New Consensus Contract Template Offers Lean Practices to Enhance Design-Build Project Delivery

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Snell & WilmerLean construction aims to minimize waste of materials, time and effort and increase the productivity and effectiveness of construction work. ConsensusDocs ("CD"), a coalition of some 40 prominent A/E/C industry organizations, recently published its Design-Build Lean Addendum (CD 431) tailored to incorporate Lean practices in the design-build project delivery method. CD previously incorporated these concepts in its pure integrated project delivery (IPD) agreement (CD 300), but many project participants continue to prefer the design-build project delivery over IPD. The Lean Addendum is designed to be attached to the prime design-build agreements (CD 400, 410 or 415) as well as the subcontract (CD 450, 460) and design professional agreements (CD 420). These other design-build templates offer integrated design and construction services, but do not explicitly incorporate Lean practices contractually. The Lean Addendum memorializes which Lean practices project participants incorporate in to their design-build project. By using the CD 431, users will get the vast majority of the benefits of Lean tools and techniques without having to make the leap to IPD.

The Lean Addendum recites that the project team will engage in (a) collaborating throughout the project with all members of the design and construction team; (b) planning and managing the project as a network of commitments; (c) optimizing the project as a whole rather than any particular piece and (d) tightly coupling learning with action (promoting continuous improvement throughout the life of the project). The design-builder, constructor and design professional (if separate entities) each promise to furnish its skill and judgment and to collaborate and cooperate with the Project Team to further the interests of the project. Team members are expected to make and secure reliable commitments as the basis for planning and executing the project. However, the Lean Addendum does not purport to create, and to the contrary expressly disclaims, any fiduciary duty or liability on or with regard to any of the contracting parties.

Specifics are provided as to: project planning systems, pull planning and look ahead schedules; joint worksite investigations; team validation of the owner’s program and cost modeling; target value design and pricing; value and constructability analyses; risk identification and management; and quality assurance and quality planning. As with other CD templates, the Lean Addendum is fully editable and project participants should specifically tailor the document to their specific intended use; in other words, not all of these principles need be utilized for each project. Experienced construction transactions counsel can assist in developing and integrating the document with other project contract documents to clearly express the project participants’ mutual intent.

The CD 431 Lean Addendum is another useful tool for the team toolbox. As a final practice tip, as with all contract documents, the key is not to simply negotiate, execute and then drawer the contract, but rather to utilize the contract as a process flowsheet to execute and deliver the project with efficiency and avoidance and mitigation of risk and disputes.

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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