A Guidebook for Selecting Airport Capital Project Delivery Methods (2009)

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20 Introduction There are numerous issues that airports need to consider when selecting a project delivery method. In this chapter, the information collected during this research on pertinent issues is synthesized for use in Tier 1 and Tier 2 of the selection system presented later in the guidebook. These pertinent issues and their interactions with different project delivery methods are pre- sented in this chapter in the format of a descriptive pro-con analysis. The issues were identified through a literature search, past project delivery research experience, case studies, and inter- views with airport authorities during this effort. These issues are organized into the following categories: • Project-level issues, • Airport-level issues, • Public policy/regulatory issues, and • Other issues. Table 3-1 provides a list of these pertinent issues. In this chapter, each pertinent issue is first defined and then the advantages and disadvantages of each delivery method in dealing with that particular issue are explained. The analysis is based on the trends found in the interviews and is supported by citations from relevant literature. A list of the references used is provided in Appen- dix A. A brief summary is provided at the end of each section that combines the results of the interviews and the literature search. Readers should note that analysis of the pertinent issues in relation to the various project deliv- ery methods is complex. The results presented in this chapter represent trends and, in some cases, national averages for each of the pertinent issues. Each project and each owner are unique. The interaction of a given project delivery method with a given issue may in general be advantageous (or disadvantageous); however, for a specific project this may not be the case. The result of the analysis therefore represents the majority of projects, but not all of them. Furthermore, for the DB project delivery method, the effect of the chosen procurement system (best-value selection or QBS) is described for each pertinent issue if the procurement system has an effect on the project deliv- ery selection decision in the context of that pertinent issue. Project-Level Issues Project-level issues are those that are specific to the project under consideration and include such items as project size/complexity, schedule, cost, risk management/allocation, lifecycle, and maintainability. C H A P T E R 3 Advantages and Disadvantages of Each Project Delivery Method

Advantages and Disadvantages of Each Project Delivery Method 21 Issue 1: Project Size/Complexity This issue reflects both the dollar value and complexity of an airport project based on the type of project. Paving projects, while large in dollar value, can be less complex than systems upgrades for luggage-handling operations. There is a wide variety among airport projects, which include both horizontal and vertical projects that can range in cost from a few thousand dollars to hun- dreds of millions of dollars. For instance, over the past 5 years, Logan International Airport’s projects have ranged in cost from $10,000 to $165 million. Airport projects are sometimes larger than $100 million in value (e.g., terminals); however, air- ports most often undertake smaller projects, such as the construction of parking garages or the renovation of building facilities. Through studying project size and complexity, airports seek to determine which delivery method is suitable for a project with a given size and complexity and how changing the size may impact the choice of delivery method. DBB DBB has been used successfully on projects of all sizes. However, as projects grow in size and complexity, airport oversight of DBB can become burdensome. Two of the interviewed airports indicated that they tend to select DBB for smaller sized projects (less than $10 million) [Logan International Airport, Hartsfield-Jackson Atlanta International Airport]. At least two airports have been hesitant to use DBB for large and complex projects [Tampa International Airport, Hartsfield-Jackson Atlanta International Airport]. CMR This delivery method seems to be more suitable for large projects and projects with complex managerial requirements. This aspect of CMR is due to the increased focus on project manage- ment that is realized through CMR’s preconstruction services, which result in added value to the project (Barnstable Municipal Airport 2007, Kuhn 2007) [Hartsfield-Jackson Atlanta Interna- tional Airport]. Some airports have restrictions on the size of projects with which CMR can be Table 3-1. Pertinent issues for airport projects. Project-level Issues 1. Project size/complexity 2. Schedule compression 3. Schedule growth control 4. Early cost precision 5. Cost control 6. Risk management/allocation 7. Lifecycle costs 8. Maintainability Airport-level Issues 9. Airport experience/staff capability 10. Airport control of project 11. Security 12. Control of impact on passengers and operations 13. Third-party stakeholder input to design and construction Public Policy/Regulatory Issues 14. Competition and local talent 15. DBE/small business impacts 16. Legal and statutory constraints 17. Sustainability and LEED certification Other Issues 18. Adversarial relationships 19. Construction claims

used; for example, Logan International Airport applies this method to vertical projects larger than $10 million. DB This delivery method is usually selected for large and complex projects (Florkowski 2007b). Some airports use DB only in projects that exceed a certain dollar value [Norman Y. Mineta San Jose International Airport]. As an example, DB projects in Logan International Airport must be horizontal and larger than $5 million. Large and complex projects can benefit from the use of QBS with a negotiated price if the airport has experience in negotiating prices on large proj- ects. Best-value procurement shifts more risk for a fixed price onto the design-builder on large/ complex projects; however, airports have successfully procured design and construction proj- ects using this procurement method. One of the airports interviewed has used low-bid DB on three relatively simple green-field building projects. It should be noted however, that the use of low-bid DB is not indicated in most circumstances and will not be considered explicitly in this guidebook. Issue 2: Schedule Compression From the owner’s viewpoint, each delivery method affects project schedule in two different ways: (1) schedule shortening and (2) schedule growth control. The effect of project delivery method on schedule compression will be discussed here. The effect of project delivery method on schedule growth control will be discussed in the next section. DBB DBB uses a sequential process that makes significant schedule compression difficult. This sequential process results in a schedule that is longer than the schedules of the two alternative deliv- ery methods due to the need to complete project designs prior to the award of the construction contract. (Gordon 1994, Walewski et al. 2001). Analysis of the airport interviews shows that the inability to compress the schedule and control time growth (due to delays caused by design errors) in DBB has been one of the main reasons that owners choose other delivery methods. One way of compressing DBB projects is to break a project down into several phases/packages and award each package separately. However, coordinating the efforts of multiple contractors can be problematic; the possibility that abutting primes will interfere with each other’s work is increased and because of this so is the risk of delay claims. CMR It has been shown that CMR has the ability to meet or exceed schedule requirements (Minchin et al. 2007). CMR also has been successfully used to deliver airport projects (e.g., Fairbanks Inter- national Airport) that must be phased due to operational reasons (Storm 2007). This delivery method can also help owners with projects that are schedule sensitive (Walewski et al. 2001) and can save time during the project because of concurrent design and construction (Oregon Pub- lic Contracting Coalition 2000), but some airports have not found this time savings to be a dis- tinguishing advantage for CMR and do not believe that it can save considerable project time [Logan International Airport]. DB Schedule flexibility increases in this delivery method because designer and builder are one entity (Oregon Public Contracting Coalition 2002). Many experts believe that DB results in faster project delivery (Gransberg and Molenaar 2007, Konchar and Sanvido 1998, Molenaar and Scott 2003, Walewski et al. 2001) and has the least schedule growth (Konchar and Sanvido 1998, Scott et al. 2006). All nine airports interviewed for this research cited this issue as the most important 22 A Guidebook for Selecting Airport Capital Project Delivery Methods

reason for choosing DB. Schedule compression will not be significantly affected by the design- build procurement process. Issue 3: Schedule Growth Control This section discusses the effect of project delivery method on controlling and preventing time growth in a project. Schedule growth and project delays have been major problems in construc- tion activities. For example, according to a recent survey (FMI/CMAA Undated), 40 to 50% of all construction phases experience schedule growth. DBB DBB schedule growth tends to be higher than the schedule growth of other project delivery methods. According to NCHRP Report 561: Best-Value Procurement Methods for Highway Con- struction Projects, DBB projects had the greatest average time growth (Scott et al. 2006). Due to the owner’s liability for delays resulting from design errors and the fact that differing site condi- tions will be found after construction award, the owner has limited ability to control project time growth and very little ability to recover the schedule if a delay is realized with DBB. Dallas/Fort Worth International Airport uses DBB when it has no need for speed. CMR Early involvement of the constructor helps the project team develop a more practical and real- istic schedule for the project if construction managers with significant construction experience are selected. Analysis of the interviews with airports shows that this delivery method has the best performance in developing an accurate preconstruction schedule and achieving it. Dallas/Fort Worth International Airport uses CMR when it feels a need for speed. DB Many experts believe that DB has the least schedule growth (Konchar and Sanvido 1998, Scott et al. 2006). Another effect of DB is earlier schedule certainty (AASHTO 2008) because the design- builder submits the project schedule at the time of contract award, before the design is complete. Another important characteristic of DB for airports is that it obligates design and construction funds before the end of a given fiscal year if a project is awarded through a best-value, fixed-price option (Gransberg and Molenaar 2007). This can help airports award the project and allocate available funds to a project without waiting for its design to be complete. Dallas/Fort Worth Inter- national Airport uses DB when it believes speed is of the utmost importance. With the exception of obligating funds, schedule growth will not be significantly affected by the DB procurement process. Issue 4: Early Cost Precision Early and precise project cost estimation is always sought by airports. This section discusses the effect of each project delivery method on the ability to accurately estimate costs. DBB Basing the engineer’s cost estimate on a complete design before advertising the project increases the certainty of cost estimates. Additionally, after bids have been received, the owner learns the value of the project’s scope in the context of current market conditions. The owner also has the opportunity to cancel the project or alter the design and scope, losing only part of the design cost if the bids exceed its budget. The level of cost certainty increases even more when the payment method is lump sum. Advantages and Disadvantages of Each Project Delivery Method 23

CMR This delivery method has two main characteristics relevant to project cost: (1) it is usually com- bined with a GMP payment mechanism and (2) the constructor is involved in the project’s design phase prior to bidding subcontractor work packages. These two characteristics tend to improve cost accuracy in this delivery method. Usually, the owner can negotiate and set the GMP at about 60% design completion (AGC 2004). If the project involves the services of major trades or spe- cialty subcontractors, they can be brought on board during the design phase to furnish technical input to the design. This way, the project team can benefit from their knowledge and experience and establish a more reliable early budget. The drawback is the loss of the opportunity to seek competitive bids on these packages. Some airports are prohibited by law from hiring subcontrac- tors without going to public bidding. Using CMR, the owner will know the estimated cost earlier in the project lifecycle than it would using DBB [Logan International Airport], but it is somewhat difficult to evaluate the validity of the GMP compared with a traditional bid process. The risk is that in some cases it becomes difficult to agree on a GMP with the CMR. Failure to negotiate the GMP in a timely manner may affect the project schedule and increase the project costs. However, the owner always has the option to cancel the CMR contract, pay the CMR for its preconstruc- tion services, and put the construction project out for bids with the completed design [Dallas/Fort Worth International Airport]. DB DB can be procured though both a best-value, firm fixed price or a QBS negotiated price. When design-builders provide a firm fixed price, the airport can establish a firm cost earlier in the process than it can with the other delivery methods (Gransberg and Molenaar 2007, Walewski et al 2001). The AASHTO Guide for Design-Build Procurement states that DB gives earlier cost certainty and has less cost growth compared with traditional DBB based on the fact that highway agencies use firm fixed-price procurements (AASHTO 2008). When using QBS, the airport’s ability to achieve early cost precision is similar to that of CMR. The owner does have one additional advantage with QBS in DB in that the design-builder is liable for designing to cost at a higher standard of care than an engineer in a CMR project delivery approach who has no less knowledge of the costs of the work that they design. In both cases, the major risk revolves around the owner’s ability to precisely define the scope of DB work before awarding the DB contract (Beard et al. 2001). Issue 5: Cost Control Cost control is a project success criterion and can drive owners to select a particular project delivery method according to its ability to (1) reduce total project costs and (2) minimize project cost overruns. DBB The owner of a DBB project has a determined cost estimate based on a complete set of designs, but potential change orders and errors in design may cause considerable cost overruns. The liter- ature shows that although this delivery method has the best performance in accuracy of quanti- ties and design calculations, its ability to achieve post-award budget is the poorest among the delivery methods (Konchar and Sanvido 1998, Scott et al. 2006). CMR This delivery method helps the owner control project costs because of two main characteris- tics: (1) it is normally awarded with a GMP payment mechanism and (2) the constructor is involved in the project design phase, furnishing real-time cost information to assist the designer with keeping to the budget. These two characteristics directly affect the performance of this proj- ect delivery method with regard to project cost control. One advantage is that there may be cost 24 A Guidebook for Selecting Airport Capital Project Delivery Methods

savings because of early constructor input to the project (Oregon Public Contracting Coalition 2000) and also competitive pricing through “open book” contingency accounts (Irwin 2003). Usually, the owner can negotiate and set the GMP at about 60% design completion (AGC 2004), although the GMP can be set at other times depending on the nature of project, the amount of detail available about the design, and the owner’s desire to know the cost as early as possible (National Association of State Facilities Administrators [NASFA] and AGC 2007). Phasing the design to permit the CMR to bid out design packages containing materials with volatile prices such as asphalt or structural steel allows the CMR to reduce inflation risk as well as compress the schedule for fabrication and delivery. Five out of nine of the airports interviewed for this research indicated that this delivery method is often selected for projects with budget constraints. Although this project delivery method helps the owner achieve post-award budgets, close cost monitor- ing on the project is highly recommended due to the manner in which the GMP is established (Walewski et al. 2001). Finally, it is possible to create an incentive to control cost by including a shared savings below the GMP clause in the contract (Kuhn 2007). DB Incomplete design documents at the time of award may result in costly scope changes dur- ing the construction phase [Tampa International Airport]. A TCRP study of major transit projects shows that there were fewer cost overruns with DB than with other delivery methods (Harrington-Hughes 2002). Another study shows that DB outperforms CMR in operations and maintenance costs, unit cost, and cost growth (Konchar and Sanvido 1998). The AASHTO Guide for Design-Build Procurement states that DB gives earlier cost certainty and has less cost growth than traditional DBB (AASHTO 2008). DB also has relatively good performance when there is budget restriction (Gordon & Rees LLP 2005) because it reduces the potential of cost overruns due to claims and delays (Beard et al. 2001). Issue 6: Risk Management/Allocation Each project has some level of uncertainty during various phases of its development. Methods to cope with these uncertainties are inherent in each delivery method. Research in the area of risk man- agement has indicated that the most effective approach in risk allocation is to assign project risks to the parties in the best position to manage them. This means that the party assuming a certain risk should be the party who has the most control over that risk and is most likely to survive the nega- tive impact of that risk (Touran et al. 1994, Allen and Touran 2005). The main vehicle for risk allo- cation is the contract. Thus, the project delivery method will have a profound impact on risk allocation. The effect of each project delivery method on other aspects of risk management like risk identification, quantification, and mitigation is different; therefore, selection of a delivery method is dependent upon the owner’s risk management approach. These differences are considered in this section. It should be noted that the effect of risks is prevalent in many of the issues discussed in this chapter and is not limited to this section. It should also be noted that the concise format of this dis- cussion does not allow for an in-depth treatment of risk management and risk allocation. DBB This delivery method has a long history in terms of statutory laws and standard contracts that entail developed risk management processes. This delivery method can help the owner divide risks between the designer and the constructor, but the risk of additional construction costs resulting from erroneous design remains with the owner (AGC 2004). When the project scope is clearly definable, the owner of an airport can follow the traditional methods of managing risks in DBB (Gordon 1994). Although risks and rewards are easy to understand in this method, disputes often arise over author- ity, responsibility, and quality (Walewski et al. 2001). In other words, the usefulness of having sep- arate contracts for design and construction in helping the owner manage the risks of an airport project depends upon the proficiency and experience of the owner and its consultants in risk man- Advantages and Disadvantages of Each Project Delivery Method 25

agement. For example, one airport [Tampa International Airport] recommended not using DBB in a complex project because DBB does not facilitate the owner’s need to manage project risks. DBB can help in risk allocation through the use of unit price bids as the payment method when the project line items and their cost estimates are known, but the quantities are not known with certainty [Hartsfield-Jackson Atlanta International Airport]. This payment method allows the constructor to bid on unit prices rather than the total price. In this way, the constructor does not have the risk of fluctuating quantities while the owner will not have to pay for constructor’s con- tingencies included in the bid because of quantity uncertainties. CMR CMR can aid in appropriate risk allocation between the airport and the constructor because the CM is hired before a price is negotiated. The “risk” in the term “Construction manager at risk” stems from the CM holding the trade subcontracts and taking the performance risk of the proj- ect (AGC 2004). The risk of design errors and omissions is similar to DBB because the owner holds separate contracts with the designer and CMR. The use of a GMP structure can create a mecha- nism to share cost risk between the constructor and the airport in the hope of ultimately reduc- ing costs. Although GMP as a means of risk allocation should decrease the owner’s risks, there is always a possibility that the owner and the CMR will not be able to consummate an agreement on the GMP in a timely fashion (for example, the CMR asks for more contingency than the owner feels is reasonable [Dallas/Fort Worth International Airport]). The owner in this case would need to terminate the CMR contract and convert it to a DBB project, potentially suffering from the resulting delay in advertising and awarding the construction project and possibly getting bids that are higher than expected. Early constructor involvement may result in a better definition and understanding of the proj- ect risks, allowing a more efficient risk allocation to be achieved [Logan International Airport]. This delivery method is conducive to teamwork. The constructor shares information with the owner and designer on trade subcontracts, value engineering, and so forth. This is one reason some experts believe that CMR theoretically reduces the risks of every entity involved in the proj- ect (Minchin et al. 2007). Although CMR facilitates risk management, it is not necessarily the best method for risk allocation. Having an experienced constructor on board improves the whole process of risk management, including risk allocation, but the increase in the number of parties directly involved in the project and some overlaps among their duties may make the risk alloca- tion more difficult (Touran et al. 2009). DB Risk allocation and risk management are inherently different in DB delivery than they are in DBB and CMR delivery. The risk for errors and omissions in the design is transferred from the owner to the DB contractor. Having single point accountability for design and construction removes the owner from designer-versus-constructor disputes over responsibility for changes in cost or time of project execution (Harrington-Hughes 2002, Irwin 2003, Riley et al. 2005). From the owner’s per- spective, the DB approach reduces the size and frequency of change orders (Molenaar and Scott 2003, Riley et al. 2005). Agencies should realize that although the risks are contractually trans- ferred to the design-builder, a poorly defined initial scope in the RFP may result in significant cost increases. Also, it is not wise to allocate all risk to the DB contractor because that drastically increases the contingency and constructor’s insurance costs, which will be transferred to the owner through the bid (AGC 2004). As the design-builder’s scope of work includes project design, the design-builder may be required to carry errors and omissions insurance (which is usually required from design firms) in this transfer of risks (AGC 2004, Irwin 2003). In essence, the risk for errors and omissions is transferred to the DB contractor. 26 A Guidebook for Selecting Airport Capital Project Delivery Methods

