DBIA Design-Build Contracting Approaches 5 — Questions and Answers
Question 1: Under a design-build GMP contract, 'contingency' held within the GMP by the design-builder is intended to cover:
- Owner-directed scope changes
- Design-builder's risks within the defined scope, such as estimating uncertainty (Correct answer)
- Differing site conditions
- Force majeure events
Correct answer: Design-builder's risks within the defined scope, such as estimating uncertainty
Design-builder contingency within the GMP covers the design-builder's own risk items like incomplete design pricing uncertainty, not owner-initiated changes or external risks.
Question 2: In design-build contracting, a 'notice to proceed with design' (NTP-Design) issued before a full GMP is established is characteristic of which delivery approach?
- Fixed-price lump sum design-build
- Progressive design-build (Correct answer)
- Competitive sealed design-build
- Bridging design-build
Correct answer: Progressive design-build
Progressive design-build starts design work under an initial authorization before price is fully established, allowing the GMP to be negotiated as design advances.
Question 3: Which of the following best describes 'scope creep' risk in design-build contracts and how it is typically addressed?
- Scope creep is eliminated because design-builders control all design decisions
- Scope creep is managed through a clear owner's criteria baseline and formal change order process for deviations (Correct answer)
- Scope creep only affects cost-plus contracts, not lump sum
- Scope creep is the owner's sole responsibility under all contract types
Correct answer: Scope creep is managed through a clear owner's criteria baseline and formal change order process for deviations
Well-defined owner's criteria establish the original scope baseline, and a disciplined change order process captures and prices any deviations from that baseline.
Question 4: A design-build contract's 'warranty' provision most commonly requires the design-builder to:
- Guarantee zero defects for the lifetime of the facility
- Correct defective work discovered within a specified period after substantial completion (Correct answer)
- Provide a manufacturer's warranty on all installed equipment only
- Warrant the owner's operational procedures are correct
Correct answer: Correct defective work discovered within a specified period after substantial completion
Standard design-build warranty provisions obligate the design-builder to repair or replace defective work identified within a defined post-completion warranty period, typically one year.
Question 5: In a design-build project, when an owner issues a 'Request for Information' (RFI) to the design-builder, it differs from traditional RFIs because:
- RFIs do not exist in design-build contracts
- The design-builder must resolve the issue internally rather than routing it to a separate design team (Correct answer)
- The owner must pay a fee for each RFI response
- RFIs automatically trigger change orders in design-build
Correct answer: The design-builder must resolve the issue internally rather than routing it to a separate design team
Since the design-builder is responsible for both design and construction, they resolve most coordination issues internally without needing the owner to mediate between separate designer and contractor parties.
Question 6: The 'stipulated sum' payment structure in design-build is most suitable for projects where:
- Scope is highly uncertain and design is incomplete at contract award
- Scope is well-defined through owner's criteria, allowing reliable pricing by proposers (Correct answer)
- The owner wants to control all design decisions
- Construction is expected to take more than five years
Correct answer: Scope is well-defined through owner's criteria, allowing reliable pricing by proposers
A stipulated sum requires sufficient project definition so proposers can accurately price the work; it is inappropriate when scope uncertainty is high.
Question 7: Which of the following statements about design-build subcontractor procurement is MOST accurate?
- Design-builders are always required to competitively bid all subcontract work
- Design-builders typically have flexibility to select subcontractors, though some owners require transparency or competition (Correct answer)
- Owners select all subcontractors in design-build projects
- Subcontractors in design-build have a direct contract with the owner
Correct answer: Design-builders typically have flexibility to select subcontractors, though some owners require transparency or competition
Design-builders generally control subcontractor selection as part of their single-point responsibility, though owner requirements for open-book pricing or competitive bidding may be contractually included.
DBIA Design-Build Contracting Approaches 5
Under a design-build GMP contract, 'contingency' held within the GMP by the design-builder is intended to cover: