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PROGRESSIVE DESIGN-BUILD PROJECT DELIVERY

Procurement GuideWDBC No. W-1100-2013

WaterDesignBuild.org

PROGRESSIVE DESIGN-BUILD PROCUREMENT GUIDE ii

Contents

Introduction...............................................................................................................................................................1

The Progressive Design-Build Method....................................................................................................................3

Information Availability with Progressive Design-Build Procurement...................................................................4

Key Considerations with Progressive Design-Build Procurement.......................................................................4

Existing Legal Authority.........................................................................................................................................4

Basis for Selection..................................................................................................................................................5

Qualifications-Based Selection.......................................................................................................................5

Best-Value Selection......................................................................................................................................6

Required Contents of Submissions.........................................................................................................................7

Statement of Qualifications (SOQ).................................................................................................................7

Proposals.........................................................................................................................................................8

Evaluation Criteria and Scoring Methodology.....................................................................................................10

Evaluation Criteria........................................................................................................................................10

Scoring Methodology...................................................................................................................................10

Progressive Design-Build Contract.......................................................................................................................11

Exhibit A — Term Sheet.....................................................................................................................................11

Copyright 2013 WATER DESIGN-BUILD COUNCIL | Progressive Design-Build Procurement | WDBC W-1100-2013

PROGRESSIVE DESIGN-BUILD PROCUREMENT GUIDE 1

Progressive Design-BuildProcurement Guide

Introduction

The progressive design-build method of delivering infrastructure projects combines the owner’s direct control over project concept and detailed design with the design-builder’s innovation – and creates a single point of accountability. Given the growing popularity of the progressive design-build (PDB) delivery method, the Water Design-Build Council (WDBC) has developed this user-friendly procurement guide, along with a suggested set of request for qualifications (RFQ) and request for proposal (RFP) model documents for conducting PDB procurement effectively and in accordance with best practices.

Owners may choose among a variety of approaches to procuring a design-builder using the PDB method. Owners may choose to evaluate only non-price factors, basing their selection solely or primarily on qualifications; or they may evaluate a combination of price and non-price factors to determine which design-builder offers the best value. An owner may conduct a single-step process, using either an RFQ with only non-price selection factors or an RFP with both price and non-price selection factors. Alternatively, an owner may conduct a two-step process, first soliciting statements of qualifications (SOQs) and then requesting proposals from a short list of pre-qualified proposers. In the two-step process, the owner may limit the RFP to project-approach elements (non-price factors only) or may request a fee and rate proposal as well (both price and non-price factors). In any event, each owner needs to decide at the outset, on a project-by-project basis, which PDB procurement approach best fits its needs and preferences.

By discussing key considerations in preparing RFQs and RFPs, this procurement guide will assist owners in identifying the most appropriate procurement process for a particular PDB project and in preparing RFQs and RFPs that will promote each owner’s interests and objectives.

This guide addresses the following approaches to PDB procurement: Single-step, with selection based on qualifications; Single-step, with selection based on best value; or Two-step, with a short list based on qualifications, and selection based on best value or qualifications.



The table, Progressive Design-Build Procurement Approaches, summarizes the model documents provided by the WDBC, as well as key considerations for each approach.

Progressive Design-Build Procurement Approaches

Option Model Documents (1) Considerations for Selecting Procurement OptionSingle-Step ProcessRequest for Qualifications

WDBC No.W-1200-2013

• If schedule is a critical driver• If design-build qualification factors are decisive,• If owner prefers – and if state and local laws allow – selection based solely on non-price factors

Single-Step ProcessRequest for Proposals

WDBC No.W-1300-2013

• If schedule is a critical driver• If owner prefers – or if state or local law requires –

inclusion of price as a selection factor

Two-Step Process

Step OneRequest for Qualifications

Step TwoRequest for Proposals (2)

WDBC No.W-1400-2013

WDBC No.W-1500-2013

• If schedule can accommodate the time required for two procurement steps and short-listing is required or desired

• If owner prefers – or if state or local law requires – inclusion of price as a selection factor(2)

(1) Progressive Design-Build Contract model documents are also being developed by the WDBC and will be made available as a starting point. Upon making any revisions that owner and its legal counsel may determine necessary or desirable, such draft contract documents should be attached to the RFQ and RFP. In the meantime, a draft Term Sheet is included, for consideration by owner and its legal counsel, in this Guide.

(2) The Step Two RFP could be modified – by removing all references to a fee and rate proposal – such that selection would be based on non-price factors only.

The RFQ and RFP model documents are available as ready-to-go Word files. After deciding which procurement process is best-suited to its project and objectives, the owner can use the model documents as starting points to prepare RFQ, RFP and draft contract documents tailored to its project.

WDBC is making these materials available to assist owners who may choose PDB by promoting suggested best practices, introducing terminology and offering perspective on the various approaches to the PDB procurement process. All of the model documents are posted on the WDBC Website (www.waterdesignbuild.org) and will also be available on CDs at conferences, workshops and other events.



Additional references for owners using the PDB method of project delivery include:

The Municipal Water and Wastewater Design-Build Handbook, Second Edition (WDBC, 2010)Design-Build for Water and Wastewater Projects (American Water Works Association, 2012)Water Design-Build Council Website at www.waterdesignbuild.org.

The Progressive Design-Build Method

With PDB procurement, the design-builder is typically selected primarily on the basis of qualifications – and before significant development of the project’s design is completed. Upon contract award, design-build services are provided in two phases.

In Phase One, the owner and design-builder work together to advance the design, incorporating design concepts and details desired by the owner and to ensure that the owner’s equipment and facility performance requirements and standards are satisfied. This collaborative approach offers the owner the benefit of detailed cost estimating and schedule information, facilitating well-informed decision-making about project scope and design. The design-builder can also take steps during Phase One (such as ordering long-lead time equipment, permitting and site investigations) to reduce owner risks and costs for construction of the project during Phase Two.

