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Scopes of Work for Design We love to expect, and when expectation is either disappointed or gratified, we want to be again expecting. Samuel Johnson INTRODUCTION The impetus for this investigation was to study how to develop an effective scope of work for design to help ensure that the resulting facility supports the fulfillment of a federal agency's program or mission. Scopes of work for design are contracts. Industry-recognized standard contract forms were considered a natural basis for this study. These documents have been developed through the collaborative efforts of a number of professional associations and sources and are often used as a starting point in developing contracts between facility owners (in this case federal agencies) and designers (typically private-sector architect-engineer firms). In addition to the standard contractual obligations services to be provided, standards, payments, schedule- a significant amount of project-specific information must be conveyed from the owner to the designer in order for the designer to produce design and construction documents that will ultimately result in a facility that meets the owner's goals, needs, and constraints. The scope of work for design must be tailored to each specific project and it must consider the acquisition strategy for that project. The two main questions that need to be answered are: (1) What services will be provided by the owner and/or the designer? (2) What is the project scope of work? COMMONLY USED CONTRACT FORMS The authors reviewed the most widely used standard forms for contracts between owners and designers from three prominent organizations the American Institute of Architects (AIA), the Engineers Joint Contract Docu- ments Committee (EJCDC), and the Design-Build Institute of America (DBIA). The forms are: Standard Form of Agreement Between Owner and Architect with Standard Form of Architect's Services, AIA Document B141-1997, prepared by the American Institute of Architects (1997) Standard Form of Agreement Between Owner and Engineer for Professional Services, EJCDC No. 1910- 1, prepared by the Engineers Joint Contract Documents Committee (1996) 9

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10 STARTING SMART: KEY PRACTICES FOR DEVELOPING SCOPES OF WORK FOR FACILITY PROJECTS Standard Form of Preliminary Agreement Between Owner and Design-Builder, Document No. 520, pre- pared by the Design-Build Institute of America (1998a) Standard Form of Agreement Between Owner and Design-Builder Lump Sum, Document No. 525, (Design-Build Institute of America, 1998b) Standard Form of Agreement Between Owner and Design-Builder Cost Plus Fee with an Option for a Guaranteed Maximum Price, Document No. 530, (Design-Build Institute of America, 1998c) In addition to these standard forms, the authors reviewed some scope of work for design documents used by various federal agencies that were provided by interviewees. All of these documents cover similar topics. They contain boilerplate legal language covering such issues as compensation, termination, dispute resolution, and insurance. The focus of this review is on those contractual clauses that attempt to define the responsibilities of the parties and to communicate the project scope of work and standards of performance to the designer. Given the ownership responsibilities of federal agencies, this chapter emphasizes the owner's accountability and require- ments. These standard documents all assume the owner's leadership of the facility procurement process and satisfactory definition of the project scope of work. Issues Emphasized by AIA The current (1997) AIA document includes some major changes from the previous (1987) edition, includ- ing restructured articles and some entirely new ones. Article 1.1 is a new contract clause entitled "Initial Information" that requires description of the following information: assumptions, project objective or use, physical parameters, owner's program, legal parameters, financial parameters, time parameters, and proposed procurement or delivery method. The clause also requires identification of the owner's and the architect's designated representatives. Article obligates the owner to provide accurate and complete information and states that "the Architect shall be entitled to rely on the accuracy and completeness of services and information furnished by the Owner." Article 2.1 is a new contract clause entitled "Project Administration Services." Article 2.1.2 describes prepa- ration of the project schedule, and Article describes preparation of the project cost estimate. Each para- graph begins almost identically: "When [the] Project requirements have been sufficiently identified, the Architect shall prepare [the schedule or cost estimate]." Clearly, preparation of an accurate project schedule and cost estimate must be based on a defined project scope of work. The document does not explain the standard of sufficiency or the process of assessing the sufficiency of the information. Suggestions for this evaluation are provided in Chapter 3 of this report. Article 2.3 is a new contract clause entitled "Evaluation and Planning Services" that requires the architect to evaluate project information provided by the owner. Article 2.4 describes the design services to be provided by the architect. Three stages of development are identified: Schematic Design Documents (2.4.2), Design Development Documents (2.4.3), and Construction Documents (2.4.4~. The require- ments of the Design Development Documents and the Construction Documents include the owner' s approval of the previous phase's deliverables and updated cost estimates. Issues Emphasized by E,JCDC The 1996 EJCDC form emphasizes similar topics. Article 6.01E states that the owner is responsible for "the accuracy and completeness of all . . . information furnished by OWNER to ENGINEER." Article 6.02 requires the designation of project representatives. Exhibit A, "ENGINEER's Services," identifies three stages of project development pertinent to the scope of this report: Study and Report Phase (A1.01), Preliminary Design Phase (A1.02), and Final Design Phase (A1.03~. EJCDC sets forth a process similar to that described in AIA Article 2.4. The requirements of the Preliminary Design Phase and the Final Design Phase each begin with similar language; the new phase is preceded by the owner's acceptance of the previous phase's deliverables, is subject to modifications made by the owner, and requires written authorization to begin.