A major point of risk allocation in DB project delivery involves the choice of procurement and payment system. Risk is involved in both the type of procurement system chosen and the point of time in the project development process in which the procurement system is fixed. When DB is used in conjunction with QBS and a GMP, the risks for costs are similar to CMR (except that the DB holds the risk for errors and omissions in the drawings). When DB delivery is used in conjunction with best-value procurement and a fixed price, the design-builder assumes more risk earlier in the process. Primarily, the design-builder is assuming risk for the details of design and the associated costs from time of award through completion of the project. The design- builder commits to a design and a firm price early in the process, and the airport stands at less risk for cost growth. Issue 7: Lifecycle Costs The effects of project delivery methods extend to the operation and maintenance phase. The opportunities or barriers that each project delivery method provides with regard to lifecycle costs are discussed below. DBB The owner is in control of design details and construction quality assurance submittals and can help tailor these details to a project’s long-term lifecycle goals. The owner, through the designer, has the ability to choose the intended lifecycle of all construction components. For example, the designer can specify a pavement mix design that has an expected lifecycle, and the general contractor will bid on that design. Likewise, a designer can closely specify equipment that meets the intended service life. However, DBB allows for little constructor input into lifecycle cost issues. CMR The owner keeps the same level of control over the design of the project as in DBB and also ben- efits from the constructor’s advice regarding future costs of the project. The CMR will be able to provide input to design alternatives that impact lifecycle performance. For example, the CMR may have specific knowledge of how locally available material can impact the constructability of a given pavement design or may be able to comment on first cost issues surrounding design alternatives with equal service lives. However, lifecycle performance criteria must be well understood during the development of the GMP. Once a GMP is fixed, the CMR will have difficulty incorporating any changes into the final product. Additionally, the use of fast-tracking in CMR can also add chal- lenges to meeting lifecycle goals. DB DB creates the greatest challenges with lifecycle performance because many of the products are not defined at the time of award. The airport can use performance criteria to set lifecycle performance standards and rely on design-builder innovation to achieve these standards. If lifecycle issues are difficult to define through performance criteria, a GMP pricing structure could allow for more owner input than a fixed-price option. In the fixed-price option, the owner needs to keep a close eye on the issue of increasing project lifecycle costs mainly because the design-builder must design to the budget defined by the project’s contract amount. This creates a potential conflict with lifecycle costs if the design-builder is struggling to keep the project on budget. In some cases, owners consider multiyear warranties in DB contracts in order to ensure long-term construction quality, but this approach requires resolving many challenging issues (e.g., warranty bond terms, appropriate warranty length, impacts of main- tenance, and so forth). Advantages and Disadvantages of Each Project Delivery Method 27

Issue 8: Maintainability Maintainability is affected by the choice of delivery method in two different areas: level of quality and ease of maintenance. The positive and/or negative effects of each project delivery method on these two areas are described below. DBB In DBB, the owner can check the maintainability of the finished design before awarding the proj- ect. Having checkpoints in the design phase can help the airport ensure the quality of the design of the end product. However, there is little constructor input into maintainability issues. CMR The owner of a CMR project can benefit from all the advantages of DBB and also the con- structor’s involvement in and advice on maintenance of the end product. This is particularly effective if the constructor has previously operated similar facilities [Logan International Airport]. DB As the quality control is transferred to the design-builder in DB and details of the design are not known at the time that the project is awarded, many owners have some concerns about the main- tainability and quality of the end product. This has led some owners to require multiyear warranties from DB contractors. For projects in which maintainability was a key factor to airport operations, such as a people-mover project, the interviewed airports used DBOM [Dallas/Fort Worth Interna- tional Airport, Hartsfield-Jackson Atlanta Airport]. The airport can emphasize maintainability issues through performance criteria and best-value award factors. However, if maintainability issues are not well understood at the procurement stage, they will not be incorporated into the DB contract. Project-Level Issue Summary The results of the interviews with airports and the literature review show the important role of project-related issues in selecting a delivery method. Some factors—project schedule, project size and technical complexity, and cost control—were chosen by almost all the interviewees as factors that directly influenced their selection of a project delivery method. This section has explained the “pros” and “cons” of each project delivery method with regard to those issues. It has also expanded the discussion to issues like risk management and precise cost estimation, which are also important to consider when evaluating project delivery methods. Airport-Level Issues Airport-level issues include issues related to the airport’s staff, the airport’s control over the project, security, and third-party agreements. Issue 9: Airport Experience/Staff Capability This issue mainly concerns the experience of an airport’s staff and their ability to properly administer various project delivery methods. This issue is also focused on the quality and com- petence of an airport’s employees and the need for employees with the particular capabilities nec- essary for successful administration of a selected project delivery method. Owners who have used a project delivery method in the past have a higher level of experience with that method. Also, 28 A Guidebook for Selecting Airport Capital Project Delivery Methods

availability of experienced staff until project completion should be considered when evaluating staff capability. DBB All the interviews show that airports have historically employed the DBB project delivery method and still use this method more than other methods. This experience with DBB can, in some ways, make it a good candidate as a project delivery method (Harrington-Hughes 2002). This depth of staff expe- rience can motivate an airport to use an alternative delivery method or deter an airport from doing so. Some owners who have used DBB in the past may be looking for ways to improve on it by involving the constructor earlier in project development and will therefore try alternative methods. Other own- ers are comfortable with DBB delivery and therefore hesitant to try new delivery methods [Logan Inter- national Airport]. An important issue is the requirement for specific technical expertise in properly administering a design contract and a construction contract. This creates a larger number of required competencies (Touran et al. 2009). The owner in a DBB project must administer two separate con- tracts for design and construction, which requires a relatively large number of owner employees (AGC 2004, Gordon 1994). The owner’s responsibilities in DBB are spread throughout the project lifecycle (interacting mainly with the designer at the beginning of the project and shifting to interact mostly with the contractor after project award); fluctuation in the number of employees required during the proj- ect is minimal. CMR While most of the interviewed airports have used CMR in their projects, it is a relatively new method for airport projects [Hartsfield-Jackson Atlanta International Airport]. Many airports have some experience hiring a CM as a consultant (or Agency CM). (Please refer to Chapter 2 for a detailed discussion of the CM definition.) Nonetheless, airport staff with DBB experience have most of the skills necessary to manage CMR because of the similarities between CMR and DBB (Touran et al. 2009). This project delivery method can arguably require the least number of owner employees because the CMR can expand to meet the owner’s staffing needs (Gordon 1994). While the work can be delegated in CMR, airport staff must have the capability to over- see CMR preconstruction services work (Touran et al. 2009). One missing skill may be negoti- ating the construction manager’s preconstruction services fees and the GMP in CMR. The owner must also be able to manage the relationship between the CMR and the designer. The owner may need to add specific talent to its staff (either as an employee or consultant) if special exper- tise in managing a CMR contract is desired (e.g., in negotiating the GMP or a construction man- ager’s fee). DB There are several airport projects that have been executed using the DB delivery method. Many airports, as well as other public entities, have the managerial experience required for a DB project. Recent research shows that the traditional design and construction engineering tasks performed by public agency professional engineers (e.g., design deliverable approvals and construction inspec- tion) were performed by public agency professional engineers in DB projects, and the owner agen- cies did not change the size of their staff after implementing DB (Gransberg and Molenaar 2007). The primary difference is in managing a contract that contains the designer and constructor as one entity. This difference affects the manner in which the design-builder is procured (i.e., using the best-value method or QBS instead of bidding based solely on cost), the manner in which the design is reviewed, and some aspects of how construction is overseen by the owner. Additionally, in order to use the DB method, airport staff will need to learn how to conduct project oversight without the presence of a completed design for early features of the work. This may require training and a change of skills for owner employees, which may make DB more difficult to administer (Touran et al. 2009). Advantages and Disadvantages of Each Project Delivery Method 29