During Phase One, the design-builder completes the project’s design to the point desired by the owner (which often ranges from 60 to 90 percent, but can be less if schedule dictates) and typically submits to the owner a guaranteed maximum price (GMP) or lump-sum price for final design and construction, along with a detailed breakdown of estimated construction costs and a proposed schedule. The owner can also participate in the design-builder’s selection of key subcontractors and equipment suppliers. Once the owner approves the proposed schedule and GMP or lump-sum price, the project proceeds to Phase Two, which includes final design and construction. If the parties cannot agree on an acceptable price and schedule, the owner can finish the partially-completed Phase One design and complete the construction with a separately-procured construction contract.

There are a number of circumstances in which PDB might be the preferred project delivery method, such as when the owner wants to:

accelerate the schedule maximize design-builder input during the project’s design development engage in a highly collaborative approach with the design-builder emphasize qualifications in selecting the design-builder minimize procurement cost and time capture construction cost savings by using a GMP, or achieve a high degree of construction cost certainty before design is complete

The following factors promote cost certainty and competiveness with the PDB method: The GMP or lump-sum price proposal tends to be accurate, since it is established with the benefit of a

relatively detailed level of design (typically between 60 and 90 percent design development) by an experienced design-builder, coupled with a high degree of owner input that avoids costly design-related change orders.


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The design-builder provides detailed cost estimates along with design development, allowing the design engineer to design to the owner’s budget (as opposed to obtaining an engineer’s opinion of probable cost upon completion of biddable plans and specifications along with the risk of bidding uncertainties).

The GMP or lump-sum price proposal can be prepared through bidding certain material purchases and/or subcontracted work thus providing greater cost certainty and demonstrating design-builder competitiveness.

The design-builder can include detailed cost estimates of self-performed work in the GMP or lump-sum price proposal providing the owner with increased transparency in pricing to promote cost certainty and competitiveness of the design-builder.

Information Availability with Progressive Design-Build Procurement

The owner should provide during the procurement process any available design work product and other project-related engineering and other information and should clearly spell out in the procurement documents the extent to which the design-builder may rely on such information. The ability to achieve cost and schedule certainty depends on the timely availability and reliability of certain project information, such as raw-water or influent conditions (in the case of a water or wastewater treatment plant project) and subsurface conditions, including soil and rock characteristics, underground utilities and obstructions, and the presence of hazardous or archeological materials as well as any equipment or manufacturer preferences. PDB reduces the likelihood that the owner will provide inaccurate or incomplete project information to respondents or proposers – a risk commonly associated with lump-sum design-build procurement – since it is not necessary to share such information (typically generated by third parties) before awarding the contract. PDB gives the owner the option to develop this information in concert with the design-builder during Phase One design development – prior to preparation of the GMP or lump-sum price. If such information is not available when the owner decides to initiate the PDB procurement process, this option enables the owner to accelerate procurement and project delivery.

Key Considerations with Progressive Design-Build Procurement

Owners should focus on five key areas when designing a process and preparing RFQ and RFP documents for PDB procurement:

Existing legal authority Basis for selection Required contents of submissions Evaluation criteria and scoring methodology Progressive design-build contract



Existing Legal Authority

[Note: The following discussion does not constitute legal advice, and readers are advised to consult with their own legal counsel for a determinative ruling on their authority under applicable state and local laws.]

Before electing to use the PDB method and embarking on project procurement, owners should verify that state and local procurement laws allow for its use. Owners should also pay careful attention to the specified requirements for procurement, as these will affect not only the type of process used (i.e., one-step or two-step process, and qualifications-based or best-value-based selection) but also often the required content of the SOQ and proposal submissions.

The authority for public owners to engage in alternative methods of project delivery is generally controlled by applicable state legislation. Some general information regarding state legislation relating to alternative project delivery is summarized below:

Many states permit the use of project delivery methods other than traditional design-bid-build for water and wastewater infrastructure; most of them permit design-build, while some also permit design-build-operate or design-build-operate-finance. (Brief descriptions of design-build-operate and design-build-operate-finance can be found in the WDBC Handbook and online at www.waterdesignbuild.org.)

Some states have uniform rules for alternative project delivery that apply both to state agencies and also to municipal and special-district projects. Others have a specific rule for state agencies and different or parallel rules for municipal and special-district projects.

Some states are prescriptive in defining the selection process and selection criteria, while other states give municipalities and special districts considerable discretion in their procurement process.

A limited number of states allow only construction management at-risk or construction management-general contracting as the permitted form of alternative project delivery – sometimes with specific rules on the permitted amount of work that the constructor may self-perform. (A discussion of construction management at-risk, as well as a brief description of construction management–general contracting, can be found in the WDBC Handbook and online at www.waterdesignbuild.org.)

Some states have different rules for charter cities vs. general-law cities, with charter cities generally having broad discretion and general-law cities having restricted discretion in the use of project delivery methods.

Some states limit the use of alternative project delivery to projects in a certain size range, or to a specific number of projects in a given year; some may require annual reports to a state procurement commission or to the state legislature.

A number of states do not permit qualifications-based selection of design-builders for water and wastewater projects, requiring that price be included as a selection factor. Some states specify the weighting to be allocated to price.

The WDBC web site (www.waterdesignbuild.org) contains additional information concerning state legislation.



Basis for Selection

Progressive design-build procurement enables an owner to select the design-builder on the basis of qualifications. It is recognized, however, that some owners may not want, or may not have the ability (due to applicable law), to base selection solely on qualifications. The WDBC model documents, therefore, include RFQ and RFP templates for best-value (incorporating both price and non-price factors), as well as qualifications-only, selection.

