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PREPARATION, EXECUTION AND PERFORMANCE OF A DESIGN/BUILD CONTRACT

PREPARATION, EXECUTION AND PERFORMANCE OF A DESIGN/BUILD CONTRACT. Erik M. Rosenwood and Adam L. Horner DESIGN PROFESSIONAL SERVICE GROUP. Topics to be covered:. Understanding the risks and rewards of Design/Build Things to consider when executing Design/Build contracts

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PREPARATION, EXECUTION AND PERFORMANCE OF A DESIGN/BUILD CONTRACT

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  1. PREPARATION, EXECUTION AND PERFORMANCE OF A DESIGN/BUILDCONTRACT Erik M. Rosenwood and Adam L. Horner DESIGN PROFESSIONAL SERVICE GROUP

  2. Topics to be covered: • Understanding the risks and rewards of Design/Build • Things to consider when executing Design/Build contracts • Performing a Design/Build Contract as a Design Professional

  3. DESIGN/BID/BUILD OWNER General Contractor/Construction Manager At-Risk Architect/Design Professional

  4. DESIGN/BUILD Owner Design/Builder Architect/Design Professional Construction subcontractors Sub-consultants (geotechnical, environmental, civil, etc.)

  5. PART I UNDERSTANDING THE RISKS AND REWARDS OF DESIGN/BUILD

  6. Faster and more cost effective* Complete control over design and construction Single point of responsibility Focus on problem solving, not assigning blame for problems Currently about 40% of the market and growing! Ability to identify and address errors in design before they become a big problem – Limit exposure You control the flow of money Much higher profit potential Recover overhead and general conditions as well as profit Benefits of Design/Build

  7. FASTER AND MORE COST EFFICIENT • Enhance constructability and cost estimating • Value engineering • Geotechnical and Environmental concerns integrated into project planning and sequence • Long lead item procurement • Identifying design delegation responsibilities with subcontractors

  8. Things to Consider Before Choosing Design/Build • Is there a conflict? Design Professional is under contract with Design/Builder not Owner • Creating a separate corporate entity • Considering Risk • Guaranteed Maximum Price • Subcontractor default • The Expectations Problem • Playing the role of general contractor…Are you ready?

  9. Things to Consider Before Choosing Design/Build (Con’t.) • Construction accounting skills lacking • Licensing issues • No Standard of Care • Job Site Safety • Risks as Design Professional Subcontractor

  10. PART II Executing Design/Build Contracts

  11. AIA Contracts • A141-2004: Owner / Design-Builder Agreement • A142-2004: Design-Builder / Contractor Agreement • B143-2004: Design-Builder / Architect Agreement

  12. Things to Consider When Contracting with Owner for Design Build? • Does Owner have Owner’s rep. or consultant? • Communicate and Document • Limitation of Liability • Explain duties of all parties in letter or memorandum • Arbitration provision?

  13. PART III PERFORMANCE OF THE DESIGN PROFESSIONAL IN DESIGN/BUILD CONTRACTS

  14. Things to Consider when Contracting with Design/Builder as Design Professional • Try to limit liability for flow down claims • Clearly define scope of work • Limitation of Liability • Arbitration provisions • Limiting consequential damages

  15. Risks for the Design Professional in a Design/Build Contract • “Flow down” provisions for Design Professional – Subcontractor • Design Builder may want less than full construction drawings to limit cost • Other ‘subs” may do portions of design • Construction Administration services are usually very limited • Respond to questions and inquiries • Sign off at substantial completion • Certification to governmental authorities

  16. The Differing Role of the Design Professional in Design/Build • Design system by system • Eliminate “Defensive Detailing” • Investigate alternative designs • Delegating design duties to specialty subcontractors • Setting price constraints • Alter design sequencing • Maximize flexibility of design-build team

  17. Questions?

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