Summary of the Integrated Design and Construction (IDaC) Delivery Method.pdf

FOR INFORMATION ONLY: The information contained in this document is for general informational purposes only and is not intended to alter, eliminate, supplement, or supplant the requirements in any solicitation or contract. In the event of a conflict between a solicitation/contract and this document, the terms of the solicitation/contract are governing. This information contained herein is subject to change at any time and may not be current.

Integrated Design and Construction (IDaC) https://www.swm.usace.army.mil/

Executive Summary & Core Framework The U.S. Army Corps of Engineers (USACE) uses the Integrated Design and Construction (IDaC) delivery method—a design-bid-build (D-B-B) variation of the Fixed-Price Incentive contract type—for complex, fully funded projects. Mirroring private-sector "Construction Manager at Risk" (CM@Risk) frameworks, IDaC brings the construction contractor in early (~15% design) to provide constructability, scheduling, and cost feedback.

The Government awards two separate, independent contracts (one for design, one for construction). This contractual split isolates professional design liability from builder feedback.

Contractual Boundaries & Design Delineation The Government establishes distinct boundaries between phases to clarify procurement and risk allocation:

• Designer of Record (DOR) Contract: Procured under qualifications-based Brooks Act (40 U.S.C. 1101) procedures (price is not an initial factor). The DO R operates under a traditional Firm-Fixed-Price (FFP) vehicle and retains 100% professional liability for final drawings, specs, and design errors.

• IDaC Construction Contract: Procured via FAR Part 15 Best Value Tradeoff, evaluating technical capability, pre-construction approach, and price. The builder provides constructability and pricing feedback with zero design liability; final design responsibility rests solely with the DOR.

Contract Structure & CLIN Schedule

The IDaC bid schedule features two primary Contract Line Items (CLINs) established at contract formation:

• CLIN 0001: Pre-Construction Services (FFP): Firm-fixed-price for design reviews, constructability feedback, scheduling, cost-estimating validation, and risk registry support.

• CLIN 0002: Construction Option (IDaC): Evaluated via successive targets:

o Initial Target Cost (ITC) + Initial Target Profit (ITPr) (proposed percentage range, typically 4% to 8%) = Initial Target Price (ITP).

o Ceiling Price (CP): The absolute maximum binding price the Government can pay.

• Evaluation Basis: The Total Evaluated Price (TEP) combines CLIN 0001 and the competitively bid Ceiling Price

(CLIN 0002), not the ITP.

FFP Conversion & Failure/Off-Ramp Procedures Fast-tracking is prohibited. Construction cannot run in incentive mode; it must convert to standard FFP at the "Production Point" (95% or 100% design backcheck) before construction starts.

1. Conversion Proposal: Within 30 days of design completion, the builder submits an FFP proposal, certifying constructability and disclosing known design errors.

2. Incentive Share Formula: The final price is negotiated using the profit adjustment formula. Underspend amounts increase builder profit, while overspend amounts decrease profit, sharing the savings or extra costs (typically via a 50/50 split) within a 3% to 12% total profit range.

3. The Off-Ramp: The negotiated FFP cannot exceed the Ceiling Price. If parties fail to agree on an FFP within 60 days, USACE executes its off-ramp, declines the option, and competitively advertises the construction scope on the open market.

4. OCI Exclusion Risk: Upon off-ramp execution, the CO reviews pre-construction involvement under FAR Subpart

9.5. If an unfair competitive advantage or Organizational Conflict of Interest (OCI) is found, the contractor and sub-tier partners face disqualification/exclusion from competing in the open solicitation.

Contractor Administrative Advantages

Converting the construction option to FFP before award bypasses heavy regulatory administrative burdens:

• No Cost Accounting Standards (CAS) (FAR Part 30) compliance during construction.

• No Earned Value Management System (EVMS) tracking required.

• No Post-Construction Audits; project administration operates as a standard FFP contract.