Contractor’s Round-up Procuring Engineering Services for Design/Build Projects By Shajan Joykutty, P.E. FSAWWA Contractors Council DDesignesign CCriteriariteria OOwnerwner PProfessionalrofessional ((DCP)DCP) any water utility OO&M&M EEngineeringngineering owners are turning DDesignesign / BBuilderuilder OO&M&M SServiceservices to the design/build Services Mapproach for project deliv - ery. While the design/build approach may vary EEngineeringngineering CConstructiononstruction from desirable to undesirable, depending on the SServiceservices SServiceservices project, the owner’s needs, and the market con - ditions, it is widely recognized that the de - CConstructiononstruction DDelegatedelegated SSpecialtypecialty DDesignesign SServiceservices Delegated Specialty sign/build system of project delivery can reduce PPhasehase EEngineeringngineering DDesignesign SServiceservices the time required for overall project delivery if managed and implemented correctly. While the benefits regarding technical SSiteiite DDesignesiign aandnd DDesignesign SServiceservices TTestingestiing aandnd IInvestigationsnvestiigatiions PPermittingermiittiing DDuringuring CConstructiononstruction FForensicorensiic SServiceserviices quality of the final product and overall cost ((DSDC)DSDC) have been the subject of intense debate in the Florida water business, many utility owners are pursuing projects with the design/build de - Engineering Services in a D/B Contract livery method. This article will feature infor - mation on procuring engineering services for tracts. In very broad terms, the intent of these Utility Owners Should: all the parties involved in the design/build provisions in FS 287 is clearly to ensure selec - 1. Retain a design criteria professional (DCP) process so that owners and builders will have tion of qualified engineers to design a project. to prepare the design/build criteria for proj - an idea of what to expect when they seek en - ects. Selection of engineering services for gineering services in this type of project. Professional Liability Insurance this function should be based on FS 287 and qualifications based. Types of Engineering Services During the development and implementa - 2. Develop a procurement policy for procure - tion of design/build contracts, both utility own - ment of design/build services. Selection In a typical design/build contract, the ers and design/builders must understand the should be qualification-based. The Florida utility owner hires an entity that is either a limits imposed by professional liability insur - Department of Management Services has contractor (FS 489), a professional engineer ance carriers on engineers who offer profes - published standards and requirements that (FS 471), or an architect (FS 481) to design sional services. Typically, professional engineers’ could be used as a guideline. It is important and build a project. The design/builder per - liability insurance does not cover all exposures that such guidelines be enacted into ordi - forms the engineering either directly or retains related to design/build project delivery. Having nances by the municipal government. an engineer to perform design and construc - the engineer agree contractually to assume cer - 3. A design/build delivery method does not tion phase engineering. tain liabilities may not mean that those require - necessarily save on engineering efforts or If the utility owner is a state or municipal ments are covered by the engineer’s insurance costs. It may bring projects to completion agency, then Florida Statutes 287 regulates the policy. Terms like “time is of the essence” or in a shorter time period and will simplify procurement of engineering services for a proj - some aspects of the liquidated damages may not the owner’s budgeting process by establish - ect. FS 287 requires the agency to retain a de - be covered by engineer’s professional liability in - ing a guaranteed maximum price for con - sign criteria professional (DCP) to prepare surance policies; therefore, contracts need to be struction. It is important that the required engineering documents to solicit bids/propos - reviewed carefully by all parties so that the in - and expected qualifications and work effort als from design/builders. The selection of the terests of the design/builder, the engineer, and of the engineer be clearly communicated DCP must be qualification-based prior to ne - the utility owner are protected. both during the selection of the DCP and gotiation of fees and the execution of contracts. Because of the insurance limitations de - the design/builder. The municipal utility owner is required scribed previously, it is prudent to exclude cer - 4. A properly designed procurement process by state law to formulate procurement guide - tain provisions of design/build contracts from will be based on qualifications in the selec - lines for selecting design/builders. FS 287 also engineering contracts. Very often, both own - tion process of design/builders, rather than requires municipalities to select design/ ers and design/builders may elect to enter into a strictly price-based selection process in a builders based on qualifications prior to en - engineering contracts without referencing the conventional design-bid-construct project. tering into guaranteed maximum price con - prime design/build contracts. 5. Ensure that requirements for technical as - 52 • JULY 2009 • FLORIDA WATER RESOURCES JOURNAL pects and project quality be clearly con - ices offered. The rates are usually based on the permits are estimated, permit fees should be veyed through the design criteria package. engineer’s direct salary and a multiplier that in - included. Environmental and building permit Poor definition of required quality can re - cludes factors for standard overhead and profit. fees may represent a significant portion of the sult in project quality below expectations. In typical design/build contracts, it is dif - design costs for a project. In addition, it is important that quality re - ficult to establish the full extent of an engineer’s During construction, costs for engineer - quirements are enforced through the de - scope of work before the project is completely ing assistance should be budgeted properly in sign/build process by the DCP. planned. Most utility owners already have es - the design/build contracts. In addition to typ - tablished practices for hiring and contracting ical engineering services during construction, Design/Builders Should: with engineers; however, this procedure is new such as inspections, submittal reviews, inter - 1. Seek and enter into professional services to many contractors who are entering the de - preting plans and specification requirements agreements with design professionals prior sign/build business. It would be prudent for and project certifications, there are critical to submitting responses to design/build re - design/builders to review typical municipal professional activities that a design/builder quests for proposals from utility owners. procurement procedures for engineering serv - must account for. 2. Although not required by state law, de - ices before establishing compensation terms. Materials testing for compliance, soil den - sign/builders should use the engineer’s In some projects, design/builders may sity and pile load tests, factory testing of equip - qualifications and experience as criteria for choose to enter into general professional serv - ment, permit-driven special and threshold the selection, rather than rely on price- ice agreements with engineers where all con - inspections, equipment start-up, and prepara - based selection alone. This will help deliver tract terms and billing rates are agreed to and tion of O&M manuals are all tasks that need a quality project. each engineering task is assigned and budgeted professional assistance. Also, during construc - 3. Engineering contracts are not similar to typ - as it develops during the project. This becomes tion, the design/builder may need specialized ical construction sub-contracts. Key differ - difficult in some cases when dealing with guar - professional engineering services to design ences include professional liability provisions anteed maximum price contracts, but alterna - form work, cofferdams, sheeting and shoring, and indemnification clauses that will need tive lump-sum engineering contracts may precast work, etc. These services may need to legal input. It is common practice to isolate encounter problems with engineering budgets be contracted separately to specialty firms. some or all of the master design/build con - running out before all the required design Developing a fixed scope of work for en - tract terms from engineering contracts. work is completed. gineering services before the detailed design of Critical professional work during design, a project is complete is difficult, and therefore Engineering Compensation such as site investigations, surveys, soil inves - developing scope for engineering services tigations, and other testing activities, should should be an ongoing process during a de - Most engineers have established rates be covered adequately in professional service sign/build project. based on their level of experience for the serv - contracts. When engineering efforts to secure Continued on page 55 FLORIDA WATER RESOURCES JOURNAL • JULY 2009 • 53 Contractor’s Round-up Continued from page 53 Payment for engineering services is also a difficult issue in design/build contracts. In typical design-bid-build contracts, utility