Chief Legal Counsel, OSFC DB Contract Documents Lane Beougher State Architect Jerry Kasai Chief Legal Counsel, OSFC

Design-Build Contracts Outline Basic Design-Build Concepts Benefits of Design-Build? State of Ohio contract v. industry contracts? The Public Authority’s team, including the Criteria A/E, and their roles? The Design-Builder’s team and their roles?

The Design-Builder Single entity that integrates the design and construction of a construction project “Integration” of design and construction is key to success

Design-Build Law ORC 4703.182 (C)(2) “Design-build” means a project delivery system for improvements to real property by which a person is solely responsible contractually as a contractor to an owner for both the design and construction of the improvement, which design and construction may include a performance-based specification established by the owner rather than a specific design as an improvement goal. (11-24-1985)

Design-Build Law ORC 4703.182 (A) Notwithstanding any other provision of this chapter, any person who performs labor or who provides services pursuant to a construction contract may offer or provide architectural services in connection with the person’s own labor or services if all of the following apply:

Design-Build Law ORC 4703.182 (1) The architectural services are provided and performed by an architect registered under this chapter or by a firm holding a certificate of authorization granted pursuant to this chapter through either direct employment or independent contract with the person contracting with the owner and offering the services.

Design-Build Law ORC 4703.182 (2) The architectural services are offered by the person who intends to perform the actual construction of an improvement to real property as part of a design-build contract.

Design-Build Law ORC 4703.182 (3) The contractor, the architect registered under this chapter, or the firm holding a certificate of authorization granted pursuant to this chapter meets the requirements of section 153.70 of the Revised Code when design-build services are provided to a public authority as defined in section 153.65 of the Revised Code.

Design-Build Law OAC 4703-3-12 (A) An architect may provide design services in a design-build contractual relationship provided the architect: (1) Is an architect licensed to practice in the State of Ohio or represents an architectural firm authorized to provide architectural services in the State of Ohio, and

Design-Build Law OAC 4703-3-12 (2) Assures a written disclosure has been given to the client by the entity identifying the architect or architectural firm engaged by and contractually responsible to, the entity offering design-build project services, and

Design-Build Law OAC 4703-3-12 (3) Assures the entity agrees that the architect will have direct supervision of the architectural work and that the architect’s services will not be terminated on the project, without the immediate replacement by another architect.

Design-Build Law OAC 4703-3-12 (B) A design-build entity shall not offer to provide or provide architectural services, unless the design-build entity is, or independently contracts with, an architect practicing as a sole proprietorship, an architectural firm holding a certificate of authorization to provide architectural services as set forth in Chapter 4703.18 of the Revised Code or employs one or more architects authorized to provide architectural services.

Basic Design-Build Concepts Pros Single point of responsibility for owner Faster completion than Design-Bid-Build Good cost control Early negotiation of guaranteed maximum price Good process for complex projects Owner sees design concepts from multiple teams

Basic Design-Build Concepts Cons Less owner influence during design Costly for unsuccessful Design-Build teams Less owner control after Design-Build team selected

Benefits of Design-Build Comparison of U.S. Project Delivery Systems (Construction Industry Institute / Penn State University Study) Metric DB vs. D-B-B CMR vs. D-B-B DB vs. CMR Unit Cost ($/SF) 6.1% lower 1.6% lower 4.5% lower Construction Speed 12% faster 5.8% faster 7% faster Delivery Speed 33.5% faster 13.3% faster 23.5% faster Cost Growth 5.2% less 7.8% more 12.6% less Schedule Growth 11.4% less 9.2% less 2.2% less “Comparison of U.S. Project Delivery Systems,” Mark Konchar & Victor Sanvido, Journal of Construction Engineering and Management, Vol. 124, No. 6 (1998), pp. 435-444.

Benefits of Design-Build How does Design-Build reduce cost? Design decisions are guided by the entity guaranteeing the price: At preliminary stage, the builder is part of the design process. Price is now guaranteed by both designer and builder.

Benefits of Design-Build How does Design-Build reduce cost? Design decisions (cont’d) Builder has control over design to manage price. Designer has direct cost feedback, rather than simply depending on estimates.

Benefits of Design-Build How does Design-Build shorten schedule? Design and construction happen concurrently: No longer is design completed prior to any construction activity, such as mobilization. Long lead items may be ordered in advance, while design integration takes place.

Benefits of Design-Build How does Design-Build shorten schedule? Design and construction (cont’d) Field decisions and coordination time is reduced because of mutual incentives. Project close-out activities are concurrent rather than sequential.

Benefits of Design-Build How does Design-Build improve quality? Risk and liability structure of the delivery contract is completely realigned: No longer do you have two contracts, there is only one contract with the Design-Builder.

Benefits of Design-Build Risk and liability structure (cont’d) The Design-Builder is liable for design negligence. The Design-Builder is liable for means and methods and construction negligence. The Design-Builder is responsible for operation and maintenance performance, warranties, and as-built documentation.