Qualifications-Based Selection

Qualifications-based PDB procurement offers certain advantages. It enables an owner to employ evaluation criteria that are routinely used for any qualifications-based selection, such as design engineer, legal counsel or other professional services. Using a familiar process can help ensure that the owner is able to conduct the procurement effectively to select the best-qualified design-builder. Qualifications-based selection can substantially reduce procurement time, an important factor for projects facing tight schedules. It also reduces the complexity and cost of the PDB procurement process (both for owners and design-builders) and often generates a larger pool of qualified firms – including smaller, local firms that might otherwise be reluctant to participate due to the high cost of engaging in the proposal process.

Best-Value Selection

If an owner prefers (or if applicable state or local law requires) that cost be considered in selecting the design-builder, a fee and rate proposal (as described below) is used in conjunction with the qualifications-based procurement process. With PDB procurement, however, the total cost of construction is not a factor in selecting the design-builder, since this cost is established after contract award.

A fee and rate proposal generally includes a combination of fixed fees and hourly rates for specific components of the design-build services, as determined by applicable state or local procurement law and owner preferences. The owner may want to include some combination of:

Fixed fees or hourly billing rates with associated labor classifications for Phase One services (such as preconstruction services and design development) and certain Phase Two services (such as engineering services during construction), based on a detailed scope of work described in the RFP.

The design-builder fee or markup as a percentage of allowable costs of the work (such as trade subcontracts, equipment purchase orders and engineering subconsultants) as defined in the progressive design-build contract. To compare the fee percentages included in the rate and fee proposals, an assume value or estimate of the project’s cost of the work should be provided and utilized for all proposals. (As an alternative to a fee percentage, a fixed fee amount could be requested as long as the actual cost of the work turns out to be within a reasonable range of the cost estimate utilized when such fee is requested.)

A fixed fee or cost cap with hourly rates for providing some elements of general conditions (such as project management and construction supervision) over a stated or implied time period, based on a definition of general conditions contained in the RFP. If an owner wishes to include a fee or a cost cap for providing general conditions, it is recommended that the RFP specify the assumed schedule duration and project staffing requirements that all proposers should use (i.e., 24 months project duration with a full-



time project manager, etc.) and include a clear definition of the general conditions. A sample definition of general conditions is included with the WDBC’s Progressive Design-Build Contract.

In general, when requesting a fee and rate proposal in the RFP, it is important to recognize that the intent of PDB is that selection of the design-builder be based heavily on qualifications. It is also important to recognize that fees and rates account for a relatively small percentage of the overall project cost. The weighting of the fee and rate proposal in the overall evaluation and scoring should therefore be kept to a minimum, recognizing that some state procurement laws may dictate minimum percentages. The model RFP documents provide suggestions for weighting fee and rate proposals as part of the overall proposal score.

It would be ill-advised to rely heavily on fees and rates as indicators of total project costs, as many variables affect such costs, and the impact of those variables can vary among different design-builders. The selected design-builder’s ability to control or minimize construction costs, through cost-effective design and innovative construction means and methods, is a far more relevant factor in the project’s ultimate cost. Variables to consider include, for example, how the design would be separated into work packages; the amount and types of self-performance to accomplish the work; the ability to identify, manage and mitigate risks; and purchasing power.

A proposer’s ability to have a positive impact on the total project costs may or may not be related to the lowest fee and rate proposal. The largest project cost element is the direct cost of construction; the surest way to minimize this is by selecting a highly qualified and experienced design-build team that understands the need to focus on designing a readily constructible project – one that minimizes construction costs and schedule, while achieving the owner’s goals. These inherent qualities of the design-builder are reflected in qualifications, but not necessarily captured in a fee and rate proposal.

Required Contents of Submissions

Owners are generally experienced in preparing procurement documents for contracting with professional services organizations and for bidding construction projects. Some of those concepts and methods are readily adaptable to PDB procurement, especially the qualifications-based selection process commonly used for professional services. As the owner’s procurement team develops the procurement documents, project drivers, expectations and objectives will emerge and will aid in developing the key topics and information the owner will request from proposers.

Owners generally base their choice of a design-builder on one or both of the following submissions: a Statement of Qualifications (SOQ) and a proposal. (The summaries of SOQ and proposal submission requirements that follow assume a two-step procurement process.)

The WDBC model RFQ and RFP documents were developed to be comprehensive; they include submission requirements commonly requested by owners for PDB delivery. The model RFQ requires respondents to submit an SOQ and enables owners to assess the qualifications and capabilities of the responding design-builders. The model RFP requires a proposal and enables owners to evaluate project approach and certain costs for design-build



services in addition to qualifications. The model documents are meant to provide a foundation that enables owners to develop an RFQ or RFP that best suits their specific needs. The tables below summarize the submission requirements included in the RFQ and RFP model documents.

Statement of Qualifications (SOQ)

The content required by the RFQ should be designed to aid the owner in determining whether, and to what extent, the design-builder is qualified to design and construct the specific project, including type, size and scope. The SOQ should include past performance on similar projects, as well as specific experience of proposed key personnel. The owner should establish minimum qualification requirements for screening SOQs as they are received and should include those requirements in the RFQ.

The list of requirements in the following table is for an RFQ that is part of a two-step procurement process (sample document WDBC No. W-1400-2013). A sample RFQ for use in a one-step procurement process is provided as WDBC No.W-1200-2013.

Typical Requirements for Progressive Design-Build SOQ

Part Summary of Contents CommentsTransmittal Letter Identifies the design-builder and

provides contact information.

Part 1: Executive Summary Provides a first-glance overview of the SOQ contents, highlighting important features

RFQ should limit the number of pages and may provide guidelines or requirements for the executive summary’s organization and contents.

Part 2: Design-Builder Profile Provides general, legal and financial information concerning the design-builder.

