A_0509_ATW_DesignBuild_Contracts

New Design-Build Model Contracts Raise the Bar

May 13, 2009

The Design-Build Institute of America (DBIA), the leading advocate and resource center for design-build industries, released new design-build model contracts on May 7. The new documents build on DBIA’s first edition of model contracts released in 1999, but recognize that design-build participants need to be provided more flexibility, and that a “one-size” contract can’t fit all situations. The initial release will focus on the owner and design-builder documents, including Lump Sum Agreement, Cost Plus with an Option for a GMP Agreement, and General Conditions. DBIA plans to release new subcontractor and design consultant agreements this fall.

“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 [the] industry has a much better understanding of the keys to a successful design-build project,” says Tom Porter, DBIA national board chair. “In addition, a body of case law has evolved, addressing issues unique to the design-build delivery method. The time is ripe for DBIA to release its next generation of documents.”

The new documents adopt a menu approach that allows parties to customize contracts to their unique project, emphasizing that there’s more than one way to address a particular contractual issue. This menu approach will facilitate the process by which parties can address 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. DBIA has raised the bar: These new contracts also respond 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 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.

Advances in the industry over the past decade are also addressed, including sustainable design, building information modeling (BIM), 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.

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