4/9/2015 TheRoleoftheConsultingEngineerinDesignBuild|InternationalFederationofConsultingEngineers

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THE ROLE OF THE CONSULTING ENGINEER IN DESIGN-BUILD

General

TherearenumerousdeliverysystemsavailableforOwnerstochoosefortheirprojects.Onesuchmethodis
DESIGNBUILD.Inthisapproachthedesignservicesandtheconstructionoperationsareperformedunderasingle
contractbetweentheOwnerandtheDesignBuilder.Apopularreasonforselectingthisapproachisthatthereisa
singlepointofresponsibilityandthusgreaterperceivedcertaintyinthelikelyoverallcost.

Inrecentyears,theDesignBuildsystemhasgainedpopularitybutthelevelofOwneracceptancevariesaroundthe
world.ItisnotedthatinsomecountriesvirtuallyallsignificantinfrastructureisimplementedbyDesignBuild,
whereasinothersitisinitsinfancy.Theexperiencegainedinmanycountriesenablesustoconsiderthetypeof
challengesinvolvedwithDesignBuildandthebestpracticeapproachtofacingthesechallenges.

EventhoughtheDesignBuildsystemhasitsadvantages,itdoesnotfitallsituations.Eachmethodofproject
deliveryhasitsfeatures,advantagesanddisadvantagesforeachindividualOwner,butnonefitsallsituations.In
DesignBuild,theOwnermustunderstandthathegivesupalevelofcontrol(dependingontheprocess,theOwner
canstillexertalevelofcontroli.e.overtheshoulderreviews)overthefinaldesignprocessinfavorofpotential
scheduleadvantages,financingoptionsandintroductionofinnovativedesignandconstructiontechniques.FIDIC
recognizestheDesignBuilddeliverysystemasasoundapproachtotheconstructionofinfrastructurebut,doesnot
recommenditaboveothersystems.

Theownerandprocurement

TheOwnerhasaprimaryobligationtounderstandthecomplexityofthisdeliverymethodbybecominganInformed
Purchaserandtobecommittedtotheadditionalupfronteffortsrequiredtoclearlydefinethescopeoftheproject
andprocuretheservicesofaDESIGNBUILDteam.TheDesignBuilddeliverysystemisnotasubstituteforOwner
involvement.

IftheOwnerhasaninhouseengineeringstafftheyshoulddeveloptheparametersforprocurement.Otherwise,the
servicesofanindependentConsultingEngineer(CE)shouldbeused.TheFIDICpolicypaperTheInformed
PurchaserhasmanypointswhichareapplicableinsecuringaDesignBuildteam,aswellasaConsultingEngineer.

FIDICrecommendsthattheselectionofaDesignBuildteamshouldalwaysbeontheBasisofValueandnotjust
apparentleastcost.Pricealoneshouldneverbeusedasthecriteriaforselectingthedesignbuildteamunlessthe
projectscopeisveryclearlydefined.However,ifthatlevelofdefinitionisavailable,FIDICwouldrecommendthat
theconventionalDesignBidBuildmethodmaybemoreappropriateandlikelyresultinthebestvaluetotheOwner.

AsGovernmentsandIndustrydownsizeandeliminateinhousecapabilitytomanageprojects,theysometimesfind
transferringdesignmanagementtothecontractortobeattractive.Thetransferofriskisalsoattractivetosome
Ownershowever,FIDICrecommendsRiskManagementratherthanRiskTransfer.UnderRiskManagement
theOwnerandthedesignbuilderagreetoplaceeachriskwiththepartyinthebestpositiontomanagethatrisk
duringtheproject.

TheDesignBuildprocessinvolvesanumberofdistinctphaseswhichinclude:

Planning,investigation,andconceptualdesign
Procurement(negotiation)
Implementation
Operation
ToobtainthehighestBasisofValueandproperselectionoftheDesignBuildteam,selectioncriteriashouldinclude:
Fullcompliancewiththeprocurementspecificationortender.
Qualityandtrackrecordofthetotaldesignbuildteam,includingthedesignprofessionals.
Qualityofplanninganddesignhowwelltheprojectwillwork.
Qualityanddurabilityofmaterialsoffered.

