Legal Issues Related to Large-Scale Airport Construction Projects (2020)

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Legal Issues Related to Large-Scale Airport Construction Projects Copyright National Academy of Sciences. All rights reserved. 32 ACRP LRD 38 cost, similar changes under a lump-sum DB contract can lead to significant cost and schedule impacts and/or related disputes with the designer–builder. Insurance: Similar to the progressive DB case study, for the lump-sum DB project, the airport implemented an OCIP. However, in contrast to the progressive DB case study, the owner does not intend to use OCIPs in the future. From the airport’s perspective, substantial experience is required to man- age OCIPs effectively, and the airport did not have this expe- rience. In addition, the airport determined that it was difficult to gauge whether the OCIP was ultimately more cost-effective than a CCIP or other approaches to insurance that it had more experience using. Project handover: The most significant lesson learned by the airport from the lump-sum DB case study was the need for the designer–builder to play a significant role in training those that will ultimately operate and maintain the facility. To this point, the owner required the designer–builder to operate the facility for a number of months after completion in order to adequately train the incoming airport staff. The issues related to environmental permitting, liquidated damages, and the dispute resolution processes were fairly typi- cal compared to DBB projects. REFERENCES ACC (Airport Consultants Council) (2008). Improving the Quality of Airport Projects: ACC/FAA Best Practices. FAA and ACC. https://www.acconline.org/documents/ Resources/ ACC_FAA_Best_Practice_Final.July08.pdf. (Access June 13, 2018) ACINA (Airports Council International–North America), Air- port Consultants Council, and Associated General Contrac- tors of America (2012). Airport Owner’s Guide to Project Delivery Systems, 2nd ed. Associated General Contractors (2004). Project Delivery Sys- tems for Construction. Associated General Contractors of America, Arlington, VA. Ahasic, M., and M. Sheren (2017). Development at U.S. Airports: A Summary Look at Future Trends and Op- portunities. Airport Consultants Council. http://files. constantcontact.com/8c363cd8001/7631b49f-6d62-43cc- 983a-2eb52d16d233.pdf (accessed June 15, 2018). AIA (American Institute of Architects) (2007). A201-2007: General Conditions of Contract for Construction. https:// www.aiacontracts.org/contract-documents/24566- south-carolina-office-of-the-state-engineer-version-of- aia- document-a1012007-standard-form-of-agreement- between-owner-and-contractor-where-the-basis-of- payment-is-a-stipulated-sum (accessed June 16, 2018) AIA (American Institute of Architects) (2017). A201-2017: General Conditions of Contract for Construction. https:// www.aiacontracts.org/contract-documents/22076-general- conditions-of-the-contract-for-construction (accessed May 18, 2018). C. Conclusions from Lump-Sum DB Case Study Project While the lump-sum DB delivery method has been used in other sectors for decades, it is still relatively new to the airport industry. To this point, the lump-sum DB case study in this digest was the first lump-sum DB contract used by the airport procuring the central utility plant. Below are the major conclu- sions drawing from the case studies conducted, as pertinent to the various legal issues studied: Selection of lump-sum DB: The airport decided to pursue lump-sum DB for several reasons, including (a) the reduction in project delivery time by combining the design and construction phases of the project under a single contract, (b) cost certainty early in the design phase, and (c) the ability to shift risks related to the interface between design and construction. Procurement process: The airport used a three-step method to procure the designer–builder. The first step required pro- posers to meet a minimum score based on qualifications alone. The second step required proposers to meet a minimum score for their proposed design solution. Finally, the third step had the airport select the eventual designer–builder based on which of the remaining proposers submitted the lowest bid. The air- port found this to be an effective—though expensive—way to select a designer–builder. The airport for the central utility plant project used several innovative procurement tools on the project, including a question-and-answer process, confidential one-on-one meetings with proposer teams, an aesthetic review process, and an alternative technical concept process. Though innovative, there were no legal challenges related to the airport’s use of these tools and the owner is confident that these tools— especially the alternative technical concept process—resulted in significant cost and time savings on the project, which it could not have realized using DBB. Contract management: From the airport’s perspective, the lump-sum DB project needed to be managed differently, when compared to a typical DBB project, in order to avoid claims and legal challenges. These differences included (a) early (and contin- uous) training of airport staff regarding the more limited nature of design reviews under the lump-sum DB delivery method in order to avoid potential change orders for owner- directed changes; (b) significant outreach to airport management and stakeholders to educate these individuals on the lump-sum DB process; (c) outreach to potential contractors (especially small businesses) to educate them on the project and chosen delivery method; and (d) early outreach to and involvement of operators and end users of the facility to be able to address their concerns about procurement and contract documents. Design and construction management: The most signifi- cant lesson learned by the airport was the need to involve execu- tive management on key design issues and educate them about where legal liabilities related to design risk lie in lump-sum DB contracts. In contrast to a DBB project, where executive man- agement can change the design during the design phase with limited impact, except increase (or decrease) in construction

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