2026-08-014T_APPENDIX_A_-_Sample_Form_of_Agreement_for_Design_Build_Award.pdf

APPENDIX – A

SAMPLE FORM OF AGREEMENT

Progressive Design- Build Agreement for Water and Wastewater Projects This Progressive Design-Build Agreement has been developed in conjunction with and endorsed by the Water Collaborative Delivery Association.

Document No. 545 Second Edition, 2024

© Design-Build Institute of America Washington, D.C.

DBIA Contract Document #545

SAMPLE

Design-Build Institute of America - Contract Documents

LICENSE AGREEMENT

By using the DBIA Contract Documents, you agree to and are bound by the terms of this License Agreement.

1. License. The Design-Build Institute of America (“DBIA”) provides DBIA Contract Documents and licenses their use worldwide. You acknowledge that DBIA Construction Documents are protected by the copyright laws of the United States. You have a limited nonexclusive license to: (a) Use DBIA Contract Documents on any number of machines owned, leased, or rented by your company or organization; (b) Use DBIA Contract Documents in printed form for bona fide contract purposes; and (c) Copy DBIA Contract Documents into any machine-readable or printed form for backup or modification purposes in support of your permitted use.

2. User Responsibility. You assume sole responsibility for the selection of specific documents or portions thereof to achieve your intended results, and for the installation, use, and results obtained from the DBIA Contract Documents.

You acknowledge that you understand that the text of the DBIA Contract Documents has important legal consequences and that consultation with an attorney is recommended with respect to use or modification of the text. You will not represent that any of the contract documents you generate from DBIA Contract Documents are DBIA documents unless

(a) the document text is used without alteration or (b) all additions and changes to, and deletions from, the text are clearly shown.

3. Copies. You may not use, copy, modify, or transfer DBIA Contract Documents, or any copy, modification, or merged portion, in whole or in part, except as expressly provided for in this license. Reproduction of DBIA Contract Documents in printed or machine-readable format for resale or educational purposes is expressly prohibited. You will reproduce and include DBIA’s copyright notice on any printed or machine-readable copy, modification, or portion merged into another document or program.

4. Transfers. You may not transfer possession of any copy, modification or merged portion of DBIA Contract Documents to another party, except that a party with whom you are contracting may receive and use such transferred material solely for purposes of its contract with you. You may not sublicense, assign, or transfer this license except as expressly provided in this Agreement, and any attempt to do so is void.

5. Term. This form is provided to the Water Collaborative Delivery Association (WCDA) under license from DBIA. The license grants WCDA the right to provide this form to WCDA members at no cost. DBIA may elect to terminate the license by written notice to WCDA and/or WCDA members if either party fails to comply with any term or condition of this Agreement.

6. Limited Warranty. DBIA warrants the electronic files or other media by which DBIA Contract Documents are furnished to be free from defects in materials and workmanship under normal use during the Term. There is no other warranty of any kind, expressed or implied, including, but not limited to the implied warranties of merchantability and fitness for a particular purpose. Some states do not allow the exclusion of implied warranties, so the above exclusion may not apply to you. This warranty gives you specific legal rights and you may also have other rights which vary from state to state.

DBIA does not warrant that the DBIA Contract Documents will meet your requirements or that the operation of DBIA Contract Documents will be uninterrupted or error-free.

7. Limitations of Remedies. DBIA’s entire liability and your exclusive remedy shall be: the replacement of any document not meeting DBIA’s “Limited Warranty,” which is returned to DBIA with a copy of your receipt, or at DBIA’s election, your money will be refunded. In no event will DBIA be liable to you for any damages, including any lost profits, lost savings or other incidental or consequential damages arising out of the use or inability to use DBIA Contract Documents even if DBIA has been advised of the possibility of such damages, or for any claim by any other party. Some states do not allow the limitation or exclusion of liability for incidental or consequential damages, so the above limitation or exclusion may not apply to you.

8. Acknowledgement. You acknowledge that you have read this agreement, understand it, and agree to be bound by its terms and conditions and that it will be governed by the laws of the District of Columbia. You further agree that it is the complete and exclusive statement of your agreement with DBIA which supersedes any proposal or prior agreement, oral or written, and any other communications between the parties relating to the subject matter of this agreement.

Instruction Sheet for DBIA Document No. 545 Page 1 © 2024 Design-Build Institute of America

INSTRUCTIONS

For DBIA Document No. 545, Progressive Design-Build Agreement for Water and Wastewater Projects (2024 Edition)

Checklist Use this Checklist to ensure that the Agreement is fully completed and all exhibits are attached.

Page 1 Owner’s name, address and form of business

Page 1 Design-Builder’s name, address and form of business

Page 1 Project name and address

Section 2.1.7 Identify other exhibits to the Agreement

_______ Section 4.3.2 Complete blanks for additional sum for use of Work Product

Section 5.2.1 Complete blanks for calendar days and note the optional language that is provided

Section 5.2.2 Insert any interim milestones (optional)

Section 5.4 Complete blanks for liquidated damages and note the optional provisions that are provided

_______ Section 5.5 If the parties select the option provided they must insert an amount

_______ Section 5.6 Complete blanks for early completion bonus and note the optional provision that is provided

_______ Section 5.7.1 Complete for calendar days for Owner review

_______ Section 5.7.2 Complete blank for calendar days for Owner review and response

_______ Section 6.1.1 Complete blank for Phase 1 Services price

Section 6.1.3 Insert basis for pricing specific Work (optional)

Section 6.2 Complete blank for Lump Sum pricing (optional)

_______ Section 6.3.1 Choose markups for changes

_______ Section 6.4.1 Choose basis for Fee and complete blanks and note optional provision that is provided

Section 6.4.2.1 Insert financial arrangements for adjustments and note optional provisions

Section 6.5.1.3 Complete blanks for markup; insert or attach personnel names, etc.

