D-B and P3s: Design Professionals Do Have Choices!
With much of the discussion of D-B and P3s frequently focused on the risks and liabilities associated with these methods, the discourse can often feel negative, leaving at least some of you thinking and asking:
“If D-B and P3s represent the dominant present and future trends for infrastructure projects and potentially other, vertical projects – are they, in reality, positive developments for design professionals and do I or my firm want to be a part of those trends, and do we actually have a choice? If we do choose to be a part of those trends, how should we go about it?”
These are fundamental, important and thoughtful questions that should be asked in charting responsible present and future directions in your professional practice.
Despite the “prince of darkness” discourse surrounding the D-B and P3 building methods, there are in fact positive aspects of the discussion. D-B and P3 also represent substantial opportunities and profit potential for firms that are selective and prudent in their project selection, teaming relationships, and contractual risk management participation.
The conversation on risks and liabilities is not intended to detract from the positive potential of D-B and P3s for design professionals, but rather to inform your decision-making about choices, especially in emphasizing the following objectives:
2. Conscientiously consider the relevant risk and commercial aspects of your involvement in D-B and P3 projects – generally and on a project-specific basis.
3. Evaluate and assess how your involvement in D-B and P3s relate to other, perhaps more mainstream components of your practice, and appreciate the potential for conflicts of interest.
4. Never suppress or subordinate the critical importance of exercising independent professional judgments, especially given the variety and enormity of external pressures exerted by other project participants in D-B and P3s. Team collaboration, design optimization, value engineering, integrated design or design assist – while all salutary objectives in their own respects – are no substitute or excuse for disregarding the paramount obligation of the design professional to exercise independent professional judgment.
5. Develop risk management and contractual guidelines and standards to anticipate the risks and challenges in D-B and P3s, while realizing that to an extent, the approach needs to be flexible and adaptive given the relatively high degree of variability in the project-specific nature of risk factors and “non-standard” contractual terms utilized in D-B and P3s.
Navigating through, and attempting to achieve, these objectives is especially challenging in today’s D-B and P3 environment for several reasons:
a. Effective Choice Realism Constraints
For many public owners increasingly seeking cost and other risk containment and funding gaps, D-B and P3 may be the only methods by which project types may be delivered. If these owners and their projects represent your client base or qualifications and skill sets, you may (and probably do) face significant pressure to readily embrace D-B and P3s. In such circumstances, you can sensibly understand why some design professionals may effectively and realistically ask – “how do we say no?”
b. The “Risk Profile” Die Has Been Cast For You
Many of the major factors and contractual terms that will ultimately shape and (through “flow-down”) define your contractual terms and risk profile, are determined by “upstream” project participants in D-B and P3s (e.g., the owner, concessionaire and design-builder). In such circumstances, your ability to meaningfully alter, mitigate or otherwise manage the risk profile established by those upstream determinations may effectively be limited. This reality seems to contradict what we have been traditionally taught about the advisability of balance and correlation between the ability to assume risk and the ability to control risk.
c. Design Professional “Acculturation” in D-B and P3s
Put candidly, at present, many design professionals are neither adequately trained nor experienced nor professionally accustomed nor comfortable to function profitably and successfully in a risk protective manner in the D-B and P3 environment. D-B and P3 require a different type of professional practice mode.
Aside from contractual and professional liability risk precautions there are many other (albeit related) aspects of design professional training required for successful participation in D-B and P3s. For example:
- Scope of services and fee negotiation skills
- Importance of pre-award agreements with clearly defined scopes
- Adherence to contractual scope in actual service performance
- Timely notification and documentation regarding claims for additional compensation or time extensions
- Development of effective quality control procedures to address the accelerated pace and compressed cycle of design development in D-B and P3s
- Timely addressing fee payment withholding
- Holding your “independent professional judgment” ground in the design submittal review process
To revert to the questions posed at the beginning of this commentary, at the end of this probing and deliberative process, some design professionals may choose not to enter the D-B and P3 arena, and some may enter without the risk management acumen and armor necessary or advisable to achieve success in those delivery methods.
My hope is that your choice will be informed and guided by some of the recommendations discussed and, as importantly, it will be shaped by awareness and adequate training as to other important aspects of your professional and commercial practices required to achieve success in D-B and P3.
Above all, you do have the ability to make choices and the ability to implement those choices as you prudently and conscientiously consider the best interests of your firm. My commentary concludes at this point. I make no judgments on the available choices as that is your domain, except to repeat the old adage already known to you – “only fools rush in.”