DBIA - Design-Build Institute of America Design-Build Contracting Approaches Questions and Answers

Question 1

In a Progressive Design-Build (PDB) delivery model, when is the final contract price, such as a Guaranteed Maximum Price (GMP), typically finalized?

Accepted Answer

After the design is significantly advanced through collaboration between the owner and the design-builder.

Answer

Progressive Design-Build is a two-phase process. A design-builder is selected based on qualifications in Phase 1, and then collaborates with the owner in Phase 2 to advance the design. The final contract price (GMP or Lump Sum) is negotiated and finalized during Phase 2, once the scope and design are sufficiently developed to allow for reliable pricing.

Question 2

A design-build project is delivered under a Guaranteed Maximum Price (GMP) contract that includes a shared savings clause. If the final cost of the work is less than the GMP, how are the savings typically handled?

Accepted Answer

The savings are split between the owner and the design-builder according to a pre-negotiated formula.

Answer

A shared savings clause is a key feature of many GMP contracts that incentivizes the design-builder to find efficiencies. When the final project cost is below the GMP, the resulting savings are distributed between the owner and the design-builder based on a formula defined in the contract (e.g., 50/50, 70/30).

Question 3

An owner wants to build a standard data center with a very well-defined program and a low tolerance for cost overruns. The owner has developed detailed performance requirements and is confident in the project's scope. Which contracting approach would be most appropriate for this design-build project?

Accepted Answer

Lump Sum (Fixed Price).

Answer

A Lump Sum (or Fixed Price) contract is ideal when the project scope is clearly defined, allowing the design-builder to accurately price the work and assume the risk for cost overruns. This provides the owner with the cost certainty they desire from the outset.

Question 4

In a design-build contract with a Guaranteed Maximum Price (GMP), what is the primary purpose of the design-builder's contingency?

Accepted Answer

To cover costs from unforeseen conditions or trade contractor buyout risks within the defined scope.

Answer

The design-builder's contingency is a sum included within the GMP to cover risks and costs that the design-builder is responsible for, such as incomplete design details, trade contractor buyout issues, or minor coordination errors. Owner-directed scope changes are typically funded from a separate owner's contingency or reserve.

Question 5

Which of the following statements most accurately describes the primary contractual relationship in a design-build project?

Accepted Answer

The owner holds a single prime contract with one entity, the design-builder, who is responsible for both design and construction.

Answer

The defining characteristic of the design-build delivery method is the single contract (single point of responsibility) between the owner and the design-build entity. This entity then arranges for the design and construction services, either through in-house staff or subcontracts.

DBIA - Design-Build Institute of America Certification Practice Test

DBIA - Design-Build Institute of America Certification Practice Test

DBIA - Design-Build Institute of America Design-Build Contracting Approaches Questions and Answers