_______ Section 6.5.1.4 Note optional language that is provided

_______ Section 6.5.1.23 Note the optional provision that is provided

_______ Section 6.6.1 Complete blanks for guaranteed maximum price and note the optional provision that is provided

_______ Section 6.6.2 Complete blanks for contingency amount

_______ Section 6.6.3 Complete blanks for savings and note optional provision that is provided

_______ Section 6.7.4 Note the optional provision that is provided

Section 7.2.1 Complete blanks for day of month

Section 7.3.1 Complete blanks for retention percentage and note optional provision

_______ Section 7.3.2 Note optional provision

Instruction Sheet for DBIA Document No. 545 Page 2

Checklist (Continued) Use this Checklist to ensure that the Agreement is fully completed and all exhibits are attached.

Section 7.5 Complete blanks for interest rate

Section 8.1 Choose overhead/profit method for termination for convenience

Section 8.2.1 Complete blanks for percentages

Section 8.2.2 Complete blanks for percentages

Section 9.1.1 Insert Owner’s Senior Representative’s name, etc. (optional)

Section 9.1.2 Insert Owner’s Representative’s name, etc. (optional)

Section 9.2.1 Insert Design-Builder’s Senior Representative’s name, etc. (optional)

Section 9.2.2 Insert Design-Builder’s Representative’s name, etc. (optional)

Section 10.1 Attach Insurance Exhibit

Section 10.2 Insert amount and conditions of bonds or other security and note the options that are provided

Section 11 Insert any other provisions (optional) or exhibits or documents incorporated or referenced in the Agreement

Section 12 Complete blank for rate

Last Page Owner’s and Design-Builder’s execution of the Agreement

_______ Exhibit A Detail Owner’s Project Criteria as referenced at Section 1.1.1

_______ Exhibit B Detail Phase 1 Scope of Work as referenced in Section 1.2.1

Instruction Sheet for DBIA Document No. 545 Page 3

General Instructions

No.

Subject

Instruction

1. Standard Forms

Standard form contracts have long served an important function in the United States and international construction markets. The common purpose of these forms is to provide an economical and convenient way for parties to contract for design and construction services. As standard forms gain acceptance and are used with increased frequency, parties are able to enter into contracts with greater certainty as to their rights and responsibilities.

2.

DBIA Standard Form Contract Documents

Since its formation in 1993, the Design-Build Institute of America (“DBIA”) has regularly evaluated the needs of owners, design-builders and other parties to the design-build process in preparation for developing its own contract forms. Consistent with DBIA’s mission of promulgating best design-build practices, DBIA believes that the design-build contract should reflect a balanced approach to risk that considers the legitimate interests of all parties to the design-build process. DBIA’s Standard Form Contract Documents reflect a modern risk allocation approach, allocating each risk to the party best equipped to manage and minimize that risk, with the goal of promoting best design-build practices.

3. Use of Non-DBIA Documents

To avoid inconsistencies among documents used for the same project, DBIA’s Standard Form Contract Documents should not be used in conjunction with non-DBIA documents unless the non-DBIA documents are appropriately modified on the advice of legal counsel. Moreover, care should also be taken when using different editions of the DBIA Standard Form Documents on the same project to ensure consistency.

4. Legal Consequences

DBIA Standard Form Contract Documents are legally binding contracts with important legal consequences. Contracting parties are advised and encouraged to seek legal counsel in completing or modifying these Documents.

5. Reproduction

DBIA hereby grants to purchasers a limited license to reproduce its Documents consistent with the License Agreement accompanying these Documents. At least two original versions of the Agreement should be signed by the parties. Any other reproduction of DBIA Documents is strictly prohibited.

6. Modifications

Effective contracting is accomplished when the parties give specific thought to their contracting goals and then tailor the contract to meet the unique needs of the project and the design-build team. For that reason, these Documents may require modification for various purposes including, for example, to comply with local codes and laws, or to add special terms. DBIA’s latest revisions to its Documents provide the parties an opportunity to customize their contractual relationship by selecting various optional contract clauses that may better reflect the unique needs and risks associated with the project.

Any modifications to these Documents should be initialed by the parties. At no time should a document be re-typed in its entirety. Re-creating the document violates copyright laws and destroys one of the advantages of standard forms – familiarity with the terms.

7. Execution It is good practice to execute two original copies of the Agreement. Only persons authorized to sign for the contracting parties may execute the Agreement.

Instruction Sheet for DBIA Document No. 545 Page 4

Specific Instructions

Section

Title

General Purpose of This Agreement

DBIA Document No. 545 (“Agreement”) should be used for progressive design-build water and wastewater projects. Progressive Design-Build allows an Owner to complete a Design-Build project in two phases. In Phase 1Owner completes preliminary design, sets the construction plan and establishes the Phase 2 costs to complete final design and the planned construction. This Agreement allows for Owner to pay Design-Builder for design services and construction work in Phase 2 using Cost of the Work plus a Fee, with or without a Guaranteed Maximum Price (“GMP”), or Lump Sum.

