A Contracting Strategy for Managing Risk on Subsurface Projects Delivered Using Design-Build

Subsurface construction projects are risky ventures and the decision to deliver a project using the Design-Build model does not eliminate those risks. Differing site conditions, inadequate design, and delays will continue to plague some projects. The Design-Build procurement model, however, presents a broad opportunity to allocate those risks much differently than in the familiar Design-Bid-Build model. Starting with a philosophical approach to risk and reward, this paper discusses the continuum of possible risk allocation strategies. It concludes with a proposed optimum strategy in terms of the project’s overall economic efficiency, and points to the dispositive contractual provisions that serve to contour the risks.