A recent study shows that owners tend to put their most experienced staff on DB projects because staff on these projects need to be well prepared to understand conceptual designs, con- ceptual estimates, and performance criteria. Typically, only the most experienced staff or hired experts (consultants) have these skills (Gransberg and Molenaar 2007). If QBS is used, the owner will need experience in GMP negotiation and payment procedures just as it would if it were using CMR. Issue 10: Airport Control of Project Airport control over the details of design, the quality of construction, the complexity of a proj- ect, and overall coordination are considered in this section while cost control and time control are discussed elsewhere. DBB Interviews done for this research show that DBB gives the owner the most control over the proj- ect. The owner in this delivery method may benefit from checks and balances by having the designer and constructor under two separate contracts. Having periodic decision points in DBB, mainly dur- ing the design phase, helps the owner control the project’s design (Garvin 2003, Harrington-Hughes 2002, Irwin 2003). Having a specific contract based on completed construction documents helps the owner control construction and material quality. Also, if flexibility is required during construction, DBB allows changes to be made during the design phase at little or no cost. However, changes made during construction are usually accompanied by cost increases. CMR The owner agency benefits from the involvement of the CM in most of the decisions during the design phase. This will mainly help owners of complex projects (Barnstable Municipal Airport 2007). Although the relationship between the owner and construction manager plays an important role in CMR, the owner still has a high level of control in this method. This delivery method gives as much control and flexibility to the owner in implementing changes in the details of design dur- ing the design phase as in DBB. Furthermore, having the construction manager on the team dur- ing design makes implementing changes during construction more effective compared with DBB because the CMR will provide a much needed continuity of construction expertise during the design and construction phases. (Walewski et al. 2001, Minchin et al. 2007). DB Although DB arguably provides the owner with the same quality of design and construction as DBB (FHWA 2006, Konchar and Sanvido 1998), most professionals and interviewed airports agree that the owner loses control over the details of the design that are not clearly defined in the RFP specifications [Memphis International Airport]. Loss of control over the design and lack of checkpoints have the potential to expose the owner to shortcomings in the quality of design and construction (Gordon & Rees LLP 2005, Irwin 2003, Gransberg and Molenaar 2004). The use of QBS and a GMP pricing structure can give the airport more control if it is willing to fix the GMP in the later stages of design development. The option of negotiating the GMP at a later stage should be weighed against the longer period of cost uncertainty for the owner, which can be a con- cern for some agencies. Issue 11: Security Security imposes another level of technical complexity and a potentially high level of liability on all airport projects. Airport security affects both the design phase and the construction phase of projects. Any change in Transportation Security Administration (TSA) codes and standards 30 A Guidebook for Selecting Airport Capital Project Delivery Methods

may result in changes to a project design while the project is being constructed. A delivery method with a high level of flexibility would perform best under such circumstances. Interviews with air- ports did not show any project delivery methods with a clear advantage or disadvantage with regard to security. But it is expected that liability requirements and the need for employee back- ground checks may reduce bid competition, and daily security checks at the entrance gates for laborers and construction deliveries would increase the schedule and increase project costs. The multiple effects of security requirements on airport projects are considered in this section as well as the pros and cons of each delivery method in relation to security. DBB This delivery method gives the highest level of flexibility to the owner during the design phase and facilitates any changes in the design before awarding the construction. Unlike alternative delivery methods, the owner can make changes to design requirements at any point during design without having to amend its contracts with the constructor. CMR In many CMR arrangements, the design of a project is not complete by the time a not-to-exceed budget has been submitted by the CMR; because of this, additional contingencies and allowances may be built into the costs to reduce the risk of changes in security regulations. Nonetheless, it has been noted that “it is important to make sure that the design of the facility allows for flexibility and potential changes without substantial impact by taking into account future changes in the industry and regulatory requirements” (Bechara 2002). The analysis of the interviews with air- ports shows that CMR has the best performance with regard to this issue and compliance with tight security controls. This is mainly due to the close collaboration that results among team mem- bers in CMR. Additionally, in CMR, time is provided during design for the constructors to per- form the required employee background checks. In some airports, the GMP is finalized after the design is complete. DB Coping with changing security codes such as the unexpected enactment of the Aviation and Transportation Security Act (ATSA) in November 2001 is more difficult if a project is based on a fast-track, design-build method of construction with a fixed-price contract after completion of the schematic design phase. On a positive note, DB also provides time during design for constructors to complete employee background checks. The use of QBS with a GMP can provide more flexibil- ity in dealing with unexpected security events and will be similar to CMR. Issue 12: Control of Impact on Passengers and Operations Ideally, airport operations on both the airside and the landside would not be affected by con- struction activities. However, direct or indirect short-term interruptions of operations caused by new projects are inevitable. Owners prefer a project delivery method that helps to minimize these impacts on operations and the flow of passengers. This section discusses each delivery method in terms of its ability to allow the coordination of construction activities with airport operations man- agement in order to minimize construction impacts. DBB The owner can include the requirements for operations management in the design and prepare bid documents and project schedules based on prevailing operating constraints. The airport’s control over the design provides the airport with an option to phase the construction and divide the project into several packages in a way that minimizes impact on operations and passenger flow (Florkowski 2007a). Advantages and Disadvantages of Each Project Delivery Method 31

