Keith Molenaar, dean of the University of Colorado Boulder’s College of Engineering and Applied Science, presented highlights of the ACEC Research Institute’s study performed in partnership with the university at ACEC’s Fall Conference in Colorado Springs. Molenaar explained that while design-build (DB) projects have grown 84 percent over the past five years, the study found significant concern with larger infrastructure projects which could impact the success of the investments under the Infrastructure Investment and Jobs Act, also called the bipartisan infrastructure law.
Molenaar discussed how “data from larger design-build projects brought to light a clear imbalance in risk transfer practices, as evidenced by claims, disputes, litigation, liability gaps, and surging insurance costs.” Furthermore, “design firms should seek to create long-term partnerships...to improve risk transfer and project harmony.”
The White House cited the Institute study in the Action Plan to Accelerate Infrastructure fact sheet, which was unveiled in October during the Accelerating Infrastructure Summit. The event brought industry leaders together to discuss efficient implementation of the bipartisan infrastructure law. According to the White House, “about 90 percent of bipartisan infrastructure law funds will be delivered by nonfederal partners, who have worked closely with federal agencies to revitalize our nation’s infrastructure.”
The study, Design-Build State of Practice, was designed as a three-step approach to assess challenges and opportunities present in DB projects, in contrast to other delivery systems such as Design-Bid-Build (DBB) or the newer Progressive Design-Build (PDB) delivery. Data was gathered from 155 ACEC member firms of various sizes participating in designbuild projects across diverse U.S. market sectors. Project performance data was obtained from 105 completed DB projects of various sizes delivered in the U.S. Sixteen interviews from the best- and worst-performing projects were conducted for inclusion and analysis in the study.
Molenaar recommended that owners and firms “clearly understand the risk allocation” to benefit all project participants. It means “engineering firms should perform rigorous contract risk reviews when choosing whether to participate in a DB project,” and owners should use unique DB programs or approaches, separate and distinct from DBB or other project delivery methods. Insurance requirements should be top of mind to mitigate the risk to all project participants, and on larger, high-risk projects, all firms should have candid conversations with owners and contractors to discuss the value and applicability of Project Specific Professional Liability (PSPL) policies which are becoming increasingly difficult to obtain and expensive if available. “Education and collaboration with owners regarding these implications becomes central to leading to future success,” he said.
Because of the necessity for transparency early in the project decision-making process, Molenaar emphasized that having well-integrated DB teams “significantly improves risk transfer and project harmony.” And “design firms should cautiously consider participating on large mega projects where, due to sheer size, the use of one-time project joint ventures are formed with limited existing relationships and trust at the onset of the project,” he said.
ACEC Research Institute leaders hope the findings illuminate trend data and best practice guidelines for DB project delivery. Molenaar believes this “will help engineers deliver projects more effectively, avoid many of the pitfalls, and capture the advantages that design-build can offer.”
To download the full report: https://program.acec.org/2022-design-build-study.