DBIA Design-Build Contracting Approaches Questions and Answers 3

Question 1

What role does the design-build entity's contingency serve in a GMP contract?

Accepted Answer

It provides a buffer for unforeseen costs within the design-builder's scope that keeps the project within the GMP

Answer

It covers the owner's change orders only

Answer

It replaces the need for performance bonding

Answer

It is refunded to the owner at project completion

Question 2

How does a design-build wrap-up insurance program (OCIP/CCIP) differ from traditional project insurance?

Accepted Answer

It provides a single consolidated insurance policy covering all project participants instead of each carrying separate policies

Answer

It covers only the design professional's errors and omissions

Answer

It is only available for federal projects

Answer

It eliminates the need for workers' compensation coverage

Question 3

What is a 'not-to-exceed' (NTE) price in design-build contracting?

Accepted Answer

A preliminary price ceiling established early in the project before a formal GMP is set

Answer

The minimum fee the design-builder will accept

Answer

The total cost of owner-directed changes

Answer

A penalty threshold for schedule delays

Question 4

In a design-build contract, what is the significance of the 'basis of design' documents?

Accepted Answer

They define the design standards, assumptions, and criteria that the design-builder used to establish their price and approach

Answer

They are the final construction drawings

Answer

They replace the need for building permits

Answer

They are only required for public sector projects

Question 5

Why might an owner choose to include an early work package in a design-build contract?

Accepted Answer

To allow critical-path construction activities to begin before the entire design is finalized, compressing the overall schedule

Answer

To delay the start of construction until full design is complete

Answer

To reduce the design-builder's fee

Answer

To eliminate the need for building permits

Question 6

What is the primary purpose of including a 'design completion' requirement in a design-build contract?

Accepted Answer

To establish the minimum level of design development required before construction pricing or GMP establishment

Answer

To ensure the design-builder hires only licensed architects

Answer

To transfer all design liability to the owner

Answer

To eliminate the need for shop drawings