CMR Having the CM’s expertise in coordinating subcontractors and negotiating with other involved parties helps the airport decrease the negative impact of construction activities. Allocating impact control responsibilities among the increased number of parties involved in a CMR project is a drawback of this delivery method. The opportunity for the constructor to work with operations earlier in the process is a distinct advantage. Additionally, the enhanced ability to phase the proj- ect because there is a guaranteed single construction contractor across all phases allows the airport to optimize the impact of construction with operations and passenger flow. DB The interviews conducted for this study show that DB has the ability to minimize a project’s inter- ruptions of routine airport operations [Tampa International Airport]. The design-builder fully con- trols the impact of the project on airport operations and must directly implement measures in a project’s design and construction schedule to conform to airport operational constraints. The air- port can articulate these requirements as project performance criteria or specifications. As in CMR, the opportunity for the constructor to work with operations early in the process in DB is a distinct advantage. Additionally, if minimizing operational impact is critical to project success, the airport can require inclusion of a plan to minimize operational impact in the DB proposals and use it as a key factor in the evaluation and award process (Beard et al. 2001). Issue 13: Third-Party Stakeholder Input to Design and Construction This issue concerns the effect of each delivery method on promoting coordination and project- specific agreements with third parties—such as political entities, utilities, adjacent communi- ties, and so forth—involved in the project or affected by it. This issue also encompasses the opportunities afforded by a delivery method to an owner for coping with community input. A delivery method should strive to leverage stakeholder and community input to achieve project goals in a meaningful and transparent fashion. DBB Most permitting agencies’ procedures have been established on the assumption that a 100% complete design will be available for review prior to permit issuance. Thus, DBB’s linear delivery process allows the most time for potentially lengthy negotiations with some project stakeholders. It gives some flexibility and time during the design process for the owner to obtain needed permits/agreements before construction begins. Third parties, on the other hand, have the ability to examine 100% complete designs before a contractor is hired. The disadvantages of completing designs before hiring a contractor may include a lengthy design schedule (including numerous instances of stakeholder inputs that can disrupt the most generous schedules) and also a lack of construction contractor input into the third-party agreements. This delivery method also puts the burden of securing all the permits on the owner. CMR The main advantage of having a CM is the constructability advice (for example, construction knowledge and an understanding of construction methods) during the development of third-party agreements. In comparison to DBB, CMR may have a significant effect on getting third-party agreements if the owner makes the responsibility of obtaining these agreements a part of the CMR contract (Touran et al. 2009). In general, the CMR’s knowledge of construction processes and sequencing can help clarify various aspects of project impact on communities and institutions; this can increase community confidence and thereby help in obtaining community consent and stake- holder agreements. 32 A Guidebook for Selecting Airport Capital Project Delivery Methods

DB The DB process can help move third-party agreements to consummation early in the project delivery process, often before the design is complete. Airports need to get all the important inputs from stakeholders before issuing an RFP because changes in the project after award are disrup- tive and potentially costly. Airports have experienced both benefits and drawbacks from having the DB contractor on the team before all third-party agreements are in place. As design and con- struction are awarded in one contract, the time available to develop agreements with other par- ties can be compressed. Additionally, these agreements must often be written in performance terms because the design is not completed at the time of award. However, the designers and con- structors on a DB team often have long-standing relationships with third-party stakeholders that they can leverage for the benefit of the project. Constructors have different approaches to nego- tiating agreements with third parties than owners, and these approaches can often be very effec- tive (Touran et al. 2009). Additionally, the airport can require the DB contractor to include a public information and outreach program in the project to facilitate stakeholder input during design and construction. A caution is that any third-party change after the award of a fixed price or negotiation of a GMP in a DB delivery method can be costly or difficult to negotiate. Airport-Level Issue Summary Airport-level issues directly impact an airport’s operations and its project delivery staff. Some of these issues, such as the experience and capability of airport staff, play an important role if a switch is being made from the traditional DBB project delivery method to alternative delivery methods such as CMR and DB. Many airports prefer to use DBB unless their goals cannot be readily achieved by this traditional project delivery method. Other issues presented in this section are specific to airport projects. For example, “control of impact on passengers and operations” mainly concerns the flexibility of each delivery method in relation to project phasing and rescheduling to mini- mize construction impacts on regular activities of an airport. “Security” is another example of an airport-specific issue. Security codes, tight controls, and background checks decrease competi- tion, complicate project scheduling, and increase project cost. However, when considering airport- level issues in the process of selecting a project delivery method, the most important areas to consider are the owner’s control over the project and flexibility in the design phase. In all cases, the airport’s ability to articulate well-defined project objectives and a clear scope using the given deliv- ery method is the key to success. Public Policy/Regulatory Issues This section examines the choice of project delivery method in relation to public policy and regulatory issues such as existing laws, mandated social programs, labor unions, and other fac- tors that establish the legal environment in which a project must be delivered. Issue 14: Competition and Local Talent Each delivery method may affect the level of competition. In many cases, airports are operat- ing under a legal requirement that requires “free and open” competition; for example, Port Columbus International Airport is required by state law to bid out any project more than $25,000. Owners benefit from a competitive market mainly because of the reduction in bid prices. If choosing a certain project delivery method reduces the level of competition among bid- ders (or reduces the number of qualified bidders), this would be considered a disadvantage. Air- side design and construction projects normally have less competition than landside projects because of specialized knowledge, skills, and experience [Logan International Airport]. Advantages and Disadvantages of Each Project Delivery Method 33

Currently, the volatility of bid prices in transportation projects is a major concern for the own- ers of airport projects. Additionally, alternative project delivery methods may inadvertently lead an airport to package projects in sizes that can effectively reduce competition. Local talent can be an advantage or disadvantage of each delivery method depending on the available capacity of local companies. For example, availability of general contractors with DB experience in the area where the airport project is executed should be considered an advantage of DB. On the other hand, some airports may be located in areas where there are relatively few firms familiar with CMR or DB con- tracting, making the use of alternative delivery methods a disadvantage in those areas. In the following paragraphs, the ability of each delivery method to facilitate competition and employ local talent is evaluated. DBB Compared to other delivery methods, the availability of a relatively large pool of potentially qualified bidders ensures a high level of competition (AGC 2004, Walewski et al. 2001). The owner can benefit from this market competition and get a low bid for its project. This approach also enables the owner to divide the project into smaller packages and bid them out separately to further increase competition. The drawback to the multiprime approach is that the coordina- tion between various contracts may prove difficult. CMR Using RFP procedures and taking into consideration qualifications-based factors when eval- uating the bidders can help the owners weed out unqualified proposers. The issue in this method is that the selected CMR constructor becomes the de facto winner of the construction contract, giving the owner less competitive leverage when pricing the construction (Irwin 2003). This can be alleviated to some degree by requiring that the project components be bid out competitively among various trade subcontractors. The potentially negative effect of this requirement is that the CM may be reluctant to set a GMP until all the sub-bids are in. The owner can reserve the right to go to regular bidding if it cannot agree on a GMP with the CMR, although that decision may entail some extra cost and schedule delay. DB The RFP or qualifications-based procurement process can weed out unqualified DB entities. Nonetheless, the size of the bid package, the experience required to lead a DB team, and the bid preparation costs may reduce the number of qualified bidders (AGC 2004). Issue 15: Disadvantaged Business Enterprise (DBE)/ Small Business Impacts The law imposes requirements and provides guidelines for DBE participation on federally funded airport projects [Hartsfield-Jackson Atlanta International Airport, Port Columbus Inter- national Airport, Colorado Springs Airport, Denver International Airport]. Project delivery methods may facilitate fair competition for DBEs for airport contracts and reduce burdens on small businesses. The effect of each project delivery method on promoting participation by dis- advantaged businesses is discussed below. DBB In DBB, the owner has the chance to include requirements for DBE participation in both design and construction contracts. For example, in the RFP for soliciting design services, the owner may stipulate the nature and extent of DBE participation as part of the design team. In the same way, the owner may require that the general contractor perform a preset percentage of construction using DBE subcontractors. Usually, the minimum level (as well as the desired target level) of 34 A Guidebook for Selecting Airport Capital Project Delivery Methods