If there is uncertainty about Owner’s final design Project Criteria after Phase 1, or the final design Project Criteria remain to be developed by Owner and Design-Builder together during Phase 2, a cost-plus/GMP contracting approach is desirable.

If there is certainty as to Owner’s Project Criteria and project design after Phase 1, a lump sum fixed price for the completion of all design and construction services in Phase 2 may be suitable, especially when Owner procures Design-Builder’s services by competitive means.

General Purpose of These Instructions

These Instructions are not part of this Agreement but are provided to aid the parties in their understanding of the Agreement and in completing the Agreement.

General Related Documents This Agreement shall be used in conjunction with the General Conditions of Contract.

Other related Contract Documents are listed in Article 2 of this Agreement.

General Date

On Page 1, enter the date when both parties reach a final understanding. It is possible, due to logistical reasons, that the dates when the parties execute the Agreement may be different. Once both parties execute the Agreement, the effective date of the Agreement will be the date recorded on Page 1. This date does not, however, determine Contract Time, which is measured according to the terms of Article 5.

General Parties: Owner and Design-Builder

On Page 1 enter the legal name and full address of Owner and Design-Builder, as well as the legal form of each entity, e.g., corporation, partnership, limited partnership, limited liability company or other.

1.3 Contract Price Amendment and Proposal

When a GMP or Lump Sum is established after execution of this Agreement for Phase 2 work, the Proposal must be attached to the Contract Price Amendment pursuant to Section 1.3.2. Both the Contract Price Amendment and Proposal will include those Basis of Design Documents Design-Builder uses as the basis for its Contract Price.

This Agreement provides the parties flexibility in establishing the Phase 2 Contract Price. Parties can establish a GMP or Lump Sum for Phase 2 after entering into this Agreement, or elect to proceed on the basis of costs plus a fee, without a GMP or Lump Sum.

If a GMP or Lump Sum method is elected, the GMP or Lump Sum should not be established until the Basis of Design Documents are sufficiently defined during Phase 1 to make the GMP or Lump Sum realistic and meaningful. Setting it too early does not permit reasonable opportunity for scope definition and evaluation of Project risk.

On the other hand, setting it too late may not achieve Owner’s objective of having an early price guarantee to enable it to make decisions relative to the Project.

1.3 Proposal After Execution of This Agreement

At the completion of Phase 1 Services, Design-Builder shall submit its Proposal, which shall include the items listed in Sections 1.3.1.1 to 1.3.1.12. If the parties agree to additions or deletions from this list, modify Section 1.3 appropriately.

The Agreement provides the parties with flexibility as to when the Proposal will be submitted after execution of the Agreement. Prior to execution of the Agreement the parties should discuss when Owner desires Design-Builder to submit its Proposal.

Instruction Sheet for DBIA Document No. 545 Page 5

1.3.1.4 Schedule

Given that expedited delivery is one of the primary factors driving many owners to select the design-build method, DBIA strongly believes that the parties should discuss and understand what each party must do to support the Project schedule.

The entire Work, both design and construction, should be scheduled. The schedule should indicate the dates for the start and completion of the various stages of the Work, including the date when Owner information and approvals are required, and any Owner-created constraints. The Agreement also provides flexibility to establish the Scheduled Substantial Completion Date prior to submission of the Proposal.

1.3.2.2 Acceptance of

Proposal

If Owner accepts the Proposal, the parties should amend this Agreement to add the final Proposal as a Contract Document pursuant to Section 2.1.2.

1.3.2.3 Failure to Accept

the Proposal

This Agreement provides three options for Owner in the event it fails to accept the Proposal and two choices for Design-Builder if Owner fails to exercise any of the three options. These options are specifically designed to prevent one party from receiving a windfall in the event the parties cannot agree on the GMP or Lump Sum and the Agreement is terminated. This Agreement also states when the Agreement terminates or the Agreement is deemed completed if Owner fails to exercise one of the options.

The parties should take note that if Owner exercises its option to terminate for convenience, or Design-Builder suspends performance, Design-Builder will not be entitled to payment for uncompleted Work provided by Section 8.2. However, additional payment for Owner’s use of Work Product will be due Design-Builder pursuant to Section 4.3, if Owner proceeds to complete the Project using Design- Builder’s Work Product.

2.1.5 Construction

Documents

After execution of the Agreement, and consistent with the requirements of Section 2.4 of the General Conditions of Contract, Design-Builder will prepare Construction Documents, subject to Owner’s review and approval.

2.1 Order of

Precedence

The Contract Documents are listed in Section 2.1 in the order of their precedence.

The Contract Price Amendment and Proposal are based on the Basis of Design Documents, which are comprised of various documents. The parties should strongly consider establishing the priority of the various documents comprising the Contract Price Amendment or Proposal to avoid disputes should discrepancies arise among the documents. Moreover, Section 2.1.7 recognizes that there may be other exhibits attached to this Agreement. If this is the case, the parties should discuss whether these exhibits should be part of the Basis of Design Documents. If these exhibits are not made part of the Basis of Design Documents, these exhibits will not take priority over the Basis of Design Documents in the event of a conflict.

