Construction Corner: Design-Bid-Build Project Delivery Method

by Shipman & Goodwin LLP
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DesignMeetingImageIn our last Construction Corner post, we discussed the various roles that a construction manager may play in a project and introduced the Construction Manager at Risk project delivery method.  Now we will discuss the most traditional of project delivery methods, Design-Bid-Build project delivery.

For projects employing the Design-Bid-Build (“DBB”) project delivery method, the owner procures an architect (or engineer) to design the project and produce design and construction documents. Once the design and construction documents are complete and satisfactory to the owner, the owner engages a general contractor (“GC”) to construct the project.

For state assisted public school construction projects, the contract for construction must be awarded to the “lowest responsible qualified bidder” (CGS §10-287(b)(1)) after a public invitation to bid has been advertised in a newspaper having circulation in the town in which the project is to take place.  Additionally, for state assisted projects in excess of $500,000, the bid must also be advertised on the State Contracting Portal (CGS §4b-91(a)). The procurement process for general contractors for public school projects that are not state assisted will be governed by relevant purchasing policies of the board of education (except as otherwise required by the town charter). Private school projects will simply be subject to any internal purchasing policies that have been established by the school administration. Regardless of whether the project is a public or private one, it is important that the Request for Proposals includes comprehensive, relevant, well organized and, as applicable, statutorily compliant content and clearly defines the scope of the project.  A solicitation that meets this standard is more likely to elicit proposals that also meet such standard which will facilitate and streamline the evaluation and selection processes.  Such a solicitation will also reduce the likelihood of bid disputes and aid in the defense of a bid dispute should one arise.

Most commonly, the GC’s bid is a lump sum  based in large part on subcontractor and supplier estimates collected by the GC for the work as the GC compiles its bid.  Other components of the lump sum include the GC’s overhead and profit, the labor cost for the GC’s onsite superintendent, insurance premiums and bonding costs.  Some GC’s self-perform a portion of the work with their  own labor forces while others subcontract all but the onsite supervision of the work. Generally speaking the GC will not be entitled to compensation in excess of its lump sum bid unless the owner requests a change in the work which is not due to the fault of the GC or its subcontractors, or where the costs of the work are otherwise increased due to a force majeure event..

In out next post, we will discuss the similarities and distinctions between the Construction Manager at Risk and Design-Bid-Build project delivery methods.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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