participation is stipulated as a percentage of the contract price. On the other hand, the low-bid environment of DBB may force DBE subs to submit dangerously low prices, potentially harm- ing the future viability of these fledgling companies. CMR A constructor that submits a proposal for a CMR project is usually more sophisticated in deal- ing with a design team and understanding project objectives than a DBB general contractor. In QBS, the lack of experience of some DBEs can be a disadvantage. One method to ensure DBE participation is to require a preset minimum (and target) percentage of the GMP for DBE firms. DB Lack of experience and sufficient financial strength may prevent a DBE from becoming a lead contractor in DB, but small businesses and DBEs may participate as subcontractors of the design- builder. As the owner is not directly involved in selecting subcontractors and suppliers, require- ments for DBE participation as a percentage of the project budget should be included in a DB RFP and then in the contract. This percentage should be based on the number of DBEs associated with the various trades that will be required in the project. The design-builder then periodically reports on the actual payments to all the DBE subcontractors and suppliers. The use of fixed-price pro- curement early in the project development process will not facilitate the identification of DBE contractors as well as the use of a GMP negotiation later in the process. As the owner has less con- trol in this project delivery approach, the enforcement of DBE participation may be more diffi- cult than in DBB or CMR. Issue 16: Legal and Statutory Constraints Research done on federal laws shows that airports are allowed to use alternative project delivery methods (49 USC § 47142). State and local codes may have their own restrictions. Some states man- date that airports go through several justification and approval steps before being allowed to use an alternative project delivery method. Additionally, there may be other legal issues. For example, labor union issues, environmental impact permits, and rules for the bidding process may conflict with the procedures of a project delivery method and make it difficult for the owner to use that delivery method. Also, a well-tested and streamlined procedure for a delivery method, achieved after many applications is considered an advantage for that delivery method. The interactions between each project delivery method and legal and statutory constraints are explored below. DBB DBB is accepted as a delivery method for an airport project by all state codes. Relevant procure- ment processes are well developed, and the details of DBB execution are available nationwide. In this delivery method, the contractor hires laborers directly or through a subcontractor. Union or non-union labor may be used in this method (unless local conditions and considerations limit a constructor’s options), and there would be no fundamental opposition to DBB unless the contrac- tor failed to comply with the relevant rules and regulations. The open bid procedure does not con- flict with state codes and does not impose any ambiguity or difficulty for the airport if the project is awarded to the lowest bidder. Finally, the procedures are well established, with a long history of application. CMR The at-risk CM is usually selected through a qualifications-based process, and then the contract price is determined in a negotiation between the owner and the CMR. This may con- flict with state codes that require open bidding for any construction project. The construc- tor in this project delivery method plays a role similar to the general contractor in DBB, and Advantages and Disadvantages of Each Project Delivery Method 35

there would be no fundamental issues between the unions and the constructor. If there are union issues in the project’s location, the CMR’s ability to guarantee the maximum price of the proj- ect will be at risk, and the CMR may not be willing to absorb the risks of the labor union issues. Unions may support alternative project delivery methods because these methods weight the importance of qualifications over the importance of cost, and unions assert that their members are more qualified than non-union labor (Bearup et al. 2007). DB Design-builder selection can be accomplished through best-value or qualifications-based procedures that typically include factors related to the qualifications of the bidder and the pro- posal. This approach to selection may conflict with traditional hard dollar bidding for some airports with no experience with these procedures. Also, the DB entities on large megaprojects (>$100 million) are usually joint ventures that dissolve after the end of the project, and this may make the process of dealing with unions a bit complicated as the joint venture entity may not be a signatory to the prevailing union agreements in the area. Awarding the design to a design- builder in places where public design engineers have their own unions (e.g., California) may cause public design engineers to view the use of DB as a threat to their job security. As with CMR, labor/craft unions may support alternative delivery methods in which qualification rather than cost is the basis of the award because unions assert that their members are more qualified than non-union labor (Bearup et al. 2007). Choice of procurement method may also affect the ability of some airports, as they may not be allowed to use a QBS procurement sys- tem [Hartsfield-Jackson Atlanta International Airport]. Also, sometimes environmental agen- cies may require a complete design before issuing the necessary permits. This will create an obstacle for the use of DB. Issue 17: Sustainability and LEED Certification Sustainable design and construction features are becoming more common and may become mandatory in the future for public infrastructure projects. Thus, it is important to gauge a proj- ect delivery method’s ability to include these features in accordance with the owner’s needs. The U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) cer- tification is often used by public agencies as a means to articulate their desire to design and build both energy-efficient and environmentally responsible projects. For example, Sacramento International Airport’s preferred concept for the new Central Terminal B includes LEED cer- tification as an objective. Although LEED certification has not become a requirement in airport projects, how each delivery method functions with regard to this issue can be a benefit or a drawback. For example, one benefit of establishing LEED as a criterion is that it can be used as a metric to evaluate sustainable design and construction options regardless of whether LEED certification is sought for the project. LEED prerequisites (including selection of site and con- struction activity pollution prevention) can yield environmental benefits while reducing regu- latory risk. On the other hand, sustainability requirements may increase project costs because of extra technical features and documentation, as well as the requirement to have certified proj- ect personnel. One important fact to remember is that sustainability standards are evolving. The adoption of LEED criteria as a selection requirement may need to be phrased to indicate that the most current iteration of LEED criteria should be consulted rather than a particular, exist- ing standard. DBB With DBB, the owner has a clear opportunity to define sustainable design intent and shape social and environmental impact. This method presents opportunities to promote and enhance sustainable design criteria by allowing for materials research and the development of strategic 36 A Guidebook for Selecting Airport Capital Project Delivery Methods

