ASCE’s Committee on Claims Reduction Management recently held a workshop on reducing the engineer’s risk when working on alternative delivery projects. Attendees included senior executives from some of the world's largest engineering firms, owners, attorneys and other professionals from around the United States.
The following are some of the key takeaways (not attributed to any one person or firm):
1. Know your risks
It’s important for the owner and the design-build team to understand what risks are allocated to each party. It’s even more critical for the engineer to understand the risks they are taking regarding scope of services, schedules, and budgets.
It was generally recommended that engineers develop a risk register at the start of the project during proposal preparation. It is important to understand the potential risks before entering into an agreement.
Always remember: Don’t be afraid to walk away from a project where you feel the risks are too high.
2. Know your team
Successful teams are usually formed well in advance of the advertisement for requsets for quotes and requests for proposals. Confirm everyone on the design team understands who the client is. For design-build, the engineer’s client is usually the design-builder, not the project owner.
3. Know the agreements
Teaming agreements are key to successful projects and should be in place before you start preparing the proposal.
It can be helpful when the teaming agreement and then design-builder/engineer agreements include an internal-disputes resolution clause. That clause could include a requirement to hold quarterly meetings. The clause also could address how decisions are made on contingencies and quantity changes.
Also, review the owner/design-builder agreement, including the indemnification and “mandatory” flow-through clauses. Do not accept anything more than “ordinary standard of care.”
4. Know the decision-makers
When making a “go/no-go” decision, try to understand who is on the selection panel and identify the decision makers. Try to understand from past selections how the client arrived at the decision to select that team.
5. Know the timeline
Ideally, the design team should work with the construction team to develop a complete project schedule that considers the design process, which may include but are not necessarily limited to reviewing submittals, working through design and project changes, responsibility for major quantity differences uncovered during the design phase, permitting, and other design-team tasks.
The project schedule needs more than one line for design. It should include design reviews and allow time for working through design and constructability review comments. The schedule should also include submittals and review periods. Schedule changes should be agreed upon by design-builder/contractor and engineer.
The Committee on Claims Reduction Management will conduct a follow-up workshop, May 1-2, 2025, at ASCE headquarters in Reston, Virginia.
Learn more at ASCE’s Risk Management Hub.
Read more helpful insights from the committee’s Claim Reduction series on the Civil Engineering Source.
