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INFRASTRUCTURE OUTSOURCING: - page 44 / 46

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RPPI

Figure A-2: Risk Distribution in Value-based Delivery Systems

Delivery System Design-Bid-Build

Design-Build3

Design-Build-Operate- Maintain3

Design-Build-Finance- Operate-Maintain3

Public Owner

  • Capital Finance Risks

  • Legal Liability

  • Maintenance Risk

  • Operations Risk

  • Political Risks

  • Schedule Risk (Construction)1, 2

  • Capital Finance Risks

  • Maintenance Risk

  • Operations Risk

  • Political Risks

  • Capital Finance Risks

  • Political Risks1

  • Political Risks1

Architect/Engineer

  • Design Liability

  • Constructed Quality Risk1

  • Constructed Quality Risk1

  • Design Liability1

  • Schedule Risk (Construction)1,2

  • Constructed Quality Risk1

  • Design Liability

  • Political Risks1

  • Schedule Risk (Construction)1,2

  • Capital Finance Risk1

  • Constructed Quality Risk1

  • Design Liability1

  • Political Risks1

  • Schedule Risk (Construction)1,2

Contractor

  • Constructed Quality Risk1

  • Schedule Risk (Construction)1,2

  • Constructed Quality Risk1

  • Legal Liability

  • Schedule Risk (Construction)1,2

  • Constructed Quality Risk1

  • Design Liability1

  • Legal Liability

  • Maintenance Risk

  • Operations Risk

  • Political Risks1

  • Schedule Risk (Construction)1,2

  • Capital Finance Risks1

  • Construction Quality Risk1

  • Design Liability

  • Legal Liability

  • Maintenance Risk

  • Operations Risk

  • Political Risks1

  • Schedule Risk (Construction)1,2

Design-Build-Team

Notes: Risk is shared among one or more of the participants (not necessarily equal potential liability). 1

2 Schedule risk exists when liquidated damages are involved, or when the late opening of a project delays early revenues.

3 Value-based Delivery System assumes abbreviated design offset and a corresponding increase in Quality risk and Design Liability risk.

Source: Kenneth L. McGowan, “Value Based Delivery for Public Owners,” paper presented to the National Society of Professional Engineers, July 2000, p. 6.

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