Owners Can Retain Control in Design-Build Projects

by Peter A. Cannito and Michael L. Sickenius

The notion that the design-build method leaves owners out of the loop on projects is invalid. While it offers somewhat less control, the potential benefits can make the method the right choice for owners.

An article in the September issue of New York Construction regarding design-build programs included statements from one person who said: "The owner relinquishes control. There's no advocate for the owner. No one is watching out for the owners' concerns."

That hasn't been the experience of the Metropolitan Transportation Authority's Metro-North Railroad and doesn't have to be for other owners either. Metro-North has experienced great success with its design-build programs. Although an owner's control may be reduced with design-build programs, the reduction is not significant considering the benefits.

Metro-North still has mandated criteria, including guidelines, standards, budgets, and schedules that are all closely monitored for contract compliance - proof that an owner can put numerous checks and balances in place to ensure that design-build projects are completed to high standards.

An owner's control over a design-build project actually takes shape when it establishes the bid selection criteria. The owner can set up a weighted-criteria evaluation based on a combination of low-cost and high technical-skills ratings. The public owner in particular ends up with more control using this method than in design-bid-build procurement, where the lowest responsible bidder is awarded the job.

The owner also manages and controls the development of the contract specifications and identifies critical elements that are project-specific. If warranted, the owner can even bring certain elements to 100 percent design prior to handing off the documents to a design-builder, such as railroad safety requirements, government executive orders, electrical systems, fire codes, and track and building standards.

During the design phase, the owner also has the opportunity to accept or reject nonstandard plans presented by the design-builder. The owner also reviews the design-builder's drawings for conformance to the contract requirements prior to construction.

Once construction begins, the owner or its representative still can perform inspections to be sure all work conforms to the intent of contract documents, is taking place in a safe manner, and meets quality standards. In addition, the owner reviews monthly payment requisitions submitted by contractors, and prior to making any payment, it can inspect the project to ensure that completed work is free of defects and fits the intended purpose.

The design-builder furthermore has numerous obligations to an owner throughout the project under the Design-Build Institute's general condition of contract form, such as:

• owner review and approval of interim design submissions in a timely fashion to ensure contract compliance, including design criteria, drawings, diagrams, and other specifications
• corrective action by the design-builder within seven days of written notice from the owner that work does not conform to the contract
• owner oversight of safety requirements
• owner role in obtaining permits and licenses
• owner approval of delay justification
• owner approval before the start of any extra work that changes contract price or schedule
• owner notification if a design-builder determines any contract work is no longer required.

The American Council of Engineering Companies recommends that an owner and design-builder maintain effective communication and interaction. That approach is part of Metro North's philosophy, which guarantees our interests are addressed throughout a project.

Metro North also recognizes that relinquishing control in some areas is necessary to support the design-build methodology. An example of where the agency does relinquish control is by having a single source of responsibility for both design and construction.

In conventional delivery methods, the owner spends endless hours aligning the designer and contractor to share a common goal in order to successfully complete the project - a costly process. Under design-build, the owner does not have to act as a referee between the contractor and designer, because those two players formed the team that came together and have a vested interest in being partners.

Everyone involved in a project must be held accountable. Giving all parties "control" of their responsibilities, including the owner, ensures such accountability. That framework is what makes design-build a successful tool.

Peter Cannito, left, is president and Michael Sickenius is director of shops, yards, and environment for the Metropolitan Transportation Authority's Metro-North Railroad.