Required financial and legal information typically apply to the design-builder and not to subconsultants/subcontractors. In the case of a joint venture, both parties must provide requested information.

Part 3: Project Team Describes additional firms and key personnel:▪ Organization charts▪ Roles and responsibilities▪ Resumes for key personnel

RFQ can either mandate key personnel positions or leave it to the discretion of respondent. Should require separate organizational charts for firms and key personnel.

Part 4: Experience Provides detailed information on relevant design, construction and design-build projects.

Provides safety-related information

RFQ should specify maximum number of reference projects and should encourage reference projects with similar size and scope.

Enables owner to evaluate the safety record of potential proposers



Proposals

The RFP should request the minimum information required to fully evaluate the design-builder’s approach and ability to perform the stated scope of services, including (as appropriate) project management, design, engineering, cost estimating, scheduling, permitting, procurement, construction, interface with existing operations, commissioning, and training of owner’s operating personnel. The proposal’s content should be in the form of a series of narratives outlining and illustrating the proposed approach for dealing with the owner’s key challenges and concerns. When costs are included in the proposal, the RFP should request a fee and rate proposal (as described on page 6 under Best-Value Selection), not an estimate or commitment for total project or total construction costs. The fee and rate proposal should be submitted in a separate, sealed envelope and opened after the technical proposal has been scored.

The list of requirements in the following table is for an RFP that is part of a two-step procurement process (WDBC No. W-1500-2013). It excludes information provided in the preceding SOQ. If using a one-step procurement process, the owner would include many of the requirements outlined for an RFQ as part of the one-step RFP; a sample RFP for use in a one-step procurement process is provided as WDBC No. W-1300-2013.

Typical Requirements for Progressive Design-Build Proposals

Part Summary of Contents Comments

Transmittal Letter Identifies the design-builder and provides contact information.

Part 1: Executive Summary Provides a first-glance overview of the proposal contents, highlighting important features

RFP should limit the number of pages and may provide guidelines or requirements for the executive summary’s organization and contents.

Part 2: Project Approach Can include:- Discussion of how a collaborative relationship with the owner would be established- Discussion of how the design and construction processes will interface.- Identification of the work components critical to the project’s success and how these components would be achieved- Description of the process for developing the GMP (or lump-sum price) proposal- Project Specific Safety Program- Project Specific Quality Program- Schedule

RFP may emphasize elements of the project delivery approach and issues critical to project success.RFP should require the proposers to clearly describe how the design- builder plans to implement the project during Phase One and Phase Two.RFP can require brief descriptions of the approach to quality management, communications and risk management.RFP may request sample plans from past projects.



Part 3: Progressive Design-Build Contract Markup

Provides a description and discussion of the rationale for proposed revisions to the draft progressive design-build contract included with the RFP

RFP should require a marked-up version of the draft progressive design-build contract, including all revisions requested by proposer.

Part 4: Fee and Rate Proposal(for best-value PDB selection provided in a separate, sealed envelope)

Provides certain fees and rates for design-builder services during Phase One and Phase Two, such as:- Fixed fee or hourly rates for design, engineering during construction and pre-construction services- Design-builder fee or markup as a percentage of allowable project costs.- Fixed fee or hourly rates for some components of general conditions

RFP must clearly define the scope of services when fee and rate proposals are requested.RFP should not request an estimate or firm price for the cost of construction.If a fee or rate for general conditions is requested, the RFP should provide an assumption of the schedule duration.

Part 5: Updated SOQ Confirms prior SOQ, describes any changes to project team or key personnel, and explains reasons for change.

RFP can allow proposer to refer to its prior SOQ and should require Owner approval of any proposed changes to the SOQ.

Evaluation Criteria and Scoring Methodology

Evaluation criteria and scoring methodologies should be designed to select a design-builder with the highest probability of achieving all of the owner’s project goals and objectives. There are many variations in how an owner may choose to evaluate and score an SOQ or proposal. In many cases, local procurement rules or state statutes drive evaluation criteria and scoring methodology.

Regardless of specific procurement rules and project goals, owners must ensure that the evaluation criteria and scoring methodology are fair, clear and transparent to prospective design-builders. If transparency is lacking, the result may be limited interest among design-builders. The owner also risks the procurement being challenged after selecting the design-builder, which can result in project delays.

An owner may elect to evaluate and score PDB proposals based solely on non-price components (qualifications) or on both price and non-price components (including a fee and rate proposal).

For each of these components, the owner needs to identify the criteria to be used in its evaluation and scoring. Additionally, weighting of the evaluation criteria should be clearly identified to indicate how the scores from the individual criteria are combined into the final scores.

Evaluation Criteria

The model RFQ and RFP documents provide suggested evaluation criteria for a fair and accurate assessment of the respondents or proposers. The submission requirements in the RFQ and RFP provide the information needed to apply the criteria. Owners can and should modify criteria in the model documents to reflect their procurement



requirements and to capture proposers’ information, qualifications and capabilities that are important to the owner or unique to its project.

Scoring Methodology

Once the owner establishes evaluation criteria for the SOQ or proposal, it needs to develop a rating system or scoring methodology. There are numerous ways to score SOQs and proposals. One is the pass/fail method, where owners establish standards for each criterion, and the SOQ or proposal either meets or does not meet these standards; this system can be modified to assign degrees of responsiveness to each criterion. One of the most common means of scoring is by assigning a set number of points for each criterion in the RFQ or RFP and awarding points (from 0 to the maximum assigned to that criterion) based on how well the design-builder meets each criterion.

