Article: Early Contractor Involvement: Rethinking and RecalibratingDelivery Methods for Subsurface Projects
For more than half a century, the underground design and construction industry has been challenged to develop and successfully implement approaches to improve delivery and risk allocation, and minimization of disputes, on major subsurface projects. In the last two decades, intensified efforts to address those challenges have concentrated and resulted in increased utilization of delivery methods alternate to the long-dominant and pervasive traditional design-bid-build (“DBB”) method. Design-Build (“DB”) has emerged as the preferred delivery method for many project sponsors of major subsurface projects.
In the last several years, problematic trends have been identified and serious questions raised about whether conventional DB is meeting the challenge of improving project delivery and achieving realistic procurement pricing and balanced risk allocation on heavy civil and major subsurface projects. Reports abound regarding claims and disputes among project participants; unrealistic pricing and contingencies; imbalanced risk allocation; substantial financial losses experienced by Design-Builders; and the concerning increase in professional liability claims by the latter against their Consulting Engineer subconsultants. These losses and claims have resulted in the significantly diminished availability and capacity of bonds and project-specific professional liability insurance required to support principal project participants in the delivery of those projects.
The megaproject characteristics of major subsurface projects – complexities; substantial construction values; varied and fragmented design and construction scope distributions; critical design and construction interfaces and interdependencies; and diverse roles and responsibilities of multiple participants – elevate and intensify the risks and stakes for project participants.
The recent industry critical spotlight on conventional DB fairly raises a basic question: Is conventional DB intrinsically the problem, or is that delivery approach simply a manifestation and symptomatic of more dysfunctional characteristics and fundamentally flawed premises and expectations underlying the assignment of project participant roles and responsibilities and risk allocation inherent in all delivery methods for subsurface projects?
This paper will examine that question and analyze whether Early Contractor Involvement (“ECI”) methods , such as Progressive Design-Build (“PDB”) and Construction Manager/General Contractor (“CM/GC”), are prudent approaches that may provide more sensible and successful procurement and contractual strategies and mechanisms to improve and inform pricing realism and the balance of risk allocation on subsurface projects by providing and facilitating increased opportunities for synchronized, holistic, and timely collaboration of the Owner, Contractor, and Consulting Engineer in the development and evolution of design and construction approaches from preliminary stages and through construction; and thereby be more likely to enhance the availability and capacity of bonding and project-specific insurance coverages on those projects.
About the Author
David J. Hatem, PC is a partner in the Boston-based law firm, Donovan Hatem LLP. Nationally recognized for his expertise in representing engineers, architects and construction management professionals, he leads the firm’s Professional Practices Group which serves design and construction professionals.