DBIA Design-Build Contracting Approaches Questions and Answers 2

Question 1

In a design-build Guaranteed Maximum Price (GMP) contract, what typically happens when actual costs come in below the GMP?

Accepted Answer

The savings are split between the owner and design-builder per contract terms

Answer

The owner retains all savings

Answer

The design-builder keeps all savings as profit

Answer

The savings are returned to the funding source

Question 2

Which contract type places the most financial risk on the design-builder?

Accepted Answer

Lump sum/fixed price

Answer

Cost-plus with a fee

Answer

Time and materials

Answer

Unit price

Question 3

What is a key advantage of using a cost-plus contract with a Guaranteed Maximum Price in design-build?

Accepted Answer

It provides cost transparency while capping the owner's maximum financial exposure

Answer

It eliminates all project risk for the owner

Answer

It always results in the lowest project cost

Answer

It removes the need for owner oversight during construction

Question 4

In design-build contracting, what does 'bridging' refer to?

Accepted Answer

Owner-prepared design documents that define project requirements before selecting a design-builder

Answer

Connecting multiple construction phases together

Answer

Transitioning from the design phase to the construction phase

Answer

Linking the design-builder's insurance to the owner's policy

Question 5

What is the primary distinction between a design-build contract with a stipulated sum and one with a GMP?

Accepted Answer

In a stipulated sum the owner pays exactly that amount regardless of actual costs; in a GMP the owner pays actual costs up to the maximum

Answer

Only GMP contracts require performance bonds

Answer

Stipulated sum contracts cannot include change orders

Answer

GMP contracts do not require a defined scope of work

Question 6

When is a qualifications-based selection (QBS) most appropriate for design-build procurement?

Accepted Answer

When the project is complex, the scope is not fully defined, and the owner values team expertise over initial price

Answer

When the project has a tightly defined budget with no flexibility

Answer

When the owner wants to select the lowest bidder

Answer

When the project involves only standard construction with no design component