Organizational conflicts of interest and design-build

[joel hoffman]

I'm in the process of trying to obtain the FAR Council or committee's responses to those 77 respondents' comments for another work purpose. I'll let you know if the FAR Council knew that even though FAR 36.104 said design-build is authorized - that it is considered a conflict of interest to actually award a design-build contract to an A-E firm as prime, as a joint venture partner or as a subcontractor or as an integrated design-build contractor.

Well, guess what! I received copies of the comments and the FAR 36 Construction Committee's reports. In its November 14, 1996 report, the committee summarized comment number 8 of 77 comments as follows. I also read the original comment , which was from a person in the "Branch of Contracting" of the US Fish and Wildlife Service at the Denver Federal Center in Denver, CO.

Comment #8: "Proposed Rule would allow the firm that designs a project to construct the project. FAR 36.209 prohibits this practice and should be revised." [The original comment added: "...to allow design-build as an exception that does not need the approval of the agency head or an authorized representative."]

"Response - The comment is based on a misunderstanding. FAR 36.209 addresses the construction contract in a design-bid-build project. In design-build, a construction contract is not awarded to the firm that designed the project."

So, it appeared that someone recognized a possible conflict back then and the committee apparently said to to the effect that "You don't understand. Its clear that 36.209 is referring to the design-bid-build method, not design-build."

I haven't read every comment and response yet. But I remember my friend, the late Laura Meeker, ESQ., the Chairperson of the committee, once telling me one or more comments indicated that there needs to be more detailed guidance in the FAR on how to contract for design-build construction. Indeed, I see in the material just sent me that the Design-Build Institute of America, the American Institute of Architects and the Associated General Contractors all submitted their D-B manuals of best practices. Laura told me that the committee felt that since D-B is a construction contract, there was already adequate coverage in the FAR.

Wow, that couldn't have been further from the truth!

[Guest Vern Edwards]

While I don't doubt that there is a need for more how-to guidance about design-build, I disagree about including it in FAR. FAR is a rulebook, not a guide or handbook about how to do things. FAR should say what must and must not be done, what may and may not be done, and what should be done under certain circumstances. Besides, "guidance" is often treated as direction. Adding how-to "guidance" would clutter an already cluttered document, and the FAR is difficult to change when guidance becomes out of date. Moreover, you can't be sure that the people on the FAR councils who write the guidance will know what they are writing about.

There is plenty of guidance about how to do design-build if only contracting officers would look for it. For example, see Cushman and Taub, ed., Design-Build Contracting Handbook (Aspen Law & Business); Quatman, Design-Build for the Design Professional (Aspen Law & Business); and Beard, et al., Design-Build: Planning through Development (McGraw Hill).

[joel hoffman]

I should have been clearer. I was referring to unique roles and responsibilities that differ from those expressed in most of the A-E contract clauses and some of those expressed in straight construction contracts w/o integrated design and construction responsibilities. They must be expressed contractually.