DBIA - Design-Build Institute of America Risk Management and Allocation Questions and Answers

Question 1

According to DBIA's principles of risk allocation, how should the risk of unforeseen subsurface conditions be handled when the owner possesses but does not disclose a preliminary geotechnical report?

Accepted Answer

The owner retains the risk, as they are in the best position to manage it by providing known information.

Answer

The risk is shared proportionally between the owner and the design-builder.

Answer

The design-builder assumes the entire risk as part of the single-point responsibility.

Answer

The risk is transferred to the geotechnical engineer who created the report.

Question 2

In the design-build context, the legal precedent known as the Spearin Doctrine, which traditionally holds the owner liable for defective plans and specifications, is fundamentally altered. How does design-build reallocate this risk?

Accepted Answer

The design-builder assumes the risk for the adequacy and accuracy of the design to meet the owner's performance requirements.

Answer

The doctrine is voided, and any design liability is waived by all parties.

Answer

The owner retains full liability for the initial bridging documents, and the design-builder is liable for all subsequent design.

Answer

The risk is transferred to a third-party insurance carrier, absolving both the owner and design-builder.

Question 3

An owner establishes a project budget that includes both the design-builder's contract price and a separate owner's contingency. According to DBIA best practices, what is the appropriate use for the owner's contingency?

Accepted Answer

To fund owner-directed scope changes or deal with risks explicitly retained by the owner.

Answer

To cover cost overruns caused by the design-builder's inefficient management.

Answer

To pay for design development costs incurred by the design-builder before contract execution.

Answer

To be used as a bonus for the design-builder if the project is completed ahead of schedule.

Question 4

During a design-build project, a nationwide shortage of a specified cost-effective material arises, threatening the schedule. Which of the following actions best demonstrates a proper collaborative approach to managing this risk?

Accepted Answer

The integrated project team (owner and design-builder) collaborates to evaluate alternative materials, weighing cost, schedule, and life-cycle impacts to find a mutually acceptable solution.

Answer

The owner directs the design-builder to absorb all costs associated with the delay and sourcing a more expensive alternative.

Answer

The design-builder immediately substitutes a lower-quality material to stay on budget without consulting the owner.

Answer

The design-builder stops all work and initiates a formal claim against the owner for unforeseen market conditions.

Question 5

Which of the following represents a significant misallocation of risk that contradicts the principles of 'Design-Build Done Right®'?

Accepted Answer

The contract requiring the design-builder to assume liability for all unforeseen site conditions without providing any preliminary site information.

Answer

The owner retaining the risk for hazardous material abatement if discovered on site.

Answer

The design-builder accepting schedule risk associated with coordinating its design and construction activities.

Answer

The contract allocating the risk of obtaining standard building permits to the design-builder.

Question 6

A key risk management benefit of the single contract in design-build is the elimination of disputes between the designer and the contractor. How does this benefit the owner?

Accepted Answer

It prevents the owner from being responsible for adjudicating conflicts over design errors or constructability issues.

Answer

It guarantees that the project will have no change orders.

Answer

It allows the owner to dictate the means and methods of construction directly to subcontractors.

Answer

It transfers all financial risks, including project funding and interest rate fluctuations, to the design-builder.