How do you manage risk and liability in DB contracts for IPD compared to DBB contracts?

1 Risk allocation

One of the main advantages of DB contracts for IPD is that they reduce the risk of design errors, cost overruns, and schedule delays. This is because the design-builder assumes the responsibility for both the design and construction phases, and works closely with the owner and other team members to optimize the project outcomes. The design-builder also has more flexibility and control over the project scope, budget, and quality, and can implement changes more efficiently. In contrast, DBB contracts separate the design and construction phases, and require the owner to manage multiple contracts and coordinate between different parties. This increases the risk of miscommunication, conflicts, and inconsistencies, and exposes the owner to claims and litigation.

2 Liability exposure

Another benefit of DB contracts for IPD is that they limit the liability exposure of the project participants. This is because the design-builder acts as a single point of contact and accountability for the owner, and can indemnify the owner from any claims arising from the design or construction defects. The design-builder also carries the professional liability insurance and the general liability insurance, and can share the risk with the subcontractors and suppliers through subcontracts and subconsultant agreements. Moreover, the IPD approach fosters a culture of trust, transparency, and cooperation among the project team, and encourages them to identify and resolve issues early and collaboratively. On the other hand, DBB contracts create a more adversarial and fragmented relationship between the owner, the designer, and the contractor, and increase the potential for disputes and lawsuits. The owner may face claims from both the designer and the contractor for errors and omissions, delays, and extra costs, and may have to bear the burden of proof and the legal costs.