For each evaluation criterion, the model documents include suggested weighting percentages. The resulting weighting of the various criteria reflects the relative importance of each one. The suggested weightings in the model documents are shown as examples only. On procurements that include a fee and rate proposal, close attention should be given to the weighting of these costs against the qualifications-based criteria. As previously stated, the PDB procurement method allows for the selection of design-builders primarily based on qualifications. When fees and rates are included in the procurement process, they should not be weighted to a point where they overshadow the qualifications of the proposing design-builders.Owners need to set the ultimate weighting of the evaluation criteria based on the goals established for the project and the requirements of state and local procurement laws. Defining what is important for the success of a project will help guide the relative weighting and point assignment for the evaluation criteria established in the RFQ and RFP.

Progressive Design-Build Contract

During the PDB procurement process, the owner will need to issue a draft, project-specific progressive design-build contract for consideration and eventual execution by the selected design-builder. Typically, a draft form of contract is included as an attachment to RFQ and RFP documents. For the convenience of owners, and subject to revision by the owner and review and approval by the owner’s legal counsel, the Water Design-Build Council is in the process of preparing a model progressive design-build contract from which owners may find it helpful to begin drafting agreements that meet their particular needs.

As a sort of check-list, the following summary of contract terms (Exhibit A —Term Sheet) is provided for the consideration of owners and owners’ legal counsel.



Exhibit A — Term SheetProgressive Design-Build AgreementGeneral Delivery Approach. Phased Delivery; selection of Design-Builder on the basis of qualifications, with Contract Price established at the end of Phase 1, “open-book”

Phase 1- Services Design & pricing services, to level of completion required by the Owner and for Design-Builder to establish the

Contract Price for Phase 2 Contract Price proposal prepared on an “open-book” basis Level of completion of design: TBD Period for completion of Phase 1: TBDAgreement on Contract Price for Phase 2. Owner may (a) accept Contract Price for Phase 2, (b) negotiate Contract Price with Design-Builder, or (c) reject Contract PriceOwner’s off-ramp if no agreement on Contract Price. If no agreement, then Owner may (a) cancel Project, (b) proceed with another design-builder, or (c) authorize Design-Builder to complete design as an extension of Phase 1 or as an additional servicePhase 2 - Services Completion of design Notice to Proceed with construction by Owner Procurement of all materials and equipment Performance of construction services to Substantial Completion Start-up, testing, and commissioning Completion of remaining services, punchlist, delivery of manuals and warranties Final Acceptance Warranty period services

Contract Documents As at date of contract As developed during Phase 1 In order of precedence As modified by agreement of the parties during performance Order of Precedence Modifications, amendments, and change orders Supplementary Conditions This Agreement with attachments

o Attachment A – Scope of Work Phase 1 Scope of Work Phase 2 Scope of Work

o Attachment B – Compensation Phase 1 Services Compensation Phase 2 Services Contract Price

o Attachment C – Scheduleo Attachment D – General Conditionso Attachment E – Indemnity, Insurance & Bondingo Attachment – Owner’s Project Criteria, inc. Design Criteria, Facility Performance Criteria, performance

test (TBD), wage rate requirements, DBE/MBE/WBE requirementso Attachment – Owner’s Permit List



Construction Documents Other documents (if any)

Ownership of Work Product Design-Builder’s Work Product is an instrument of service; Design-Builder retains ownership & property interests Upon Owner’s payment in full, Owner is granted a limited license to use Work Product solely on Project License in the event of termination or default

Patents & Copyright Design-Builder to pay all royalties and license fees on patented or copyrighted materials, methods, or systems

selected by Design-Builder, and defend, indemnify, and hold Owner harmless. Owner to defend, indemnify, and hold Design-Builder harmless from infringement claims on materials, methods, or

systems specified by OwnerContract Time

Phase 1 Commences on Owner’s NTP for Phase 1 Best efforts to complete within ___ daysPhase 2 Commences on Owner’s NTP for Phase 2 Substantial Completion within ___ days after Date of Commencement (“Scheduled Substantial Completion Date”) Acceptance within ___ days after Substantial Completion Final Completion within ___ days after AcceptanceUncontrollable Circumstances Uncontrollable Circumstances are those acts, omissions, conditions, events, or circumstances beyond the control of

Design-Builder and due to no fault of its own or those for whom Design-Builder is responsible. By way of example (and not limitation), Uncontrollable Circumstances include acts or omissions of Owner or anyone under Owner’s control (including separate contractors), changes in the Work, Differing Site Conditions, Hazardous Conditions, wars, floods, labor disputes, unusual delay in transportation, epidemics, earthquakes, adverse weather conditions not reasonably anticipated, and other circumstances beyond the reasonable control of the party affected.

Equitable adjustment of time for performance & Compensation, by Change OrderLiquidated Damages or Early Completion Bonus $___ per day if Substantial Completion is not achieved within ___ days after Scheduled Substantial Completion

Date $___ per day if Substantial Completion is achieved before Scheduled Substantial Completion Date (“Bonus Date”)

CompensationPhase 1 - Cost reimbursable with a fee, or stipulated sum, per Attachment B, Section 1, Phase 1Phase 2 - Agreed Contract Price as GMP or Fixed Price, per Attachment B, Section 2, Phase 2

Procedure for PaymentPhase 1 - Monthly per invoice, in arrears, within 30 days of invoicePhase 2 Initial payment: TBD Schedule of Values: TBD Monthly per invoice, in arrears, within 30 days of invoice Retainage on monthly payments at ___% until Work is 50% complete; then 0% if progress is satisfactory; Retainage

released upon Substantial Completion Final payment within 10 days of final invoice Interest on late payments, daily at lesser of __% p.a., or max amount permitted by lawProject Accounting. If project is on a GMP, then open-book project accounting; 3 year audit rights



Representatives of the Parties Owner: Design-Builder:

Indemnity, Insurance, Bonding. Per Attachment ELimitations of Liability

Design-Builder’s liability to Owner limited to ___% of Contract Price Mutual waiver of Consequential Damages (other than Liquidated Damages or Early Completion Bonus) “Full Effect” clause – limitations apply whether liability is claimed in contract, tort (including negligence), strict

liability, or otherwise Owner claims under the Construction Warranty to be made within 1 year after Substantial Completion, or under the

