This is an extensive agreement dealing with integrated project delivery methods on a
large scale construction project. This particular agreement is specific to “Offsite
Enabling Projects”, defined as the phase prior to actual construction in preparing the site
for construction and delivery of materials. There are three parties to this contract, the
owner, the design builder, and the program manager. The agreement includes a variety
of Exhibits that can be customized by the user to ensure the understandings of the
parties are properly set forth. This document should be used by owners, project
managers, or design builders to record and memorialize the terms of the project delivery
AGREEMENT FOR INTEGRATED PROJECT DELIVERY
AGREEMENT made as of _________ ____, 200_,
"Owner/Client": [insert Owner/Client name and address]
and the "Design Builder": [insert Design Builder name and address]
The "Project" is: Design, Pre-construction and Construction
Services for at
The "Program Manager" is: [insert Program Manager name and address]
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TABLE OF CONTENTS
1. DEFINITIONS 2
2. PROJECT FUNDAMENTALS 8
2.1. Project Parameters 8
2.2. Value Definition 8
2.3. Integrated Project Delivery 9
2.4. Reliable Promising 9
2.5. Program Manager 9
2.6. Conditional Nature of Project During CEQA Process 9
3. FUNCTION OF THE IPD TEAM 10
3.1. IPD Team Purpose and Intent 10
3.2. Members of Integrated Project Delivery Team 10
3.3. Trust 10
3.4. IPD Team Meetings 10
3.5. Standard of Care 10
4. FORMATION AND FUNCTION OF THE CORE GROUP AND SENIOR
MANAGEMENT GROUP 10
4.1. Purpose and Intent of Core Group 10
4.2. Membership and Participation 11
4.3. Regular Meetings 11
4.4. Special Meetings 11
4.5. Authority 11
4.6. Decision Making 11
4.7. Project Communication Protocols 11
4.8. Payment Protocol 11
4.9. Owner/Client's Representative and Program Manager Project Lead 11
4.10. IPD Team Personnel 11
4.11. Personnel Management 11
4.12. Purpose and Function of Senior Management Group 12
5. ADDING TRADE CONTRACTORS, SUBCONTRACTORS, SUBCONSULTANTS
AND SUPPLIERS TO THE IPD TEAM 12
5.1. Early Involvement 12
5.2. Selection 12
5.3. Replacement 12
5.4. Coordination Drawings 12
5.5. Additional Consultants 12
5.6. Continuing Responsibility 13
5.7. Joining Agreement 13
6. COLLABORATION; INTEGRATED PRECONSTRUCTION SERVICES AND WORK
6.1. Collaboration 13
6.2. Role of Cost & Schedule 13
6.3. Integrated Preconstruction Services 13
6.4. Work Authorizations; Authorized Scope of Work 13
7. PROJECT PLANNING AND SCHEDULING 13
7.1. Basic Requirements 13
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7.2. Phase Planning 13
7.3. Make-Ready Look Ahead Plan 13
7.4. Weekly Look Ahead Meetings 14
7.5. Weekly Work Planning Meetings 14
7.6. Milestone Schedule 14
8. Owner/Client PROVIDED INFORMATION AND SERVICES; MATRIX OF
8.1. Scope of Planned Work 14
8.2. Planning Documents 14
8.3. Joint Site Investigation 15
8.4. Access to Existing Documents 15
8.5. Surveys/Legal Information 15
8.6. Geotechnical 15
8.7. Coordination/Cooperation 15
8.8. Legal/Accounting Services 15
8.9. [Not used.] 15
8.10. [Not used.] 15
8.11. CEQA Mitigations 15
8.12. Division of Responsibility 15
8.13. Project Metrics; Financial Incentives Plan 15
9. EXPECTED COST, TARGET COST AND RELATED COST MODELING 16
9.1. Expected Cost; Validation of Expected Cost 16
9.2. Target Cost 16
9.3. Target Value Design 16
9.4. Escalation 17
9.5. Contingencies in Cost Models 17
9.6. Cost Model Reconciliation 17
10. DEVELOPMENT OF DESIGN DOCUMENTS 17
10.1. Scope 17
10.2. Information 18
10.3. Government Regulations; Code Reviewer 18
10.4. Pull-based Design Production 18
10.5. Approval of Deliverables 18
10.6. Role of Trade Contractors and Suppliers 18
10.7. Responsibility for Design 18
10.8. Design Drawing or Modeling Standards 18
10.9. Sustainable Design 18
11. VALUE ENGINEERING, CONSTRUCTABILITY AND WORK STRUCTURING
11.1. Value Analysis Strategy 19
11.2. