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Current Design-Build Practices for Transportation Projects
5. Contract Issues
5.1. "Basic Configuration / Alternative Technical Concepts"
A number of agencies include a basic configuration concept in the contract, for the purpose of constraining the design-builder's ability to deviate from a particular design and also to provide for payment to be made to the design-builder if the assumed configuration that was the basis for its price estimate proves to be impossible to build. Design-build proposers have the right to assume that the Basic Configuration and the design contained in the contract drawings are feasible and represent a reasonable engineering approach to the project. Some owners allow specified deviations from the furnished geometric criteria in the basic configuration alignment while other owners allow proposers to submit alternate technical concepts for review and concurrence during the proposal process.
LADOTD (May 2009)
LADOTD includes a basic configuration concept in its contracts. Material changes to the basic configuration may provide a basis for additional time or compensation.
Reference - Basic Configuration special provisions: see the NCHRP Project No. 20-7 / Task 172, Recommended AASHTO Design-Build Procurement Guide (or the January 2008 AASHTO Guide for Design-Build Procurement), sample special provision Number 001-BC-01 Basic Configuration Washington DOT 2005 or No. 002-BC-02 Basic Configuration Florida DOT 2000.
Reference - Alternative Technical Concept special provisions: see the NCHRP Project No. 20-7 / Task 172, Recommended AASHTO Design-Build Procurement Guide (or the January 2008 AASHTO Guide for Design-Build Procurement), sample special provision Number 003-ATC-01 Alternative Technical Concepts ACTA 1998 and Number 004-ATC-02 Alternative Technical Concepts Minnesota DOT 2001.
5.2. Escrowed Pricing Documents
A number of agencies have required contractors to escrow their pricing documents to be available under specified circumstances, often limited to disputes but for some projects extending to matters such as negotiation of change orders. For such contracts, and where the documents are held in the agency's offices instead of an off-site location, the agencies believe that access to the pricing data has been helpful.
LADOTD (May 2009)
LADOTD used a pricing documents escrow for the John James Audubon Bridge but does not generally escrow pricing documents.
5.3. Design Review Process/Release for Construction
There is no consensus regarding the appropriate level of design reviews or design requirements to be met before the design-builder is allowed to start construction. Approaches range from Florida DOT's oversight of the design for compliance with AASHTO standards, without any review of details, on occasion allowing construction to proceed without plans, to Utah DOT's "over-the-shoulder" participation of the design reviews conducted by the design-builder, to the detailed design reviews required for the TCA projects, including specific approvals associated with release for construction.
FDOT (Jan 2003): FDOT now requires plans and shop drawings to be stamped "released for construction" by FDOT before construction for that component can begin. FDOT does not allow a contractor to proceed without stamped plans, unless the component is an insignificant, low cost item. Plan components must be signed and sealed before construction can begin.
By contrast, in some states, design approvals may be required in order to avoid liability to third parties for design defects. For example, in California, public agencies are entitled to sovereign immunity for design defects resulting in dangerous conditions of public property only if the design was approved by a public employee with discretion (or by the governing board of the agency).
LADOTD (May 2009)
LADOTD requires signed and sealed issued-for-construction documents prior to construction on each element of work, similar to the approach used by FDOT.
MDSHA (August 2008)
SHA's process allows the design-build team to choose what is best suited for their needs in order to gain design approval and proceed to construction. SHA performs typical milestone reviews that are defined as semi-final plan submittal (65% completion) then final plans (100% completed). SHA also allows the design-build team to break the project into useable segments that allow the contractor to proceed towards constructing a particular element, while other elements are being designed. The typical review timeline is set at 21 calendar days. SHA documents all review comments in a letter back to the design-build team in which we require a point-by-point response. When satisfied, SHA will issue a formal design approval and release for construction.
5.4. Cap on Liability
Most "traditional" public works contracts do not include limitations on the contractor's liability. Although limitations on liability are of significant concern to contractors in general, they appear to be more concerned about private projects and less concerned about public projects. This may be due in part to a belief that public agencies are less likely to bring action if a problem occurs, and in part to the fact that the type of damage that a public agency is likely to incur is significantly different from damages that would be incurred by for-profit operations. Nevertheless, for major projects, particularly those involving toll or other revenues, and particularly where the pool of potential proposers is small, contractors are likely to ask the project owner to include provisions limiting their liability.
LADOTD (May 2009)
LADOTD's design-build contracts do not include a cap on the design-builder's liability.
5.4. Scope Validation (New)
The Virginia DOT is using a contract provision that provides for post-award contract adjustments, where the design-builder identifies scope related issues tht could not have been reasonably anticipated during the proposal phase. The Scope Validation Period is a period of time, generally 90 to 120 days, after notice to proceed in which the Design-Builder shall thoroughly review and compare all of the contract documents to verify and validate their proposed design concept and identify any errors, omissions, inconsistencies, constructability problems, site conditions or any other defects or concerns of any kind that may affect their ability to complete its proposed design concept within the contract price and contract time. If a scope issue could not have reasonably been identified by design-builder prior to the agreement date, and if resolution of the issue materially impacts the design-builder's price or time to perform the work, the design-builder shall be entitled to submit a request for work order. The Scope Validation Period helps alleviate the design-builder's risk for scope issues that could not reasonably be identified prior to award.
The "Scope Validation and Identification of Scope Issues" contract provision is shown in Appendix 4.
To view all of VDOT's PART 4 - General Conditions of Contract Between Department and Design-Builder, see: http://www.virginiadot.org/business/resources/DB_Template_Part4_General_Conditions_070813.pdf.
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