Project Administration for Design-Build Contracts Other Titles of Interest ALTERNATIVE PROJECT DELIVERY PROCUREMENT, AND CONTRACTING METHODS FOR HIGHWAYS Edited by Keith R. Molenaar and Gerald Yakowenko Provides an objective description of procurement methods that can improve the efficiency and effectiveness of public-sector project delivery. ASCE Committee Report, 2007. ISBN 978-0-7844-0886-5 CONSTRUCTION CONTRACT CLAIMS, CHANGES, AND DISPUTE RESOLUTION, SECOND EDITION Paul Levin Merges the principles of construction law with practical advice to aid those involved in the construction claims process. ASCE Press, 1998. ISBN 978-0-7844-0276-4 INTERPRETING CONSTRUCTION CONTRACTS: FUNDAMENTAL PRINCIPLES FOR CONTRACTORS, PROJECT MANAGERS, AND CONTRACT ADMINISTRATORS H. Randolph Thomas and Ralph D. Ellis Uses rules set forth by the judiciary and decades of practical experience to discuss troublesome contract clauses and present rules to construe them so as to avoid disputes. ASCE Press, 2007. ISBN 978-0-7844-0921-3 PREPARING FOR DESIGN-BUILD PROJECTS: A PRIMER FOR OWNERS, ENGINEERS, AND CONTRACTORS Douglas D. Gransberg, James E. Koch, and Keith R. Molenaar Covers the basics of developing a design-build project, from developing requests for proposals, to preparing an effective proposal, to evaluating and selecting a source. ASCE Press, 2006. ISBN 978-0-7844-0828-5 PREPARING REQUESTS FOR PROPOSALS AND SPECIFICATIONS FOR DESIGN- BUILD PROJECTS ASCE Committee on Specifications, ASCE Construction Institute Explains in detail the key steps in preparing a concise, well-written request for proposals. ASCE Committee Report, 2008. ISBN 978-0-7844-0987-9 TEN COMMANDMENTS OF BETTER CONTRACTING Francis T. Hartman Outlines ten basic rules for improving contract performance. ASCE Press, 2003 ISBN 978-0-7844-0653-3 THE ENGINEERS JOINT CONTRACT DOCUMENTS COMMITTEE (EJDCD) CONTRACT DOCUMENTS Fair and objective standard documents that represent the latest and best thinking in contractual relations between all parties involved in engineering design and construction projects. For more information, please visit http:// pubs. asce.org/c ontracts. Project Administration for Design-Build Contracts A Primer for Owners, Engineers, and Contractors James E. Koch, Ph.D., P.E. Douglas D. Gransberg, Ph.D., P.E. Keith R. Molenaar, Ph.D. Library of Congress Cataloging-in-Publication Data Koch, James Edward. Project administration for design-build contracts : a primer for owners, engineers, and contractors / James E. Koch, Douglas D. Gransberg, Keith R. Molenaar. p. cm. Includes bibliographical references and index. ISBN 978-0-7844-1075-7 1. Building—Superintendence. 2. Buildings—Specifications. 3. Construction contracts. I. Gransberg, Douglas D. II. Molenaar, Keith R. 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ISBN 978-0-7844-1075-2 Manufactured in the United States of America. 18 17 16 15 14 13 12 11 10 1 2 3 4 5 Contents Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix by Peter Beck Preface. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi ONE INTRODUCTION TO DESIGN-BUILD PROJECT ADMINISTRATION 1 Design-Build Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Summary of Recent Design-Build Research. . . . . . . . . . . . . . . . . . . . 4 Design-Build versus Design-Bid-Build: What Is Different . . . . . . . . . . 9 The Design-Build Project Team. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Identifying the Preeminent Factor for Using Design-Build . . . . . . . . 27 Partnering the Design-Build Contract after Award. . . . . . . . . . . . . . . 29 Design-Build Success Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 TWO SCHEDULING DESIGN-BUILD PROJECTS 37 Analyzing Contract Schedule Requirements. . . . . . . . . . . . . . . . . . . 39 Design-Build Scheduling Conference. . . . . . . . . . . . . . . . . . . . . . . . 42 DB Schedule Imperatives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 THREE DESIGN ADMINISTRATION IN DESIGN-BUILD 65 Changing the Design Administration Culture. . . . . . . . . . . . . . . . . . 66 Design Personnel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Integrating Contract Design Input. . . . . . . . . . . . . . . . . . . . . . . . . . 75 Design-Build Charettes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Performance Criteria Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . 85 Design Submittals and Reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 Drawing Numbering System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 vv vi Project Administration for Design-Build Contracts FOUR DESIGN QUALITY MANAGEMENT IN THE DESIGN-BUILD PROJECT 97 Design-Build Quality Assurance Model . . . . . . . . . . . . . . . . . . . . . . 98 Design Quality Defined. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 The Economics of Quality in the Design Phase. . . . . . . . . . . . . . . . 118 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 FIVE DESIGN ADMINISTRATION CASE STUDIES 149 Case 5-1: “When Is Design ReallyDesign?” . . . . . . . . . . . . . . . . . . 