stakeholder input. The builder’s lack of input in DBB means that there will be little opportunity to take advantage of builder knowledge of sustainable design, and in certain cases, the owner may not achieve its sustainability goals (e.g., getting a LEED certificate for the project). CMR With CMR, the owner has a unique opportunity to realize economic returns for sustainable systems performance as well as to use sustainable construction experience as an evaluation fac- tor for the selection of a builder. With this project delivery method, sustainable construction features are more likely to be implemented because of the cooperative nature of the owner/ constructor contracts. The contractor’s early involvement in the design process can help in performing meaningful industry-based, cost-benefit analyses for various LEED components. DB The owner can clearly articulate expectations regarding sustainability by assigning weight to sustainability in relation to other factors in the DB evaluation plan. This can be done with either a best-value process or QBS. The design schedule could, however, impact public participation and thereby limit social equity issues. Due to the normally time-consuming processes associated with municipal and state requirements for mandatory announcement and the convening of public hearings, certain sustainability measures—such as wetlands mitigation and avoidance of unde- veloped areas—raise concerns for eminent domain and brown-fields redevelopment that can impact time performance. There is some evidence that the use of DB may hamper the objective of achieving LEED certification. This is due to the perception of risk by the DB contractor when considering whether to bid on a DB project with LEED goals. The owner needs to be careful to define the project scope and goals clearly to ensure reasonable competition, especially if LEED certification is desired. Public Policy/Regulatory Issue Summary An airport has little if any ability to change public policy or regulatory issues. These issues include specific legal or governing body policy constraints on project delivery method use and legislative requirements for public works projects. Many of these issues are essentially go/no-go factors that may eliminate a delivery method from any further consideration in the decision-making process (e.g., methods not allowed per state statute or local governing ordinance). While some issues dis- cussed in this section are found to have minimal impacts on decision-making (e.g., DBE impacts) there are some other issues that strongly affect project delivery method selection. Competition and local talent is one of these issues. The researchers found that competition and availability of local talent are of relatively high importance for decision-makers and can sometimes become a driving decision-making factor. Other Issues The “Other Issues” category consists of issues that are important to project success but not categorized previously in this chapter. Issue 18: Adversarial Relationships Airport projects can be hampered by conflicts between parties to the design and construction contracts. The higher the level of adversarial relationships in a project, the more likely it is that the project will suffer from cost, schedule, and quality problems. Delivery methods define the rela- tionships among all project parties. If the project delivery method encourages project parties to Advantages and Disadvantages of Each Project Delivery Method 37

work together as a team to achieve project goals and characteristics, it is considered a benefit. Con- versely, if the project delivery method increases the possibility of adversarial relationships, it is considered a detriment. DBB This delivery method can create an adversarial relationship among the parties to the contract— mainly between the owner and the construction contractor (Irwin 2003, Mahdi and Alreshaid 2005, Walewski et al. 2001). Furthermore, the engineer and the contractor may assume adversar- ial roles as one is in charge of approving the other’s work. The division of responsibilities may also result in these two parties blaming each other in case of project failures or during major disputes (Halpin 2006). CMR The inclusion of the construction contractor during the design phase in e CMR builds con- structive teamwork and facilitates project team formation (Irwin 2003, Minchin et al. 2007) although it requires extensive coordination of consultants and/or subcontractors. DB Having a single point of responsibility for design and construction, as in the DB method, decreases the potential for conflict between the engineer and constructor (Halpin 2006, Harrington- Hughes 2002, Walewski et al. 2001). Although in DB there should be less conflict between the designer and the constructor (since they are both on the same team and they are jointly responsi- ble to the owner for the success of the project.), instances of internal disputes are sometimes observed in DB projects (Touran et al. 2009). It is worth mentioning that design-builders may be deterred from submitting claims to owners who have future DB projects because they will want to avoid decreasing their competitiveness for future projects awarded on a QBS system by making the owner angry with a claim. Issue 19: Construction Claims The effect of each project delivery method in exposing the airport to potential conflicts and claims is discussed below. If a delivery method can reduce the number of construction claims, that delivery method is a favorable choice, and if it increases the possibility of construction claims, it is an unfavorable choice. DBB This method typically has the highest occurrence of claims and disputes. Disputes often arise over authority, responsibility, and quality (Walewski et al. 2001). Furthermore, as the owner is responsible for design completeness, errors and omissions claims are common in DBB projects. Some contractors may bid low to win a job and try to enhance their final profit margin through claims and change orders, especially if design errors or ambiguities are pres- ent in the construction documents. Studies have shown that this delivery method resulted in the highest rate of cost growth, which could be an indication of a large number of claims (Konchar and Sanvido 1998). CMR Assuming a well-structured contract, there is less possibility for claims and disputes in CMR once a GMP is agreed upon and the contract is signed. Because the CMR is present during the design process, there is less need for information and clarification of the design documents. Some professionals think that this method results in very few construction claims (Touran et al. 2009). The QBS methodology creates an effective deterrent to initiating claims by requiring the CMR to 38 A Guidebook for Selecting Airport Capital Project Delivery Methods

be successful on the current contract in order to be competitive for future projects. The QBS process may reduce the possibility of hiring litigious contractors. DB Analysis of the interviews conducted for this study shows that the DB delivery method is less prone to claims and disputes, assuming a well-structured contract. For example, claims for design errors, a major source of DBB contractors’ complaints, are reduced considerably in DB. At the same time, early pricing leaves the owner vulnerable to claims for scope that was missing in RFP. The QBS methodology creates an effective deterrent to initiating claims by requiring the design-builder to be successful on the current contract in order to be competitive for future projects. It has also been shown that the size and frequency of change orders are smaller in DB projects (Riley et al. 2005). Other Issue Summary This section covers two important issues not directly addressed in other sections. Both of these issues concern relations among parties involved in a project. Construction claims and adversar- ial relations can hamper project success and shift the owner’s focus from project success and qual- ity to dispute resolution. Conclusion The analysis done in this chapter is not deterministic. It only describes the advantages and dis- advantages of delivery methods in relation to each of the pertinent issues discussed, based on material found in the literature or information gathered during airport interviews. This descrip- tion, in turn, can be used to help identify the strengths or weaknesses of each delivery method in relation to important factors that can affect project goals. This analysis provides a broad picture of the issues affecting project delivery methods and develops a basis for the decision system that is introduced in the chapters that follow. Advantages and Disadvantages of Each Project Delivery Method 39