Differences in Construction Reform Design-Build & Private Industry Process Pre-qualifications

Differences in Construction Reform Design-Build & Private Industry Process Best Value

Differences in Construction Reform Design-Build & Private Industry Process Guaranteed Maximum Price

Differences in Construction Reform Design-Build & Private Industry Process Criteria Architect Criteria Architect

State of Ohio Design-Build Contract Agreement Form Performance Bond Form Payment Bond Form GMP Amendment

State of Ohio Design-Build Contract Contracting Definitions General Conditions Supplementary Conditions State of Ohio Subcontract Form

State of Ohio Design-Build Contract Based on CMR Contract except: Design services scope for A/E of Record (AOR) DB secures plan approval and storm water permit (documents sealed by AOR)

State of Ohio Design-Build Contract Based on CMR Contract except (cont’d) Design services fee (separate from preconstruction services fee) Professional design liability insurance required for A/E of Record Limited role of Criteria A/E during construction

Other Design-Build Contracts AIA Contract Documents (A141) American Institute of Architects ConsensusDOCS (410) ConsensusDOCS, LLC (Primary Sponsor: AGC)

Other Design-Build Contracts DBIA Contract Documents (530 + 535) Design-Build Institute of America EJCDC Contract Documents (D525 + D700) Engineers Joint Contract Documents Committee

Role of the Criteria A/E Public Authority’s Project Team Project Manager (Contracting Authority) Owner’s Representative (Owner) Criteria Architect/Engineer (Criteria A/E) Retained by the Public Authority per ORC 153.65 through 153.70 (QBS) or is an employee thereof

Role of the Criteria A/E Preconstruction Services (Article 5) Verify or Develop Program of Requirements Validate Project Scope, Budget, and Schedule Develop Project Definition and Criteria Assist development of Request for Qualifications Ensure design is compliant with the design criteria and owner requirements

Role of the Criteria A/E Construction and Closeout (Article 6) Ensure construction is compliant with the design criteria and owner requirements Certify payment requests are commensurate with extent of completed Work Manage quality testing and special inspections Provide analysis of claims Assist the owner review the Design-Builder’s punch list and perform final inspection

Construction Administration Roles Section Topic CMR Contract* DB Contract* 5.8.1 Secure Plan Approval A/E DB (AOR seals plans) 5.8.4 Secure Storm Water Permit 6.9 Special Inspection (Ch. 17) A/E (Cont. Auth.) Cont. Auth. (Crit. A/E) Structural Testing A/E (CMR) DB (Crit. A/E) 6.10.2 Request for Interpretations 6.21 Review Action Submittals 6.23 Direct Uncovering the Work 6.27.2 Conduct Punchlist Review “Primary responsibility listed first with secondary responsibility listed in parentheses (if requested)

Construction Administration Roles Section Topic CMR Contract* DB Contract* 6.30 Certify Contract Completion A/E Cont. Auth. (Crit. A/E) 7.2 Prepare Change Orders 7.3.1 Prepare Proposal Requests 7.4 Prepare Change Directives A/E (Cont. Auth.) 7.5 Direct Minor Changes 7.6 Review Differing Conditions Crit. A/E 8.8 Provide Analysis of Claims 9.2.9.2 Certify Payment Requests “Primary responsibility listed first with secondary responsibility listed in parentheses (if requested)

The Design-Build Team Determining Team Members Establishing Ground Rules Intangibles Establishing trust Getting the right people on the bus

The Design-Build Team Goal Communication Collaboration Integration

Design-Build Team Structure Integrated firm A firm with design and construction capability Joint venture A/E and contractor form a legal partnership Contractor led team Contractor engages A/E as design consultant Designer led team A/E engages contractor to perform Work

CONSULTING ENGINEERS Various Integrated Firm OWNER DESIGN /BUILDER in-house design + construction staff PROJECT MANAGER (in-house or subcontracted) CONSULTING ENGINEERS Various SUBCONTRACTORS SUPPLIERS

Joint Venture OWNER JOINT VENTURE (A/E + Contractor) ARCHITECT/ENGINEER CONTRACTOR CONSULTING ENGINEERS Various SUBCONTRACTORS SUPPLIERS

Contractor Led OWNER DESIGN /BUILDER (Contractor) SUBCONTRACTORS Various ARCHITECT CONSULTING ENGINEERS Various

Architect/Engineer Led OWNER DESIGN /BUILDER (Architect/Engineer) CONSULTING ENGINEERS Various CONTRACTOR SUBCONTRACTORS Various SUPPLIERS Various

Design-Build Team Structure 1. Contractor Led: 49% 2. Integrated Firm: 24% 3. Designer Led: 24% 4. Joint Ventures: 3% 2005 Study by the Design-Build Institute of America (DBIA)

DB Contract Documents Questions: Lane J. Beougher State Architect lane.beougher@das.state.oh.us Jerry Kasai Chief Legal Counsel jerry.kasai@osfc.ohio.gov