DBIA Risk Management and Allocation 3

Question 1

A design-build team discovers previously unknown underground utilities during excavation. Under a well-drafted contract, this risk is most likely classified as:

Accepted Answer

An owner-retained subsurface risk eligible for a contract adjustment

Answer

Unknown subsurface utilities are typically owner-retained risks in well-drafted design-build contracts, entitling the design-builder to a contract adjustment.

Question 2

Which DBIA risk allocation strategy specifically addresses situations where neither party can control a risk, such as extreme weather?

Accepted Answer

Shared risk or force majeure provisions

Answer

Force majeure provisions address uncontrollable events like extreme weather by providing relief to the affected party without fault allocation.

Question 3

When evaluating a design-build proposal, the owner's risk assessment should consider which financial metric to gauge the design-builder's ability to absorb project risks?

Accepted Answer

Bonding capacity and financial strength

Answer

Bonding capacity and financial strength indicate whether the design-builder can absorb and recover from risk events without defaulting.

Question 4

In a design-build project using a Guaranteed Maximum Price (GMP), what happens to cost savings if the project comes in under the GMP?

Accepted Answer

Savings are shared according to the contract's shared savings provision

Answer

Under a GMP with a shared savings provision, cost savings below the guaranteed maximum are split between the owner and design-builder per the contract terms.

Question 5

Which type of project delivery risk is MOST effectively mitigated by early and frequent owner-design-builder communication during design development?

Accepted Answer

Scope creep and design evolution risk

Answer

Early and frequent communication between the owner and design-builder is the most effective mitigation for scope creep and design evolution risk.

DBIA - Design-Build Institute of America Certification Practice Test

DBIA - Design-Build Institute of America Certification Practice Test

DBIA Risk Management and Allocation 3