149 Case 5-2: “Actions Speak Louder Than Words.”. . . . . . . . . . . . . . . . 152 Case 5-3: “The Growing Design”. . . . . . . . . . . . . . . . . . . . . . . . . . 154 Case 5-4: “All the Right Moves” . . . . . . . . . . . . . . . . . . . . . . . . . . 157 Case 5-5: “Keep Looking until You Find the RightAnswer.”. . . . . . . 159 SIX CONSTRUCTION QUALITY MANAGEMENT IN THE DESIGN-BUILD PROJECT 163 Construction Quality Defined . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166 Owner’s Role in Defining Construction Quality Requirements. . . . 168 The Economics of Quality in the Construction Phase. . . . . . . . . . . 172 Construction Quality Management Planning . . . . . . . . . . . . . . . . . 176 Verification and Acceptance Testing . . . . . . . . . . . . . . . . . . . . . . . . 183 Post-Award Construction Quality Plans . . . . . . . . . . . . . . . . . . . . . 185 Construction Quality Personnel Requirements. . . . . . . . . . . . . . . . 186 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 SEVEN DESIGN-BUILD CHANGE ORDERS 191 Design-Build Change Order Entitlement . . . . . . . . . . . . . . . . . . . . 194 Design-Build Change Management . . . . . . . . . . . . . . . . . . . . . . . . 196 Design-Build Change Order Process during Design . . . . . . . . . . . . 200 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 EIGHT PROGRESS PAYMENTS DURING DESIGN AND CONSTRUCTION 219 Payment for Design Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 Retainage and Final Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230 Limitation on Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235 Incentive Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240 Design-Build Project Cost Control. . . . . . . . . . . . . . . . . . . . . . . . . 248 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253 NINE CONSTRUCTION ADMINISTRATION CASE STUDIES 255 Case 9-1: “Trust Me. I Know This Will Work.” . . . . . . . . . . . . . . . . 255 Case 9-2: “The Winning Inspector Is . . .” . . . . . . . . . . . . . . . . . . . . 257 Case 9-3: “If You Have Never Seen It, You Will Never Want It.”. . . . 258 Case 9-4: “Were You Really Sure You Were Ready for This Project?” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261 Case 9-5: “Whom Are You Trying to Satisfy?”. . . . . . . . . . . . . . . . . 264 Contents vii Appendix A: Implementing Building Information Modeling in Design-Build Projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267 by Tamera L. McCuen Appendix B: Implementing Sustainability in Design-Build Projects . . . . . . . . . . . 273 by Lee A. Fithian Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281 About the Authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285 This page intentionally left blank Foreword I am both pleased and honored to be invited to write a foreword for a book on the topic of design-build contract administration. This type of book has been a long time in coming and provides much-needed guidance for both design-builders and—more importantly—our valued clients. I have had the pleasure of knowing Doug Gransberg for years through The Beck Group’s involvement with the Uni- versity of Oklahoma’s Construction Science Division, where we have found many of our best employees. Doug’s program has been one of a few that seeks to prepare entry-level designers and constructors with the skill set to be successful as inte- grated design-builders. We have also employed him as a design-build consultant to assist The Beck Group’s efforts to better understand federal government opportu- nities.I have always found his in-depth and practical understanding of design-build to be unique, refreshing, and informative. I know Doug’s co-authors, Keith Molenaar and Jim Koch,by reputation and through our mutual involvement in the Design- Build Institute of America. A book by this trio of experienced design-build researchers, practitioners, and consultants is written from a deep well of experi- ence. Keith Molenaar was the first researcher in the nation to tackle this emerging area in the early 1990s, and Jim Koch worked with Doug in their previous careers in the U.S. Army Corps of Engineers, where they pioneered the Corps’s design- build program. He has spent the subsequent years putting his experience to work for the nation’s benefit as a director of the Rebuild Iraq program. Thus, the infor- mation contained in this book has literally been tested in the most challenging project delivery environments. This is the opportune time for all practitioners to develop a keen understanding ofthe design-build delivery method. Up until now, too many design-build projects either appear to have been designed by the contractor or fail to embrace the unique opportunities to integrate the disciplines. We must learn to build upon our knowl- edge of the process on a project-by-project basis and ultimately consider marrying the disciplines within the same firm in order to amortize investments in technol- ogy, cross-training, cross-disciplinary processes, and so on over many projects. The ix