a “bridging” design. The bridging design is sufficient to show the basic elements of the desired facility and may also contain some performance based aspects.
Often stated advantages of the DB method include reduced project delivery time, a single point of accountability for the project, possible savings on total project cost due to reduced delivery time, earlier detection and correction of design problems, and the fostering of innovative solutions. Reduction in project delivery time seems to be a real advantage that can be quantified. Evidence for some of the other advantages is conflicting and generally not compelling. Savings on total project cost, other than costs associated with reduced delivery time, i.e. escalation, are dubious and not well documented. Also, the idea that innovative solutions are achieved is not compelling. The longer design period used in the DBB process should be just as conducive to innovative solutions and perhaps more so because DB designs occur during the fast pace of construction.
The main disadvantage of the DB process is that the Owner/Client loses control over design of the project. This is a key consideration on any decision to use the DB methodology. Some Owner/Client departments feel that it is their right to review and make changes right up to and beyond 100% design completion. Such a department might be a poor candidate for the DB methodology. Whatever the case, the Owner/Client must understand that absolute control over the design is given up to gain other advantages offered by the DB methodology.
Historically, the BOE has used the DB methodology in situations where the Bureau prepared plans and worked with in-house construction forces, such as General Services, Sanitation, or Street Services, to construct the project. The BOE has also used the DB methodology in cases of urgent necessity where the Board of Public Works authorized use of an emergency contractor. In this case, Bureau forces acted as the “designer” while the emergency contractor acted as the “constructor” on a joint City/Contractor DB team. Design of early elements, such as foundations, could be completed and given to the contractor for construction while design continued on later elements. Thus, design and construction could overlap which provided the schedule benefits of the DB methodology. Some of the Bureau’s specialty contracts, such as the Cisco contract described in Chapter 23, have also used the DB methodology.
There are a number of variations on the DB methodology, each designed to overcome some limitation to the standard methodology. Two of these variations are the Design/Build/Operate (DBO) and Design/Build/Own/Operate (DBOO) methodologies. Both are designed to reduce the Owner’s risk when using a performance based DB methodology. Because the DB contractor must operate or own and operate the facility, it is less likely to provide a “cheap” design that just meets the minimum performance specifications. The DBO method means that the City retains ownership of the facility and leases the facility to the DBO enterprise that operates it on a long term lease. Under the DBOO method, the City does not own the facility and pays the DBOO enterprise a fee for operating the facility after it is completed.
An example of a recent DBOO methodology is the Sacramento Wastewater Authority that awarded a DBOO contract for heat drying of its biosolids. The DBOO contractor designed, financed, constructed, and operates the facility which is located on agency property. The agency guaranteed a minimum biosolids input and pays in accordance with a fee schedule specified in the contract.
Many DB, DBO, and DBOO contracts are awarded on the basis of “best value.” Take the case of a performance based DB package with no bridging design. Initial design/construction costs may not provide the most cost-effective long-term economics for the Owner/Client. In addition, it may be difficult to quantify operation and maintenance costs, costs associated with different levels of redundancy, and other indirect costs. In such cases, Owners have resorted to awarding on the basis of best value. Obviously, the problem here is defining what is meant by best value and quantifying it to the extent possible. To the extent that it cannot be quantified, it opens the process to selective judgment and opinion which carries certain inherent risks for any public agency.
City Charter Section 371(e) states that,
“Consistent with competitive bidding requirements, design-build or other appropriate project delivery systems may be used when justified by the type of project and approved by the contracting authority.”
At this time, the City Attorney has opined that any project built by DB methodology must be competitively bid and awarded to the lowest, responsive and responsible bidder. Awarding a DB project on “best value” is not allowed under the present interpretation.
RELATED PROCEDURES
N/A
LINKS / ATTACHMENTS
Links
Attachments
N/A
Comments