Pulse of the Industry

Each year, TBM: Tunnel Business Magazine hosts a roundtable panel to discuss the latest issues and topics in the marketplace or to present the viewpoint of a particular segment within the industry, i.e. contractors, owners, lawyers. And each year, I find the discussion to be enlightening. The level of complexity in dealing in an unknown environment in contracts that number in the millions – sometime billions – of dollars naturally warrants rigorous planning, communication and cooperation in making projects successful.

This year, we assembled a panel of professionals involved in design-build and alternative contract delivery mechanism to share their experiences – why did they choose design-build, what are the advantages, what are the potential missteps? The panelists included Chris Allen (DC Water), Marc Jensen (Southern Nevada Water Authority), Nasri Munfah (HNTB), Bryan Pennington (LA Metro) and Matt Preedy (Washington State DOT). A recap of the discussion begins on page 14.

In general, the panelists agreed that design-build and its variations are gaining momentum in the tunneling/underground sector and they expect to see that continue. They all agreed that the primary advantages are speed of delivery and getting input from the contractor regarding means and methods prior to construction. Also of note, the owners all agreed that dealing with the issue of risk upfront was key and they view that as a vital component of delivering a successful project in the end. The establishments of shared risk fund pools – the number hours of interventions, for example – reduces the contractor’s bid risk as well as provides a performance incentive for the contractor. They agreed that taking the upfront risk out of the equation has allowed them to get competitive bids.

Personally, I found it interesting to hear the owners’ different approaches to design-build. Washington State DOT, for example, separated the design-build tunnel contract for its SR 99 tunnel from the portals, which were planned as traditional design-bid-build in areas where the final product was more visible and where public interaction was greater. LA Metro, by contrast, prefers the approach of packaging elements together into a single contract where warranted.

Some issues that still need to be sorted through include compensation of contractors and dealing with intellectual property rights that arise in the selection process for the design-builder, and the changing role of an engineer in a design-bid-build vs. design-build contract. Additionally, in some areas there are still restrictions as to the types of contracts that can be used, although increasingly the ability to use non-traditional contracts is accepted.
Like all projects – no matter which contracting method is used – honest and open communication and an equitable allocation of the risk are keys to a successful project.

Tunnel Achievement Awards

The annual Tunnel Short Course at the Colorado School of Mines, planned this year for Sept. 19-21, is instituting Tunnel Achievement Awards that will be bestowed at the banquet on Sept. 20. In this issue we are proud to profile the award winners – Martin Herrenknecht (Tunnel Achievement Award for Innovations in Mechanized Tunneling) and the New York’s No. 7 Line extension project (Tunnel Achievement Award for Project Excellence).
Please join me in congratulating the winners. For more information on attending the Short Course visit: http://csmspace.com/events/tunneling/

Regards,

Jim Rush
Editor