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SCOPES OF WORK FOR DESIGN 11 Issues Emphasized by DBIA The DBIA forms are specifically designed to support the unique requirements of the design-build project delivery approach that federal agencies use more frequently. The forms are designed to allow separate procure- ment actions for the schematic design and the detailed design and construction, if desired. A number of the people interviewed for this study described using a design-build approach. Under the Standard Form of Preliminary Agreement Between Owner and Design-Builder (Design-Build Institute of America, 1998a), the "Design-Builder provides a Schematic Design and a Proposal for the completion of the design and construction." Article 2.2 assumes that the project criteria, including the owner's expectations regarding "use, space, price, time, site, performance and expandability," are sufficiently developed and provided by the owner but includes the option for the contractor to develop these criteria as an additional item of work. Article 2.2.2 requires the design-builder to "review and prepare a written evaluation of [the criteria provided by the owner], including recommendations to Owner for different and innovative approaches." These, along with Article 2.3, clearly indicate that development and mutual understanding of the project scope of work precede the sche- matic design effort. Article 2.4.2 requires the design-builder to prepare a schedule for the entire project scope of work, including construction. This comprehensive view of the project is vital for proper management by the owner and the contractor. Article 3 outlines the owner's responsibilities, including the project scope of work, or at a minimum the criteria needed to develop the project scope of work and accurate information regarding the site. Article 4 deals with ownership of the preliminary work product and indemnification issues in the event that a separate contractor performs the detailed design and construction. It is important to clarify these details in advance in order to minimize disputes. DBIA Forms 525 and 530, respectively, are the Standard Form of Agreement Between Owner and Design- Builder Lump Sum and Cost Plus Fee with an Option for a Guaranteed Maximum Price. Both documents deal with the detailed design and construction phases of the work. The owner's "project criteria" is specifically listed as one of the components comprising the contract docu- ments (Article 2.1.7~. This provides the foundation for the design. The degree of project scope definition is an important factor in deciding whether to pursue a lump sum or cost plus contract arrangement for detailed design and construction. In short, a lump sum contract should be based on a well-defined project scope of work. If the project scope of work is not adequately developed, a cost plus contract is more desirable. The instructions for Form 530 discuss the option for establishing a guaranteed maximum price, which "should not be established until [the] Owner's Project Criteria are sufficiently defined. . . setting it too early does not permit reasonable opportunity for scope definition and evaluation of Project risk." ASSIGNMENT OF PROJECT FUNCTIONS OR SERVICES A significant activity of the owner early in the development of the scope of work for design involves determining which functions or services will be performed by the owner and which by the design contractor. At the end of the "General Information" section of the AIA Standard Form of Agreement Between Owner and Architect with Standard Form of Architect's Services is a section entitled "Identifying the Services Needed for the Project." Sixty-eight services are listed as a starting outline for this discussion. There are functions or services that are best performed by the owner, some best performed by the designer, and a number that can be done by either the owner or the designer, based on the owner's capabilities, the designer's capabilities, and the specifics of the project. Anderson et al. (1999) provide an implementation guide for owners to use in making critical decisions regarding the division of responsibilities between owner and contractor. The report's perspective covers the entire engineer-procure-construct portion of the facility acquisition process, so construction functions are included, in addition to preproject planning and design functions. This process must be undertaken on both a strategic basis (i.e., what core competencies will the owner organization maintain through its own personnel?) and a tactical basis (i.e., which functions or services will be procured via contract on this particular project?. Table 1 illustrates the

