in Design and Build Contracts
FEATURED PAPER
By Dr. Moustafa Abu Dief, CFCC™, FCIOB, MCInst.CES
Contracts and Claims Director, Dar Alriyadh
Amira Metwally
Construction Management B.Sc. Student, BUE, Egypt
Ahmed Elsayed
Scheduling Civil Engineer Architect house Riyadh, KSA,
Master of Civil Engineering candidate, Altınbaş Üniversitesi Turkey
Abstract
The design and build contract strategy are progressively developing and applied in various project types for its advantages like, time compression, cost certainty, creativity and innovation, design liability transfer, and claims and risk management. Although design and build contract (DB) strategy is a mean of claims mitigation in construction projects, it proved that some secondary risks may evolve when applying the risk mitigation strategy through using the design and build contract strategy. The contract parties’ obligation in the (DB) contract always has some latent disputed risk allocation obligations and entitlements. This paper discusses the advantages of the DB contract delivery method and identifies the recommendations to ensure the effectiveness of this type of contract in mitigating the construction claims.
- Introduction
The traditional design bid build (DBB) contract strategy determines properly the contract parties’ rights and obligation as the design liability is allocated to be under this design entity whether it is in-house design team or an independent design firm. The applicable civil laws oblige the contractor to strictly perform the employer’s design without any tolerance, maintaining the professional conduct and good faith as the contractor is obliged to notify the employer for any defects he may found in the design. Should the contractor meet the contract design, he is relieved from the liability of the project defects related to the original design if any? This situation creates a liability gap where the design liability and the construction liability are spited between two entities. A main source of disputes in construction is that the determination of the liable party for a defect in the DBB is complicated by virtue of three different parties involved in the project, i.e. an employer, a designer, a contactor. It is usually rigorous endeavor to identify the defect as a design defect or a defect pertinent to the construction process. Additionally, it is always disputed to reach an agreement for the root cause of the defect due to each party’s interest to evidence its innocence and that the other trade is the root cause of the defected work.
The design–build strategy entails some changes in obligations of the contract parties as the design risk is allocated to a competent contractor who can carry on the project design and the construction process as well in a single contract agreement which contributes to project time compression, maintaining the cost and quality (Solis 2009, Tulacz 2006). . This risk allocation approach is a promising means that needs to be supported by the legal contract language which clearly identifies the parties’ obligations and the extent of design liability being transferred to the contractor. The contractor usually assigns a competent design firm to carry on the design process entirely and shall be liable for all the design out puts through a contractual relationship between the contractor and the design firm. The prudent contract parties shall seek a competent legal counsel to draft their needs and agreed terms into contract conditions in order to avoid potential design liability claims and disputes. This paper will provide an overview of the liability and the D&B contract features in addition to the recommendations to mitigate the project claims by using this contract strategy. Due to combining the responsibility for the design and construction in one design builder, all responsibilities are transferred to the design builder to comply with cost, schedule, and quality control (Tianji, et al. 2005).
- Liability of the contract parties
2.1 Contractor’s Standard of Care
The construction contract obliges the contractor to produce the work free of defects, within the agreed quality and as per the signed contract. Similarly, the contractor will be in default if he did not provide the contract requirement and the corrective action to be at his own risk and cost to maintain substantial compliance with the contract documents.
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How to cite this paper: Dief, M.A.; Metwally, A.; Elsayed, A. (2020). Construction Claims Mitigation in Design and Build Contracts; PM World Journal, Vol. IX, Issue VIII, August. Available online at https://pmworldlibrary.net/wp-content/uploads/2020/07/pmwj96-Aug2020-Dief-Metwally-Elsayed-construction-claims-mititation-in-design-build.pdf
About the Authors
Dr. Eng. Moustafa Ismail, CFCCTM, FCIOB, MCInstCES
Egypt- KSA
Dr. Eng. Moustafa Abu Dief. CFCC™, CCP, PMP®, FCIOB, RMP, MInst.CES, Certified Forensic Claims Consultant and he is a Certified Arbitrator with over 30 years of experience in the field in Egypt and Saudi Arabia, mainly in contract and claims domain. Moustafa is delivering training courses in Claims, FIDIC, NEC3 contracts, Forensic cost claims and dispute resolution management. Moustafa, can be contacted at the following: https://www.linkedin.com/in/moustafa-ismail-ph-d-cfcc-mcinstces-mciob-rmp-pmp-ficcp-ccp-93798a16/ moustafa1_ismail@yahoo.com
Amira Metwally
Cairo, Egypt
Amira Metwally is a Construction Management B.Sc. Student, BUE Egypt – email: Amera182538@bue.edu.eg
Ahmed Elsayed
Istanbul, Turkey
Ahmed Elsayed is a scheduling civil engineer at Architect house, Riyadh, Kingdom of Saudi Arabia; he is a Master of Civil Engineering candidate at Altınbaş Üniversitesi Turkey. Ahmed can be contacted at ahmed.elsayed@ogr.altinbas.edu.tr and https://www.linkedin.com/in/ahmed-moustafa-1b69988b/ – http://www.altinbas.edu.tr/tr