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Lifecyclecosting.
Constructability.

ItisfurtherrecommendedthatOwnersuseaprequalificationprocesstolimittheproposerstonomorethat3to5
teams(ideallynomorethan3).

Contractingopportunitiesfortheconsultingengineer

Wheneverthereishorizontalorverticalinfrastructuretobeconstructedorrenovatedinadesignbuilddelivery
system,anopportunitygenerallyexistsforaConsultingEngineer(CE).TheCEcanperforminoneofatleastthree
roles:1)thedesigneremployedbyaconstructioncontractor,2)theholderoftheprimecontractwiththeOwnerand
secureconstructionservicesfromathirdparty(eitheracorporatepartnerorindependentconstructor),and3)be
thetrustedadvisortotheOwnerbyassistingwiththeplanning,investigation,andconceptualdesignleadingtothe
procurementoftheDESIGNBUILDteamandasso,actastheOwnersrepresentativeduringtheinitialplanning,
design,construction,andcommissioningphases.

TheopportunitiesarenumerousfortheCEinthissystemhowever,theCEshouldunderstandtherisksinvolved
witheachpotentialrole.TheDesignBuildprocessisateamefforttherefore,theCEshouldbeselectiveastohis
associates.TheCEshouldexercisecareinthecontractual(risk,delivery,andpaymentconditions,etc.)
relationships.

Guidingprinciples

TheCEfunctioninginanyofthethreerolespreviouslymentionedcontinuestobeboundbytherequirementof
ethicalpractice.Health,safety,andpublicwelfarearenottobecompromised.However,ineachcaseallparties
mustbeawareoftheircontractualresponsibilitiesbutinnocaseareethicalstandardstobecompromised.

Selectionoftheconsultingengineer

WhethertheCEishiredbytheOwnertoserveastheirrepresentative(trustedadvisor)orbytheconstructortoact
astheprojectdesigner,themethodofprocurementshouldfollowQualityBasedSelection(QBS)principles.

Thecontractorasprime

Thisapproachisthemostcommonthroughouttheworld.WhenthismodelisusedtheCEmustunderstandthe
issuesandexercisesoundbusinessjudgment.Someoftheissuesrelativetothisarrangementinclude:1)the
contractorexpectingtheCEtoproducetenderdesignsfornocompensation,2)feenegotiationsafterselection,and
3)theexpectationoftenderdesignstobeaccurateinallrespects(i.e.perfect),and4)pressuretosacrificequality
fortheprofitabilityoftheproject.

InordertoprotecthimselftheCEshould:

1.Scopeoftenderdesign

Makesurethescopeofthetenderdesignincludes:
Areviewofavailablesitedata,andadviceonwhatadditionaldataisrequired
Aconceptdesign(orreviewandextensionofowner'sconceptdesign)
Preliminarydesignsanddrawings,sufficienttoindicatesizes,arrangements,capacities,etc.fortenderpricing(refer
toFIDICscopedefinitions,inpreparation[2])
Specificationreferences
No,orlimited,responsibilityfordesignaccomplishedduringtheproposalstage(limitedinformation,butcontractor
usesthisdesigntobid)
LimitedBillofQuantities(BOQ),withsomeitemsindicatedbyratesorunits(e.g.reinforcement)
Procedurestoaddressquantityadjustments
Inputtocontracttermsandconditions,designcoordination,valueengineering,constructionengineering,client
liaison,etc.
Theownerneedstohaveenoughpreliminarydesigntoleveltheplayingfield.Asaguide,theextentofdesign
inputnecessarytoprovideareasonableorderoftenderaccuracy,maybeintherangeof15%to30%ofafull
design.

