Impact of Risk on Design-Build Selection for Highway Design and Construction Projects

Abstract

The design-build (DB) project delivery method continues to grow as a viable alternative delivery method for highway projects. The primary reason for selecting DB delivery is to take advantage of the time savings inherent in the process. However, because of low levels of design at the time of contract awards, DB contracts often carry more risks and uncertainties than other contracts, which makes the decision to select DB delivery complex. Applying risk analysis strategies and tools to the delivery selection process will help decision makers evaluate and select the DB delivery method consistently and defensibly. This paper examines 39 generic risk factors related to the DB delivery selection process. These risks were identified through previous research and risk analysis workshops on transportation projects worth more than $10 billion. To explore how these risks impact DB delivery selection, a questionnaire was developed to collect data from a national cross section of professionals with an average of 25 years of experience related to risk and project delivery methods in the transportation industry. An exploratory factor analysis was used to investigate the relationship between DB delivery selection and the 39 generic risk factors. The results indicate that seven delivery selection risk factors have the most influence on DB delivery selection: (1) scope risk; (2) third-party and complexity risk; (3) construction risk; (4) utility and right-of-way (ROW) risk; (5) level of design and contract risk; (6) management risk; and (7) regulation and railroad risk. This study compares risk preferences of public owners and design-builders for choosing DB delivery. Understanding these risk factors will help professionals not only select DB for appropriate projects but also allocate risks more properly in DB contracts.