Legal and Contractual Issues in Lump-Sum Design-Build Implementation on Large-Scale Airport Projects

Abstract

Changes in legislation and increases in the complexity of airport projects have led owners to expand the use of alternative project delivery methods, such as the lump-sum design-build (DB) method. The objective of this study was to investigate and present lessons learned from the use of lump-sum DB on large-scale airport projects during planning, procurement, closeout, and operations. To achieve this objective, a literature review was conducted in order to examine primary procurement, contractual, and legal issues pertinent to lump-sum DB in airport projects. A case study of a lump-sum DB central utility plant project is presented, which included construction of new maintenance facilities, replacement and construction of new piping for utility distribution, and electrical and communication systems. The lessons learned from the case study include the importance of maintaining an adequate management involvement level, which can help the design-builder avoid project delays but still protects the owner from design liabilities. Another key lesson learned is the provision of adequate training to management and staff in procurement and management of lump-sum DB projects in order to avoid potential claims. The study’s main contribution is in shedding light on the use of lump-sum DB by addressing untapped legal and contractual issues associated with large-scale airport capital programs.