2.Agreement

TheCEshouldcontractwiththecontractoronastandardformofagreement.Thiswillincludetermsofpaymentand
anacceptedorderofaccuracyofdesigninformationprovidedbytheCE.ThelevelofProfessionalLiabilitycoverage
shouldnotbeexcessive.ItisimportantthattheContractorunderstandsandacceptsthepreliminarynatureofthe
tenderdesignandincludesduecontingenciesinhistender.Itisimportantthattheagreementfortenderdesign
recognizesthattheCEwillcontinuetoproducethefinaldesignshouldthebidbesuccessful.

3.Fees

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TheCEmustbepaidforthetenderdesignservices.FIDIChasissuedaPracticeNoteonthesubjectofthe
ConsultantinDesignbuildContract.ItisindicatedinthisnotethattheConsultantshouldneverworkwithout
compensation.Whilemanyfeestructuresexist,FIDICrecommendsthefollowingoptions.Paymentshouldbeinfull
forthetimeinputs,ortheCEmayshareinthecontractorsbiddingrisksthroughacceptanceofacostrecovery
basiswhichtranslatesas60%to70%ofthefullfeefortimeinputs.(Thefeesmaybeconvertedtolumpsum.)

Incaseswhereacostrecoverybasisisagreedandthecontractorsbidissuccessful,theCEissubsequentlypaid
thebalanceofthetenderdesignfee,plusabonusofequalamount.Forexample,iftheagreedfeeis70%offull
ratesfortenderpreparation,thenwherethebidissuccessful,theCEisduethebalanceof30%plusafurther30%
asabonus,andthusispaid130%intotal.

Inthecaseofthesuccessfulbid,theCEissubsequentlyengagedtocompletethedesignandconstructionphase
servicesunderaseparatefeearrangement,atafeeagreedpriortobiddingandallowedinthebid.Thisfeeforfinal
designwillreflectthepaymentalreadyreceivedfortheinputtotender.

Theconsultingengineerasprimecontractor

InthismodeltheCEholdsthedirectcontractwiththeOwnerandmusthavefinancial,managerial,andtechnical
skillsaswellasequipmentandmanpowerresourceswhetherinhouseorthroughsubcontractorarrangementsto
properlyexecutetheentireproject.Astheprimecontractor,hisobligationsasengineerarenottobecompromised.
ThePrimeshouldusethesamegoodbusinesspracticesinthismodelthataconstructorwoulduseintheearlier
describedmodel.

Theconsultingengineerastheagentoftheowner

ThismodelisthemosttraditionalrolefortheCEandservicesarecontractedunderaProfessionalServices
Agreement.Asstatedearlier,inorderforasuccessfulDESIGNBUILDprocesstoberealizedtheremustbeaclear
definitionoftheworkincludingapreliminarydesignintherangeof10%to30%dependingupontheprojecttype.In
thisapproachtheCEwoulddevelopsufficientdetailfortheOwnersdocumentssuchthattheprospectiveDESIGN
BUILDconstructorsproposalswouldbeconsistenttothepointofmakingarationalselection.However,ifthework
cannotbequantifiedforpricingortheOwnercannotlivewithasubstitute,thentheworkmustbefullydesignedor
specifiedandFIDICrecommendsthattheconventionalDesignBidBuildmethodwouldbemoreappropriate.The
OwnersCEmayalsofunctionasatechnicaladvisorthroughouttheprojectbyprovidingsuchservicesas:

Procurement
Designreview
Qualitycontrolduringconstruction
Paymentverification
Disputeresolution
Assistanceduringcommissioning.

InthismodeltheCEmayaugmentaninhouseengineeringstaff,orperformallthenecessaryengineeringfunctions
whichtheOwnermayrequire.
References

1.FIDICPolicyPaper:InformedPurchaser,FIDIC,2005:
217.197.210.21/about/statement18.asp
2.FIDICDefinitionsofScope,inpreparation.

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