Tunnel Business Magazine

OCT 2018

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TUNNELINGONLINE.COM TBM: TUNNEL BUSINESS MAGAZINE // OCTOBER 2018 is essential to effective and balanced risk allocation. As noted above, there is much oppor- tunity in DB for significant variations in risk allocation approaches. The IRAB ap- proach should produce greater proximity and contractual alignment in owner and design-builder risk allocation and cost/ pricing expectations sooner and more effi- ciently than otherwise would occur if that alignment were deferred and achieved potentially through a series of avoidably contentious post-award DSC and breach of implied warranty claims asserted dur- ing the design and construction processes. That said, some owners, and some design- builders, may be content with, or even prefer, the otherwise prevailing uncer- tainties and gambles as to risk and cost/ pricing, and the suspense of deferring the reconciliation in ultimate alignment of ex- pectations through a claims dispute reso- lution process. The competing perspectives and pref- erences, and associated decisions (or imposed outcomes rendered by default through the vagaries of legal process) on these issues are simply representative of the dynamics and options inherent in the macro spectrum of considerations that in- fluence and account for the significantly variable approaches to risk allocation in DB subsurface projects. nc s n Achieving effective and balanced risk allocation in DB subsurface projects is challenging and complex, significantly more so than in DBB. In many contempo- rary DB risk allocation schemes seemingly precise and autonomous risk allocation boundaries (or triggers) for subsurface conditions and design adequacy risks often ignore the realities, impacts, and influences of the DII Factors. An insular and fragmented approach to subsurface conditions and design adequacy risk allo- cation interposes artificial and imprudent boundaries among the DII Factors; disre- gards and is dissociated from the impacts and influences of the DII Factors; is dys- functional; and, consequently, will likely not produce effective or balanced risk al- location decisions in DB. A more integrated, concerted, cohesive, comprehensive and contractually trans- parent and documented approach to risk allocation is indicated so as to produce a substantially improved and more effective and balanced result. The efficacy of the IRAB approach critically depends on the following com- ponents: • The owner's furnishing to tender- ers adequate subsurface data and evaluations; • The design-builder's ability to rely upon and use that data and evalua- tions and, as appropriate, having ad- equate time to conduct its own inves- tigations and evaluations; • The design-builder's adequate op- portunity and time to preliminarily develop its permanent design basis approach to a level sufficient to vali- date the suitability, compatibility and constructability of that design in the anticipated subsurface condi- tions; and • The owner's willingness to contrac- tually commit to sharing with the design-builder subsurface condi- tions risk. There is no precisely correct or prescrip- tive risk allocation approach, nor one that is universally applicable to all of the vari- able project-specific factors inherent in DB subsurface projects. The search and quest for such approaches are not realistic objectives. Rather, the objective should be focused on communication and discus- sion of alternative approaches that may improve and guide the goal of achieving effective and balanced risk allocation. Improvement of risk allocation in DB subsurface projects depends upon the un- derground industry's enhanced receptiv- ity and capacity to acknowledge, under- stand and balance the DII Factors with due consideration to the respective and differ- ing roles, responsibilities and interests of the owner and design-builder. The sources of most problems primarily originate with those parties, and those same parties should primarily (and collaboratively) be responsible for the solutions. One of the few certainties is that DB risk allocation will remain controversial; but a subject that needs to be confronted and candidly discussed, especially among those in the industry; and in a manner that encourages and fosters new ideas and robust dialogue, and balanced consensus transcending purely partisan interests. To not do so will, with parallel certainty, ex- acerbate the complication, frustration, and risk for all involved. "The fault, dear Brutus, is not in our stars, but in ourselves, that we are un- derlings." Shakespeare, Julius Caesar (i, ii, 140-141). TE: Guidelines regarding the risk allocation issues addressed in this pa- per will be included in two publications to be released in 2018: Gransberg, D, Guidelines f eotechnical Risks in Design-Build Proje , Research Report 884 (Transportation Research Board, September 2018); The Emerald Book, The International Fed- eration of Consulting Engineers (2018 publication, pending). In a series of other articles and publi- cations the author has addressed several aspects of risk allocation for subsurface conditions and design adequacy in DB and public-private partnership projects, and the risk and professional liability ex- posure for consulting engineers involved in such projects. See, for example: J. Reilly, R. Essex, D.J. Hatem, Alternative Delivery Drives Alternative Risk Alloca - o unneling (2018); Hatem, D.J. 2017 Design-Build: A Real- istic Solution for Owner Cost Overrun (October 2017); Hatem, D.J. and P. Gary, ed., 2017 Public-Private Partnerships and Design Build: Opportunities and Risks for Consulting Engineers, 2nd ed. Wash- ington: American Council of Engineering Companies, pp. 343-562; Hatem, D.J. 2014 PPP and DB: Who is Responsible for Risk: A Call f Tunneling Journal, October; Hatem, D.J. 2014 Design-Build and Public-Private Partnerships: Risk Allocation of Sub- surface Conditions. GEOSTRATA, ASCE Geo-Institute, August; Hatem, D.J. 2016 Diverse and Bifurcated Design Roles: Dis- tinguishing Design Responsibility and Design Risk Allocation. Donovan Hatem LLP Design and - ment Professional Reporter, Dec.; Hatem, D.J. 2017 Risk Allocation and Professional Liability Issues for Consulting Engineers on P3 and Design-Build Projects. In: D. Hatem and P. Gary, ed., Public-Private Partnerships and Design-Build: Opportu- nities and Risks for Consulting Engineers, 2nd ed. Washington: American Council of Engineering Companies, pp. 343-562; Hatem, D.J. and Corkum, D. 2014 Purpose and Preparation of Geotechnical Base- line Reports in Design-Build and Public- Private Partnership Subsurface Projects. In: Geo-Congress 2014, American Society of Civil Engineers. Atlanta; G. Brierley, D. Corkum and D. Hatem, eds. Design-Build Subsurface Projects, Second Edition (Soci- ety f a- tion, Inc. 2010). In many of the above sources the au- thor has addressed the impacts of inef- fective and imbalanced risk allocation between the owner and design-builder on the professional liability risk of con- sulting engineers. David J. Hatem, PC, is a partner with Donovan Hatem LLP, Boston, Massachusetts. 2 5 F E AT U R E S T O R Y

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