Board Reflections

Ten years ago DBIA rolled out the first edition of its family of design-build contract documents. They were shaped by three guiding principles:

1. Employ a modern risk allocation approach that distributed risk to the design-build participant best able to manage a particular risk in the most cost effective manner.
2. Create a process-oriented document that recognizes that success of design-build contracting is dependent on establishing the necessary processes to ensure the delivery of a project that satisfies the owner’s project criteria consistent with the contract price and schedule.
3. Create a user-friendly document that was easy to read (short on legalese) and could be used on various types of design-build projects.

Over the years, these DBIA documents have been enthusiastically embraced by owners, design-builders, subcontractors and design professionals alike. There is no doubt that DBIA documents have raised the bar for other design-build standard form contracts.

Documents drafted by other industry groups subsequent to the release of the DBIA documents have adopted a drafting philosophy similar to DBIA. Significantly, these documents represent a dramatic improvement over earlier design-build documents developed by these other industry groups. All of this has been great for the industry.

In the 10 years since the first edition of the DBIA documents were released, the design-build industry has grown by leaps and bounds. The number of owners employing the design-build delivery method has exploded, and all design-build participants have significantly more experience and a much better understanding of the keys to a successful design-build project. In addition, a body of case law has evolved addressing issues unique to the design-build delivery method. As such, the time is ripe for DBIA to release its next-generation of documents. The new generation of documents builds on the original documents. The drafting philosophy remains the same, but the new documents recognize that design-build participants need to be provided more flexibility since a one size contract cannot possibly fit all situations.

Accordingly, the new documents adopt a menu approach that allows parties to customize contracts to their unique project. This will further allow parties to understand that there is more than one way to address a particular contractual issue, whether it is, for example, a time-related provision or a provision dealing with the ownership of documents. At the very least, this menu approach will encourage the parties to discuss difficult contractual issues at the outset of their relationship and arrive at a contract tailored to the unique project and each party’s risk tolerance.

The new generation of documents also responds to some of the more contentious issues that have arisen over the last 10 years in the design-build industry. For example, the new contracts better address “scope of work” issues by developing a more comprehensive framework to ensure that the owner’s and design-builder’s expectations on scope are more closely aligned. They address — head-on — an owner’s use of prescriptive specifications in its project criteria in a manner consistent with case law that has developed over the last 10 years.

The new documents also address advances in the industry that either did not exist 10 years ago or were just in their infancy. Thus, the documents will address sustainable design, building information modeling and electronic data. In addition, the documents provide parties with an insurance matrix that will help guide them — in consultation with their insurance brokers — on their insurance needs.

As far as the roll-out process is concerned, DBIA plans to publish its new family of owner and design-builder documents this spring. This includes Document 525 (Lump Sum Agreement), Document 530 (Cost Plus with an Option for a GMP Agreement), and Document 535 (General Conditions).

Upon their release, we will then turn our attention to the Subcontractor and Design Consultant agreements. Initial drafts of the owner and design-builder documents were first discussed at the 2008 Design-Build Conference & Expo in Las Vegas. Since that time, input has been solicited from the DBIA membership. Comments have been received and are presently under consideration by the expanded Contracts Committee.

Finally, I would be remiss if I did not thank the original members of the Contracts Committee — Michael Loulakis, Robynne Parkinson, Bill Quatman and Evan Caplicki, who have all volunteered a considerable amount of their time and have worked tirelessly for the purpose of developing the most progressive, practical and beneficial design-build industry documents.

Happy and healthy New Year to all.