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2 STARTING SMART: KEY PRACTICES FOR DEVELOPING SCOPES OF WORK FOR FACILITY PROJECTS TABLE 1 Potential Competencies for Alignment Owner Functions ()wner or (contractor Services or Functions (contractor Services or Functions Business development Financial approval Project management oversight Setting project goals, objectives, and priorities Alliances/partnering Benchmarking/metrics Comm~ssioning/start-up/performance testing Conceptual cost estimates Constructability Construction management Convert research to project/scale-up Definitive cost estimates Detailed design Environmental/permits Field quality control Legal/contract administration Lessons learned Maintainability and operability Preliminary design/scope Process/conceptual design Procurement Project controls Project management Planning and scheduling Risk management Safety Team building Technical expertise Total quality management Construction SOURCE: Adapted from Anderson et al. (1999). four functions usually performed by the owner, the one that is almost always outsourced to a contractor (construc- tion), and the 25 additional functions or services whose performance are best determined based on the competen- cies of the owner, the contractor, and the specifics of the project. COMMON ISSUES EMPHASIZED BY STANDARD DOCUMENTS Table 2 summarizes common parameters set forth in the AIA, EJCDC, and DBIA standard documents. All of these authoritative documents agree that a detailed, comprehensive project scope of work is the critical element prerequisite to developing a scope of work for design. They also assume the owner's leadership in the facility procurement process and definition of the project scope of work. The owner is also responsible for identifying the project representatives, or stakeholders, defined in this report as key individuals from functional parts of the organization who will be affected by or have to live with the project; determining which functions or services will be provided by the owner and which by the design contractor; and using a standard process with clearly defined "approval gates" or decision points. The role of federal agencies as the owner in facilities acquisition activities is reinforced in Outsourcing Management Functions for the Acquisition of Federal Facilities (National Research Council, 2000b). "Inherently governmental functions" are defined as those that are "so intimately related to the public interest that [they] must be performed by government employees" and "commercial" functions as those that may be outsourced and

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SCOPES OF WORK FOR DESIGN TABLE 2 Common Issues Emphasized by Standard Documents 13 Owner's role Contractual requirements Development process for scope of work for design Properly divide project functions between the owner and design contractor Provide accurate and complete project information to the designer Provide project scope requirements (or, at a minimum, information to develop project scope requirements) to the designer Identify project representatives early in the process Review and approve the work product at various points in the process Responsibilities of the parties Services to be provided Description and timing of deliverables Payment Insurance and bonds Liability Termination or suspension Notices, severability, and waivers Dispute resolution Ownership of work product Owner provides assumptions, project objective or use, physical parameters, owner's program, legal parameters, financial parameters, time parameters, proposed procurement or delivery method Designer evaluates project information provided by owner Project requirements are sufficiently defined prior to preparation of schedule and cost estimates Design effort is based on a mutual understanding of the project scope of work Design development proceeds in a structured manner, each step predicated on the approval of the previous step and subject to project budget and scope modifications performed by contractors. The report states that a "smart owner of facilities must be capable of performing four interdependent functions related to acquisition: establishing a clear project definition, establishing project metrics, monitoring the overall project process, and providing commitment and stability to the project definition and its achievement (i.e., leadership)." The next two chapters provide specific guidance with respect to implementing these themes.