3.3 Definitions Terms, words and phrases used in the Agreement shall have the same meanings used in the General Conditions of Contract.

3.4 Design Specifications

Owner is cautioned that consistent with legal precedent, if it includes design specifications in its Project Criteria Design-Builder is entitled to rely on the information provided and to the extent said information is not accurate, Design-Builder is entitled to an adjustment in the Contract Price and/or Contract Time. Accordingly, Owner should consider using performance specifications to avoid such potential liability.

4.1 Work Product

This Agreement provides that Design-Builder shall retain ownership of the Work Product it produces, but obligates Design-Builder to grant a limited license to Owner to use the Work Product according to the terms and circumstances described in Sections 4.2, 4.3, 4.4 and 4.5.

Instruction Sheet for DBIA Document No. 545 Page 6

4.2 Owner’s Limited License Upon Payment in Full

Design-Builder shall grant Owner, at Owner’s sole risk, a limited license to use the Work Product at the completion of the Work in connection with Owner’s occupation of the Project. This Section also provides the parties with the option of transferring ownership of some or all of the Work Product to Owner upon payment in full for all Work performed. Generally, where Owner desires ownership of Work Product, it is sufficient to transfer ownership of unique architectural and design elements.

4.3

Owner’s Limited License Upon Owner’s Termination for Convenience or Design-Builder’s Election to Terminate

Owner should not use the Termination for Convenience Clause to obtain Design- Builder’s valuable design concepts, and then seek lower bids from other design-builders. Therefore, where Owner terminates this Agreement for its convenience, and then decides to complete the Project with its own or third party forces, Design-Builder shall grant Owner the rights set forth in Section 4.3, provided Owner pays Design- Builder all amounts due Design-Builder as required by the Contract Documents, including paying Design-Builder an additional sum per Section 4.3.2 for the use of the Work Product. In the event Design-Builder elects to terminate this Agreement for cause, for reasons set forth in Section 11.4 of the General Conditions of Contract, these same conditions apply to Owner’s use of the Work Product.

4.3.2 Additional

Compensation

To minimize disputes, the parties should negotiate prior to the execution of the Agreement the amount Owner shall pay Design-Builder for the use of Design- Builder’s Work Product in the event Owner terminates this Agreement for its convenience or Design-Builder elects to terminate this Agreement for cause. Enter this amount.

4.4

Owner’s Limited License upon Design-Builder’s Default

If Design-Builder is properly terminated for default, Owner is granted a limited license to use the Work Product, to complete the Project, and Owner shall thereafter have the same rights and obligations as set forth in Section 4.3.

4.5

Owner’s Indemnification for Use of Work Product

Owner’s use or alteration of the Work Product shall be at its sole risk, and Owner must agree to defend, indemnify and hold harmless Design-Builder and anyone working by or through Design-Builder, including Design Consultants of any tier.

5.1 Date of

Commencement

Design-Builder’s obligation to commence work is triggered by its receipt of a Notice to Proceed unless the parties mutually agree otherwise.

5.2.1 Substantial Completion of the Entire Work

Enter the calendar days of duration by which Substantial Completion has to be achieved. The parties in this Section have the option of modifying the definition of Substantial Completion set forth in the General Conditions of Contract. If this option is selected, Substantial Completion will be deemed to be achieved no later than the date a Temporary Certificate of Occupancy is issued if applicable to the Project.

5.2.2 Interim Milestones

It may be that some portions of the Work must be completed in phases or within a prescribed period of time to accommodate Owner’s needs. The parties may, at their option, identify these portions of the Work to be completed prior to Substantial Completion of the entire Work. Enter the calendar days, starting from the Date of Commencement, for achieving Substantial Completion of these identified portions of the Work. If these portions of the Work are required to be substantially completed by certain milestone dates, enter those dates. As presently drafted, no remedy is provided to Owner if an interim milestone is not met. If Owner has special requirements as it relates to interim milestones, Owner may want to consider a remedy for Design-Builder’s failure to meet an interim milestone, as well as providing a bonus to Design-Builder for satisfying such interim milestone.

Instruction Sheet for DBIA Document No. 545 Page 7

5.4 Liquidated

Damages

Owner should make a good faith evaluation of the amount that is reasonably necessary to compensate it for delay. Owner should not establish liquidated damages to penalize Design-Builder. Moreover, in the event a GMP or Lump Sum is not established upon execution of the Agreement, it appears prudent for the parties to refrain from establishing liquidated damages until such time as the GMP or Lump Sum is established.

Section 5.4 establishes a grace period between the Scheduled Substantial Completion Date and the assessment of liquidated damages in order to prevent disputes as to which party bears responsibility for only a few days of delay. The parties should enter the calendar days that may pass following the Scheduled Substantial Completion Date before liquidated damages will be assessed.

The parties are also provided the option of establishing liquidated damages if Design- Builder fails to achieve Final Completion within a specified number of days after Substantial Completion. If this option is selected, the parties must negotiate the number of days, as well as the liquidated damages amount. The parties in negotiating liquidated damages should keep in mind that the amount of liquidated damages for failing to achieve Final Completion should be a considerably scaled down amount and should reflect the financial harm to Owner. In no case should the total amount of liquidated damages for the Project exceed an amount that is reasonably necessary to compensate Owner for Project delay.