Performance Warranty within 1 year after Final Acceptance, or as agreed; Warranty periods do not constitute a period of limitations on Owner’s other rights & remedies on Design-Builder’s other obligations under the Contract Documents

Attachment A — Scope of WorkPhase 1- Scope of Work

Preliminary evaluation Preliminary Schedule Preliminary Estimate Preliminary Design Documents; interim design submissions on agreed schedule; design review[s] at ___% complete Division of Responsibility Contract Price Proposal Other Services

Phase 2 - Scope of WorkCompletion of Design Complete drawings & specifications based on Contract Documents & Preliminary Design Documents; submit for

Owner review & approval (subject to changes in law, codes, regulations, or permits) Assist Owner with Owner Permits (Attachment G); obtain all other necessary permitsConstruction Services Construction Documents consistent with interim design submissions & design review meetings; can be for portions

of the Work Owner accepts drawings & specifications; issues Notice to Proceed with Construction; phased construction

permitted Owner’s review & approval does not transfer any design liability from Design-Builder to Owner Design-Builder provides set of approved Construction Documents Design-Builder provides all construction supervision, inspection, construction equipment, labor, materials, tools, and

subcontracted items to complete the Work Design-Builder gives all notices and complies with all laws and ordinances Design-Builder submits Schedule of Work (revised Attachment C) for Owner approval, as basis for management &

control of project and progress reports to Owner Safety requirements Hazardous conditions, hazardous materials Monthly reports Site maintenanceManuals Provide Commissioning & Startup Manual and Operations & Maintenance Manual for the Facility, 90 days before

scheduled date for commissioning & startup



Completion & Warranties Substantial Completion (may be in phases) when all or portions of the Facility are available for Owner’s use and

revenue service; partial release of retention Joint inspection to verify; Certificate of Substantial Completion Performance testing per Commissioning & Startup Manual Acceptance Final Completion Warranty service as required during Warranty Period Warranty Period of _____ months from Substantial CompletionAdditional Services Upon request of Owner, by Change Order; may include: Financing consultation Surveys & site evaluations Appraisals of existing equipment & property, new equipment Soils, subsurface & environmental studies Assistance with Owner permits Interior design Design revisions for causes beyond Design-Builder’s control Assistance with Owner-procured materials or equipment Consultation on insured losses Owner-directed overtime premium Excess document reproduction O&M assistance after startup Services for tenants, renters, or third-party facilities Expert witness services Other itemsSubcontractors Subcontracting permitted (if no reasonable Owner objection to subcontractor) Provisions of this Agreement to apply to all major subcontracts Assignment rights on subcontracts & sub-consultancy agreements to Owner

Owner ResponsibilitiesInformation & Services provided by Owner Owner to provide full information on Project requirements, including Owner’s Program, within times in Schedule

(Attachment C) All necessary information on physical characteristics of Site, including surveys, site evaluations, legal descriptions,

existing conditions, subsurface & environmental studies Inspection & testing during construction Necessary approvals, site plan review, rezoning, easements & assessments, permits, fees & charges Design-Builder entitled to rely on completeness & accuracy of information & services provided by Owner Owner Responsibilities during Phase 1 Provide Owner’s Program by inception of Design Phase Review & timely approve schedules, estimates, and design documents Provide access to site & adjacent required property



Owner Responsibilities during Phase 2 Review & approve Schedule Give notice within 5 days of awareness of any error, fault, or deficiency Communicate with subcontractors only through Design-Builder Provide insurance if so required in Attachment E Provide access to site & adjacent required property Provide all required equipment, materials, information, data & approvals in a timely & complete mannerOwner’s Representative Fully acquainted with Project Will furnish information & Owner’s services so as not delay performance Has authority to bind Owner

Attachment B — CompensationPhase 1 Services TBD. (May be on cost-plus-fee, unit rates, or stipulated sum basis)

Phase 2 Services TBD. (May be on a Guaranteed Maximum Price (GMP) or fixed Contract Price basis, or cost reimbursable with Fixed Fee) GMP

Owner may request a non-binding target price or total cost ceiling upon execution of the Agreement (i.e., at commencement of Phase 1)

Design-Builder will prepare a GMP proposal during Phase 1 concurrently with Phase 1 design services, and submit the GMP proposal to Owner as the basis for Phase 2 completion of design and performance of construction services

GMP will include Design-Builder’s contingency; Owner will separately budget an Owner’s contingency Phase 2 services may be in separate work packages or task orders, each with its own GMPGMP ProposalIf requested, GMP Proposal for Phase 2 services shall be the sum of: Design-Builder’s Fee Estimated Cost of the Work (inc. Design-Builder’s contingency) Separately priced itemsThe GMP Proposal will include: List of all drawings & specs as basis for proposal List of assumptions, exceptions, & clarifications Scheduled Substantial Completion Date List of any allowances & their basis Schedule of alternate prices Schedule of any unit prices Statement of any Additional Services Time limit for acceptance of the GMP Proposal Review & Acceptance or Rejection Owner & Design-Builder meet to discuss & review GMP Proposal GMP Proposal adjusted as agreed If Owner accepts, GMP Proposal becomes an amendment to this Agreement If Owner rejects or fails to timely notify Design-Builder, GMP Proposal deemed withdrawn & of no effect, and:

o Owner & Design-Builder meet & confer on how Project will proceedo Owner’s options:



Owner may suggests modifications to GMP Proposal Owner may authorize continuation of Work on agreed compensation basis Owner may terminate for convenience

