Page 23 - Megaprojects Playbook

LUMP SUM DESIGN BUILD

◆ Understand the contract as early as possible.

◆ There is less opportunity to control the risk and pricing if any scope or changes occur during the design process.

◆ Need to understand the sophistication level of the client, if there is an owner’s representative involved, and how
prescriptive are the contract documents and bridging documents from the RFP. The more detailed the information is
and the higher the level of contracting knowledge by the client can lead to a challenging project in this delivery method.

◆ Lump sum pricing in response to an RFP should NOT be reduced to “sell” the job as it
is very difficult to overcome this during the actual pricing of the project.

◆ If priced appropriately from the beginning, and if the design team is willing to work with alternative
approaches to construction, then there can be opportunities to return larger profits. Prescriptive design and
support documentation tend to be overlooked. Value engineering needs to be approached cautiously.

◆ Cost Tracking: Design advancement & market pricing.

◆ Design Management: Design within budget.

◆ Construction Schedule: Critical path needs to be aligned with the man hour estimate.

◆ Design Assist Subs.
◆ Escalation should be looked at separately from contingency.

◆ Contingency on Design.

◆ Strong/detailed estimate is imperative.
◆ Pricing/estimates following the lump sum number set.

◆ Subcontractor teaming agreements and letters of intent are important to mitigate potential price fluctuations.

UTC MEXICALI

20 MEGA PROJECTS PLAYBOOK | 2021
CONTAINS CONFIDENTIAL AND PROPRIETARY INFORMATION. FOR INTERNAL HASKELL USE ONLY.