Construction

Current Design-Build Practices for Transportation Projects

19. Further Issues Related to Design-Build

19.1. Proposal as Contract Document

Several agencies indicated that they felt it was advisable to include language in the contract clarifying what is meant by including the Proposal as a contract document. From the contractor's perspective, it may be unfair to require it to be bound by commitments made based on a 30% design. On the other hand, if those commitments were the basis for selection of the contractor, it would seem that the contractor ought to be bound by its proposal.

One issue relates to the order of priority of the documents. If the proposal contains commitments that are beneficial to the agency but which arguably conflict with provisions of other contract documents, are those commitments binding on the design-builder? NAVFAC includes language in its contracts making it clear that it has the right to require the contractor to abide by its commitments, regardless of conflicts.

Another concern relates to the possibility that assumptions made by the contractor in its proposal prove incorrect. The contractor could, in theory, claim that it was entitled to a price increase for changes that must be made to the design concepts in its proposal.Contracts could include general language addressing this concern.

An approach used by some agencies is to go through the proposal carefully, and only incorporate those provisions that the agency wants to include.

LADOTD (May 2009) - LADOTD incorporates the winning design-builder's proposal into the contract as a contract document, and the proposal is binding upon the design-builder.

19.2. Key Personnel and Designers

Some of the agencies indicated that personnel, or design firms, were reassigned from the project prematurely, and would want to include stronger provisions to discourage that from occurring.

19.3. 100% Design

In deciding to take a portion of the design work to a high level for the purpose of allowing the design-builder to start construction work immediately upon award, the agency should consider the implications of such a decision. Both UT DOT and ACTA provided their contractors with a 100% design for a small portion of the work. This creates an opening for the design-builder to contend that the 100% design work was defective. ACTA has determined, in retrospect, that it probably would have made more sense to have left those plans at 90% and to give the contractor responsibility for completing them. The reason for developing these plans to 100% was to allow the contractor to start construction immediately. In fact, because of the lag time between award of the contract and the finance date, the contractor would have been able to take those plans to 100% prior to issuance of a full notice to proceed.