DBIA Design-Build Contracting Approaches Questions and Answers 2

Question 1

In a design-build Guaranteed Maximum Price (GMP) contract, what typically happens when actual costs come in below the GMP?

Accepted Answer

The savings are split between the owner and design-builder per contract terms

Answer

Most GMP contracts include a shared savings clause where cost underruns are split between the owner and design-builder according to pre-negotiated percentages, incentivizing cost efficiency.

Question 2

Which contract type places the most financial risk on the design-builder?

Accepted Answer

Lump sum/fixed price

Answer

A lump sum or fixed-price contract requires the design-builder to complete the project for a set amount regardless of actual costs, placing maximum financial risk on the design-builder for cost overruns.

Question 3

What is a key advantage of using a cost-plus contract with a Guaranteed Maximum Price in design-build?

Accepted Answer

It provides cost transparency while capping the owner's maximum financial exposure

Answer

A cost-plus with GMP contract gives the owner visibility into actual costs through open-book accounting while establishing a price ceiling, balancing transparency with financial protection.

Question 4

In design-build contracting, what does 'bridging' refer to?

Accepted Answer

Owner-prepared design documents that define project requirements before selecting a design-builder

Answer

Bridging involves the owner hiring a separate architect or engineer to prepare preliminary design documents that define performance requirements and design intent, which then serve as the basis for the design-build RFP.

Question 5

What is the primary distinction between a design-build contract with a stipulated sum and one with a GMP?

Accepted Answer

In a stipulated sum the owner pays exactly that amount regardless of actual costs; in a GMP the owner pays actual costs up to the maximum

Answer

A stipulated sum means the price is fixed and the design-builder absorbs any cost variations, while a GMP means the owner pays actual costs (with fee) up to the ceiling price, often with shared savings below the GMP.

DBIA - Design-Build Institute of America Certification Practice Test

DBIA - Design-Build Institute of America Certification Practice Test

DBIA Design-Build Contracting Approaches Questions and Answers 2