Conversion. Parties may agree at any time to convert GMP to a Fixed Contract Price for completion of Phase 2 ServicesSavings Sharing If sum of actual Cost of Work plus Design-Builder’s Fee is less than GMP (as adjusted), then savings shall be

shared, either:o ___% to Owner, ___% to Design-Builder, oro First $___ to [Owner or Design-Builder], balance on agreed % basis

Fixed Contract Price option Parties may agree for Phase 2 Services to be performed on a Fixed Contract Price basis Design-Builder shall propose Fixed Contract Price on an “open-book” basis Once Fixed Contract Price agreed, contract shall be amended

Cost Reimbursable plus Design-Builder’s Fee option. Parties may agree for Phase 2 Services to be performed on a Cost Reimbursable plus Design-Builder’s Fee basis

Design-Builder’s Fee. Either $_____ or ___% of Cost of Work, as adjustedCost of Work. Costs reasonably incurred by Design-Builder in performance of Phase 2 Services, including: Wages & salaries of direct employees at Site Wages & salaries of supervisory & admin personnel at Site or off-Site for procurement purposes Wages & salaries of design & project admin personnel in Design-Builder’s principal offices, plus overhead mark-up

at ___% Burden for employee benefits, premiums, taxes, insurance contributions and assessments required by law, collective

bargaining agreements, or as customarily paid by Design=Builder Travel, accommodation, & meals Payments to Subcontractors & design consultants, inc. insurance Cost incurred in repairing or correcting defective, damaged or nonconforming work Cost of materials, equipment & supplies incorporated or reasonably used in completing the Work, inc.

transportation, testing, storage & handling Cost less salvage value of temporary or consumable materials, equipment & supplies, inc. installation & removal; if

rented, at agreed rates Cost of removal of debris & waste from Site Cost to establish, operate & demobilize Site office Premiums for insurance & bonds Fuel & utility costs Sales, use or similar taxes, tariffs or duties Legal costs, court costs and costs of mediation and arbitration Costs for permits, royalties, licenses, tests and inspections The cost of defending suits or claims for infringement of patent rights plus judgment or settlement amounts Emergency costs to prevent damage, injury or loss Other reasonable costs properly incurred & approved by OwnerContract Price. Sum of Design-Builder’s Fee plus Cost of Work, plus Design-Builder’s Contingency as agreed

Attachment C — ScheduleSchedule

Preliminary Project Schedule TBD Project Schedule for Phase 2 to be agreed by parties, and substituted for Attachment C by contract amendment



Attachment D — General ConditionsCooperation & General Provisions. Full cooperationDefinitions.Design-Builder’s Responsibilities &Services

General Responsibilities Design-Builder’s Representative Preliminary Project Schedule as Attachment C Start-up meeting with Owner; discuss schedule, administration, procedures, communications, review & approval

process Monthly status report on progress Revise Schedule at end of Phase 1 as basis for Contract Price Proposal for Phase 2Design Responsibilities Qualified, licensed design professionals Standard of care ordinarily used by members of design profession under similar conditions at same time & locality Permits Design-Builder to obtain & pay for required permits other than Owner Permits in Attachment G Design-Builder to reasonably assist Owner on Owner Permits in Attachment G, as requestedPhase 2 Construction Services Design-Builder provides necessary supervision, labor, inspection, testing, start-up, material, equipment, machinery,

temporary utilities & facilities to complete construction Complete & exclusive control over means, methods, sequences & techniques of construction Site maintenance, cleanliness, & safety Project Safety ProgramSubcontractors Duly licensed & qualified to perform subcontracted Work Design-Builder remains responsible for subcontractor performance; no privity between Owner & subcontractors Design-Builder to cooperate & coordinate with Owner’s other contractors at Site; unreasonable disruption or

interference with Design-Builder’s Work by Owner’s other contractors may result in request for Contract Adjustment

Construction Warranty All construction is of good quality, conforms to Contract Documents, & free of defects in materials or workmanship Design-Builder will provide Owner with equipment manufacturers’ warranties upon Substantial Completion Construction Warranty Period of one year from Substantial Completion, extended by repairs or replacements for up

to one further year Within 7 days of receipt of Owner’s notice of nonconforming Work, Design-Builder to take meaningful steps to

commence correction If Design-Builder fails to respond within 7 day period, Owner may commence correction with its own forces and

Design-Builder responsible for all reasonable costsPerformance Warranty Performance Warranty set forth in Attachment F, Owner’s Project Criteria Design-Builder warrants that Facility will meet Performance Warranty upon Substantial Completion and completion

of commissioning & start-up in accordance with Commissioning & Start-up Manual, and Facility is maintained & operated per Operations & Maintenance Manual



Performance Warranty satisfied upon successful completion of Performance Tests in Attachment F Design-Builder further warrants that Facility will be capable of meeting Performance Standards in Att. F through

Performance Warranty Period of ____ months from Final Acceptance (“Extended Performance Warranty”), with necessary steps to remedy failure to satisfy Extended Performance Warranty at Design-Builder’s cost, except for costs of further training for Owner’s staff

Design-Builder has no responsibility under the Extended Performance Warranty to the extent failure of Work due to (1) Owner action or non-action (e.g., inadequate staffing; failure to operate or maintain per Manual & good industry practices; abuse or neglect; alteration; (2) Uncontrollable Circumstances; (3) Change in Law; (4) noncompliant operating conditions, (5) unavailability of spares, chemicals, power, or other consumables; (6) impossibility of frustration of purpose

Owner’s Responsibilities &Services Owner’s Representative Duty to cooperate; perform obligations & services in a timely manner; not to delay or interfere Reviews & approvals within Schedule turn-around times Provide information on which Design-Builder may rely as complete & accurate Access to Site & adjacent property Permits & licenses per Owner’s Permit List, Attachment F Provide assistance to Design-Builder on other permits Require Owner’s separate contractors to cooperate & not interfere with Design-Builder’s Work