The parties also have the option here of eliminating liquidated damages altogether, in which case Owner can recover actual damages for Project delay at an amount that is capped by the parties. Owner is cautioned that it still cannot recover consequential damages under Section 10.5.1 of the General Conditions of Contract.

Owner is advised to seek the advice of legal counsel as liquidated damages for failing to timely attain Final Completion should constitute a reasonable estimate of the damages Owner will incur if Final Completion is not met within the specified number of days after Substantial Completion. It is foreseeable that such damages would be significantly less than any liquidated damages assessed for failing to timely attain Substantial Completion.

5.5 Liquidated

Damages Cap The parties can agree to cap liquidated damages at a negotiated amount.

5.6 Early Completion

Bonus

If the Project economics justify liquidated damages, then it is appropriate to couple these liquidated damages with an early completion bonus. The parties should enter the number of calendar days prior to the Scheduled Substantial Completion Date that will set the Bonus Date. Also, enter the amount of the bonus to be paid per day that will allow Owner to share with Design-Builder the economic benefits of early completion. Moreover, in the event a GMP or Lump Sum is not established upon execution of the Agreement, it appears prudent for the parties to refrain from establishing an early completion bonus until such time as the GMP or Lump Sum is established. The parties also have the option in Section 5.6 of capping the early completion bonus at a negotiated amount.

Optional provision in 5.6

Compensation for Force Majeure Events

The parties are provided the opportunity of providing Design-Builder the right to receive compensation for Force Majeure Events. By selecting this option, the parties agree to modify Section 8.2.2 of the General Conditions of Contract, in which case the parties must negotiate how many cumulative days of Force Majeure delays must occur before Design-Builder is entitled to either a negotiated amount per day for delay or the direct costs it has incurred as a result of such delay.

Instruction Sheet for DBIA Document No. 545 Page 8

6.1 GMP or Lump Sum at Agreement Execution

Enter the GMP or Lump Sum for Phase 2 Services, if appropriate. Attach as an amendment to this Agreement the Basis of Design Documents used to establish the GMP or Lump Sum. These documents comprise the Contract Price Amendment which shall become a Contract Document pursuant to Section 2.1.2 of the Agreement. Design-Builder does not guarantee any specific line item provided as part of a GMP.

By selecting the alternate option if using a GMP, Design-Builder agrees to guarantee the line item in its GMP for general conditions costs only. Design-Builder agrees that it is responsible for paying general conditions costs in excess of this line item.

Design-Builder does not guarantee any other line items in the GMP.

6.1.3 Optional Pricing

This Agreement allows the parties the flexibility to establish within the Contract Price a different payment basis for certain portions of the Work which may be necessary to permit Design-Builder to furnish Owner with a GMP or Lump Sum.

6.4.1 Design-Builder’s

Fee

Enter the amount of Design-Builder’s Fee as a sum certain or as a percentage of the Cost of the Work. Design-Builder’s Fee shall be commensurate with the services it provides and the risk it assumes in providing single point responsibility to Owner.

6.4.2 Adjustments to Design-Builder’s Fee

For additive Change Orders, the parties must negotiate the Fee Design-Builder will receive. For deductive Change Orders, the parties have the option by checking the appropriate box of whether there will be no additional reduction or whether there will be an additional reduction based on a negotiated percentage.

6.5.1.3

Wages for Design- Builder’s Employees at Principal or Branch Offices

DBIA endorses reimbursing salaries and associated benefits of Design-Builder’s Project personnel, such as accountants, stationed at offices other than the field office, when to do so is more efficient and cost effective. Enter the percentage markup to be applied for Project-related overhead associated with such personnel. Insert, or attach as an exhibit, a list of such personnel and their job functions.

6.5.1.4 Employee Benefits

It may be simpler for the parties to agree on a multiplier (rather than actual costs) to compensate Design-Builder for employee benefits. Accordingly, the parties may want to insert the multiplier to be applied to the wages and salaries of its reimbursable employees.

6.5.1.7 Costs for Defective/Non- Conforming Work

The Cost of the Work shall include the costs to repair or correct defective or non-conforming Work (including warranty or corrective work performed after Substantial Completion) unless caused by Design-Builder’s negligence. DBIA believes that Design-Builder should not be penalized for inadvertent mistakes which are inevitable when designing and constructing a Project. To do so would encourage ultra-conservatism in every task, the ultimate cost of which would be greater than a proactive approach to performing the Work, which includes ordinary mistakes or inadvertence.

6.5.1.23 Warranty Escrow

At this section, the parties are provided the opportunity to establish prior to Final Completion an escrow account in a negotiated amount to be used to reimburse Design-Builder for its costs incurred in performing warranty Work if a GMP is used. If funds remain in the escrow account after the expiration of the warranty period, the funds are returned to Owner subject to Design-Builder’s share of any savings. Note that even if the escrow account is exhausted, if funds remain under the GMP, Owner is still obligated to reimburse Design-Builder for its warranty Work.