Hazardous Conditions Owner responsible for pre-existing Hazardous Conditions; Design-Builder to stop work when encountered &

provide notifications Owner to remedy; independent certification of completion of remediation Owner to defend, indemnify & hold Design-Builder harmless from pre-existing Hazardous Conditions Owner may request Design-Builder to remediate if Design-Builder has remediation capability Design-Builder responsible for Hazardous Materials introduced to Site, and to defend, indemnify & hold Owner

harmless against such HazMat Differing Site Conditions

Concealed or latent physical conditions or subsurface conditions that (i) materially differ from Contract Documents or (ii) are of an unusual nature differing materially from conditions ordinarily encountered & generally recognized as inherent in the Work

Prompt notice to Owner Equitable adjustment in Contract Price and/or Schedule by Change Order

Payment Phase 1- Monthly invoicePhase 2 Schedule of Values Application for Payment submitted monthly for Owner approval, inc. equipment delivered but not installed Owner payment of all undisputed amounts when due, less retention Design-Builder to pay subcontractors from amounts received from Owner Lien releases as required Release of retention upon Substantial Completion, less value of remaining or incomplete Work

Final Payment Design-Builder certificate of no claims outstanding; general release (except for noted items); consent of surety Completion of Performance Testing & Performance Warranty met All Manuals, warranties, and other deliverables delivered Certificate of insurance for required continuing insurance coverage



Application for Final Payment Final Payment within ___ days Final Payment constitutes Final Acceptance, subject to remaining warranty obligations & indemnitiesRemedies Interest on late payments Right to suspend work for failure to pay when due

Changes Contract Price and/or Contract Times equitably adjusted by Change Order to compensate Design-Builder for: Change in Scope of Work Changed Conditions Changes in Legal Requirements after Contract Price Proposal date Impact of Hazardous Conditions Uncontrollable Circumstances Suspension or termination for Owner’s convenience

Adjustment in Compensation may, as agreed, be by: Unit prices Lump sum Costs & fees per Agreement

Dispute Avoidance & Resolution Mutual commitment to cooperation & communication to avoid or minimize disputes

o Resolve at Project level through discussions between Owner’s & Design-Builder’s Representativeso If not, then referral to Senior Representatives of each partyo If not resolved, then non-binding mediation with AAA mediator by Construction Industry Mediation Rules,

per mediation agreemento If not resolved, then final & binding arbitration with AAA arbitrator by Construction Industry Arbitration

Rules; arbitration at location of Project unless otherwise agreed; each party bears its own costs Choice of law: jurisdiction in which Project is located Design-Builder will continue to perform & Owner will continue to pay undisputed amounts during any dispute or

disagreement Suspension & Termination

Owner may suspend for its convenience, up to 60 consecutive days or 90 aggregate days Owner may terminate for its convenience upon 10 days notice; Design-Builder paid costs to date, plus costs of

termination inc. demobilization, plus fair & reasonable sums for overhead and profit Owner may terminate for Design-Builder’s default, after notice & cure opportunity Design-Builder may suspend for Owner’s failure to pay amounts when due, after notice & cure opportunity, or

terminate for extended suspension Either party may terminate for bankruptcy of the other

Electronic Data Transfer Protocol.

Attachment E — Indemnity, Insurance, and BondingIndemnity

Design-Builder shall defend, indemnify & hold Owner harmless from claims of third parties for bodily injury and property damage (except for acts, omissions, or negligence of Owner, its employees, agents, or separate contractors)

Owner shall cause Owner’s separate contractors to agree to defend, indemnify and hold harmless Design-Builder, Subcontractors & employees from all claims for bodily injury and property damage



Design-Builder’s Liability Insurance [limits will depend on size and scope of project] Insurance to be provided:

o Worker’s Compensation/Employer’s Liability insuranceo Commercial General Liability insurance - $5Mo Commercial Automobile Liability insurance - $1Mo Excess Liability insurance - $20Mo Contractor’s Pollution Liability E&O insurance - $10M per loss, $20M annual aggregate

No cancellation or nonrenewal without 30 days’ notice to Owner Certificates filed with Owner before commencement of Work at Site Products & Completed Operations insurance for 2 years after either 90 days following Substantial Completion or

final payment, whichever is earlier Equivalent insurance by subcontractors Professional Liability insurance in amounts TBD

Owner’s Liability Insurance. By Owner in amounts at its discretionInsurance to Protect Project

Design-Builder to obtain Builder’s Risk Property insurance to full replacement cost at time of loss Owner, Design-Builder, Subcontractors, and Subsubcontractors as named insureds Minimum deductibles $50,000, except flood & earthquake at $250,000 Insurers have no right of recovery against insureds and additional insureds Design-Builder & subcontractors each insure their own construction equipment & tools Upon Substantial Completion, Owner obtains its own property insurance on the Project equivalent to its other

permanent plant insurance; Design-Builder, Subcontractors & Subsubcontractors are named insureds; waiver of subrogation

Bonding Provided at Owner’s option & expense Performance & Payment Bonds for Phase 2 Services Effective until Final Payment due plus one year Qualified & licensed sureties

Attachment F — Owner’s Project CriteriaDefinition

Owner’s Project Criteria means those project criteria which have been developed by or for Owner and which describe Owner’s Program requirements and objectives for the Project. Owner’s Project Criteria may include use, space, price, time, site and expansion requirements, and may also include Design-Builder’s submittal requirements and other requirements with respect to Design-Builder’s performance of the Work. Owner’s Project Criteria may include initial conceptual documents, Owner’s design criteria, plant performance criteria, and other technical materials and requirements related to the Project.

Design Criteria TBDPerformance Criteria TBDPerformance Tests TBDPerformance Warranty TBDWage Rates TBDDBE/MBE/WBE Requirements TBD

Attachment G — Owner’s Permit ListPermits TBD