Instruction Sheet for DBIA Document No. 545 Page 9

6.6.2 GMP Contingency

Enter the amount of Design-Builder’s Contingency if using a GMP. The Contingency is for the exclusive use of Design-Builder and covers all unanticipated costs incurred that are not the basis of a Change Order. This section sets forth by way of example only the type of costs that would be funded out of the Contingency. Other costs such as, but not limited to, any deductibles Design-Builder is obligated to pay would be subject to reimbursement. Design-Builder is also required to provide Owner with a monthly status report accounting for the Contingency, including all reasonably foreseen uses and potential uses, of the Contingency for the upcoming three months.

While not provided for in the Contingency provision, DBIA recognizes that there may be situations where Owner will want to recapture the Contingency prior to Final Completion. For example, Owner may want to use amounts in the Contingency to fund changes to the Project. Owner’s desire must be balanced against Design- Builder’s need to use the Contingency to fund unanticipated costs for which it is liable. An option to consider to accommodate both interests is to establish an “Owner’s Contingency” and a “Design-Builder’s Contingency” in the GMP. If this option is used, any savings clause in the agreement should be drafted appropriately to address these pools of funds.

6.6.3 Savings

One of the benefits of a GMP approach is the possibility that with good management by Design-Builder and timely support from Owner the actual Cost of the Work and Fee may be less than the GMP. This creates a savings pool that should result in a benefit to both Design-Builder and Owner. Sharing these savings creates an incentive for Design-Builder to save costs. Some factors to consider in determining how the Savings are shared include the timing for the establishment of the GMP and the amount of Design-Builder’s Fee established under Section 6.4.1.

6.6.3.1 Savings

Calculations

This section provides that if the actual Cost of the Work and Design-Builder’s Fee is less than the GMP, as such GMP may have been adjusted, the savings, if any, shall be shared. The Agreement offers two choices for distributing Savings. Choose a method and enter the appropriate figures.

6.7.4 Allowance Value

This section recognizes that the parties may agree that certain items of Work should be treated as an Allowance Item and priced based on Allowance values. The Allowance Value for which Design-Builder will be entitled to receive compensation includes direct cost of labor, materials, equipment, transportation, taxes and insurance associated with the Allowance Item. All other costs associated with the Allowance Item, such as design fees, general conditions costs, and Fee are deemed to be included in the Contract Price. However, by checking the box, the parties agree that in the event the actual cost of the Allowance Item is greater than or less than the Allowance Value by a negotiated percentage, then Design-Builder’s right to Fee and markup shall be determined pursuant to Section 6.4.

6.8 Performance

Incentives

In addition, for the potential of Design-Builder to share in Savings as set forth in Section 6.6.3, there may be other performance incentives that will influence Project success. Such incentives may include award fees tied to Design-Builder achieving certain standards relative to client satisfaction, safety and personnel retention. The parties are encouraged to discuss the use of such incentives during negotiation of this Agreement. Any agreement on the use of incentives should be set forth in an exhibit attached to this Agreement.

7.2.1 Progress Payments Enter the day of the month when Design-Builder shall submit its Application for Payment.

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7.3.1 Retainage

Enter the percentage Owner will retain from Progress Payments to Design-Builder until fifty percent (50%) of the Work is completed. Owner should recognize that it creates undue hardship to hold retainage on Subcontractors that have completed their work early in the Project. Owner should accordingly consider releasing retainage on Subcontractors that complete work early in the Project, providing that these Subcontractors have satisfactorily performed their portion of the Work.

The parties are provided the option of modifying the retainage provision by checking the box. This option excludes from retainage Design-Builder’s general conditions costs and amounts paid to Design-Builder’s Design Consultant. The rationale for selecting this option is that Design-Builder is obligated to pay its general conditions costs in full each month and that under the design-bid-build delivery method, Owner typically does not retain sums from its Designer.

7.3.2 Release of

Retainage

This section requires Owner to release retainage to Design-Builder. If Design-Builder and Owner have established a warranty reserve in accordance with Section 6.5.1.23, the parties shall establish an escrow account at this time.

7.5 Interest

The parties should enter the rate at which interest will accrue on Design-Builder’s payments if unpaid five (5) days after due. Late payment creates a hardship for Design-Builder, its Design Consultants, and Subcontractors.

7.6 Record Keeping

Owner is provided access to Design-Builder’s accounting information as it relates to Costs of the Work. However, if the parties have agreed to multipliers or markups, the time to challenge and negotiate those percentages is at the time the parties execute the Agreement and not during the Project or after it has been completed. Accordingly, Owner can at any time audit these percentages only to confirm that such percentage has been properly charged and not to challenge the composition of such percentage.

8.1 Termination for Convenience:

Overhead and Profit

The parties should choose prior to execution of the Agreement the method that will be used to determine overhead and profit paid to Design-Builder in the event Owner terminates Design-Builder for its convenience. The parties may choose to set percentage rates for overhead and profit prior to execution of the Agreement, or may choose to determine reasonable sums to be paid for overhead and profit at the time of the termination. If the parties choose to set overhead and profit rates prior to execution of the Agreement, the percentages should be entered in Section 8.1.

8.2 Termination for Convenience:

Additional Payments

Although it is important for Owner to have a process for terminating this Agreement for convenience, the process must consider the interests of Design-Builder. If Owner terminates this Agreement for its own convenience, compensating Design-Builder for its costs will not be adequate because Design-Builder will have committed its resources for a small amount of revenue. Therefore, in addition to the overhead and profit paid in Section 8.1, Owner shall pay Design-Builder an additional sum, calculated as a percentage of the remaining balance of the Contract Price or, if a GMP or Lump Sum has not been established, the remaining balance of the most recent estimated Contract Price. Enter the percentages Owner shall pay Design- Builder if Owner terminates this Agreement for its own convenience prior to or after the start of construction.

Instruction Sheet for DBIA Document No. 545 Page 11

Article 9 Representatives of the Parties

Enter the name, title, address and telephone number of Owner’s Senior Representative and Owner’s Representative at Sections 9.1.1 and 9.1.2, respectively.

Enter the name, title, address and telephone number of Design-Builder’s Senior Representative and Design-Builder’s Representative at Sections 9.2.1 and 9.2.2, respectively.

The parties can elect to establish these Representatives during the performance of the Project rather than at the time of execution of this Agreement. If Representatives are identified after execution of the Agreement, an appropriate amendment should be made to the Agreement at the time these individuals are designated.

10.1 Insurance

Attach an Insurance Exhibit setting forth in detail the insurance coverages required for the Project. Parties are advised to familiarize themselves with the terms of Article 5 of the General Conditions of Contract, Insurance and Bonds, and to consult their insurance advisor.

10.2 Bonds

Enter the type and amount of bonds or other performance security required for the Project. Where bonding is not required by statute, Owner may want to evaluate the project risks versus the bonding costs in deciding what type of performance security to require.

11.1 Other Provisions

Insert any other provisions. For example, the parties may elect to have disputes resolved through litigation rather than arbitration, in which case the following optional language in this Section should be included.

11.2 Listing of Exhibits

Include a listing of exhibits and documents incorporated or referenced in the Agreement. This listing includes the exhibits and documents referenced in the Agreement. Additional documents or exhibits referenced in the Agreement should be listed here.

12 Limitation of Liability This provision establishes a limit of liability of Design-Builder’s liability for the Project.

DBIA Document No. 545 Page 1 Progressive Design-Build Agreement for Water and Wastewater Projects

Progressive Design-Build Agreement for Water and Wastewater Projects

This document has important legal consequences. Consultation with an attorney is recommended with respect to its completion or modification.

This AGREEMENT is made as of the day of in the year of 20 , by and between the following parties, for services in connection with the Project identified below:

OWNER:

(Name and address)

DESIGN-BUILDER:

(Name and address)

PROJECT:

(Include Project name and location as it will appear in the Contract Documents)

In consideration of the mutual covenants and obligations contained herein, Owner and Design-Builder agree as set forth herein.

DBIA Document No. 545 Page 2

Article 1

Design-Builder’s Services and Responsibilities

1.1 General Services.

1.1.1 Owner shall provide Design-Builder with Owner’s Project Criteria describing Owner’s program requirements and objectives for the Project as set forth in Exhibit A. Owner’s Project Criteria shall include Owner’s use, space, price, time, site, performance and expandability requirements. Owner’s Project Criteria may include conceptual documents, design specifications, design performance specifications and other technical materials and requirements prepared by or for Owner.

1.1.2 If Owner’s Project Criteria have not been developed prior to the execution of this Agreement, Design-Builder will assist Owner in developing Owner’s Project Criteria, with such service deemed to be an additional service for which additional compensation shall be paid by Owner to Design-Builder. If Owner has developed Owner’s Project Criteria prior to executing this Agreement, Design-Builder shall review and prepare a written evaluation of such criteria, including recommendations to Owner for different and innovative approaches to the design and construction of the Project. The parties shall meet to discuss Design-Builder’s written evaluation of Owner’s Project Criteria and agree upon what revisions, if any, should be made to such criteria.

1.2 Phased Services.

1.2.1 Phase 1 Services. Design-Builder shall perform the services of design, pricing and other services for the Project based on Owner's Project Criteria, as may be revised in accordance with Section 1.1 hereof, as set forth in Exhibit B, Scope of Services. Design-Builder shall perform such services to the level of completion required for Design-Builder and Owner to establish the Contract Price for Phase 2, as set forth in Section 1.3 below. The Contract Price for Phase 2 shall be developed during Phase 1 on an “open-book” basis. Design-Builder’s Compensation for Phase 1 Services is set forth in Section 6.0 herein. The level of completion required for Phase 1 Services is defined in Exhibit B, Scope of Services (either as a percentage of design completion or by defined deliverables).

1.2.2 Phase 2 Services. Design-Builder’s Phase 2 services shall consist of the completion of design services for the Project, the procurement of all materials and equipment for the Project, the performance of construction services for the Project, the start-up, testing and commissioning of the Project, and the provision of warranty services, all as further described in the Contract Price Amendment. Upon receipt of Design-Builder’s proposed Contract Price for Phase 2, Owner may proceed as set forth in Article 1.3.

1.3 Proposal. Upon completion of the Phase 1 Services and any other Basis of Design Documents upon which the parties may agree, Design-Builder shall submit a proposal to Owner (the “Proposal”) for the completion of the design and construction for the Project for the Contract Price, which may be based on Lump Sum or Design-Builder’s Fee and Cost of the Work with an option for a Guaranteed Maximum Price

(GMP).

1.3.1 The Proposal shall include the following unless the parties mutually agree otherwise:

1.3.1.1 The Contract Price that may be based on a Lump Sum or Design-Builder’s Fee and Cost of the Work, with an option for a GMP, which shall be the sum of:

i Design-Builder’s Fee as defined in Section 6.4.1 hereof;

ii The estimated Cost of the Work as defined in Section 6.5 hereof, inclusive of any Design-Builder’s Contingency as defined in Section 6.6.2 hereof; and

DBIA Document No. 545 Page 3

© 2024 Design-Build Institute of America iii If applicable, any prices established under Section 6.1.3 hereof;

1.3.1.2 The Basis of Design Documents, which may include, by way of example, Owner’s Project Criteria, which are set forth in detail and are attached to the Proposal;

1.3.1.3 A list of the assumptions and clarifications made by Design-Builder in the preparation of the Proposal, which list is intended to supplement the information contained in the drawings and specifications and is specifically included as part of the Basis of Design Documents;

1.3.1.4 The Scheduled Substantial Completion Date upon which the Proposal is based, to the extent said date has not already been established under Section 5.2.1 hereof, and a schedule upon which the Scheduled Substantial Completion Date is based and a Project Schedule for the Work;

1.3.1.5 If applicable, a list of Allowance Items, Allowance Values, and a statement of their basis;

1.3.1.6 If applicable, a schedule of alternate prices;

1.3.1.7 If applicable, a schedule of unit prices;

1.3.1.8 If applicable, a statement of Additional Services which may be performed but which are not included in the Proposal, and which, if performed, shall be the basis for an increase in the Contract Price and/or Contract Time(s);

1.3.1.9 If applicable, a Savings provision;

1.3.1.10 If applicable, Performance Incentives;

1.3.1.11 The time limit for acceptance of the Proposal; and

1.3.1.12 An Owner’s permit list, a list detailing the permits and governmental approvals that Owner will bear responsibility to obtain.

1.3.2 Review and Adjustment to Proposal.

1.3.2.1 After submission of the Proposal, Design-Builder and Owner shall meet to discuss and review the Proposal. If Owner has any comments regarding the Proposal, or finds any inconsistencies or inaccuracies in the information presented, it shall promptly give written notice to Design-Builder of such comments or findings. If appropriate, Design- Builder shall, upon receipt of Owner’s notice, make appropriate adjustments to the Proposal.

1.3.2.2 Acceptance of Proposal. If Owner accepts the Proposal, as may be amended by Design-Builder, the Contract Price and its basis shall be set forth in an amendment to this Agreement, when mutually agreed between the parties (Contract Price Amendment). Once the parties have agreed upon the Contract Price and Owner has issued a Notice to Proceed with Phase 2, Design-Builder shall perform the Phase 2 Services, all as further described in the Contract Price Amendment, as it may be revised.

1.3.2.3 Failure to Accept the Proposal. If Owner rejects the Proposal, or fails to notify Design-Builder in writing on or before the date specified in the Proposal that it accepts the Proposal, the Proposal shall be deemed withdrawn and of no effect. In such event, Owner and Design-Builder shall meet and confer as to how the Project will proceed, with Owner having the following options:

DBIA Document No. 545 Page 4

© 2024 Design-Build Institute of America i Owner may suggest modifications to the Proposal, whereupon, if such modifications are accepted in writing by Design-Builder, the Proposal shall be deemed accepted and the parties shall proceed in accordance with Section

1.3.2.2 above;

ii Owner may authorize Design-Builder to continue to proceed with the Work on the basis of reimbursement as provided in Section 6.1.2 hereof without a Contract Price, in which case all references in this Agreement to the Contract Price shall not be applicable; or iii Owner may terminate this Agreement for convenience in accordance with Article 8 hereof; provided, however, in this event, Design-Builder shall not be entitled to the payment provided for in Section 8.2 hereof.

If Owner fails to exercise any of the above options, Design-Builder shall have the right to

(a) continue with the Work as if Owner had elected to proceed in accordance with Section

1.3.2.3 ii. above, and be paid by Owner accordingly, unless and until Owner notifies it in writing to stop the Work; (b) suspend performance of Work in accordance with Section

11.3.1 of the General Conditions of Contract, provided, however, that in such event Design- Builder shall not be entitled to the payment provided for in Section 8.2 hereof; or (c) may give written notice to Owner that it considers this Agreement completed. If Owner fails to exercise any of the options under Section 1.3.2.3 within ten (10) days of receipt of Design- Builder’s notice, then this Agreement shall be deemed completed. If Owner terminates the relationship with Design-Builder under Section 1.3.2.3 iii, or if this Agreement is deemed completed under this paragraph, then Design-Builder shall have no further liability or obligations to Owner under this Agreement.

Article 2

Contract Documents

2.1 The Contract Documents are comprised of the following:

2.1.1 All written modifications, amendments, minor changes and Change Orders to this Agreement issued in accordance with DBIA Document No. 535, Standard Form of General Conditions of Contract Agreement Between Owner and Design-Builder (2022 Edition) (“General Conditions of Contract”);

2.1.2 The Contract Price Amendment or the Proposal accepted by Owner in accordance with Section 1.3 above;

2.1.3 This Agreement, including all exhibits (list for example, performance standard requirements, performance incentive arrangements, markup exhibits,…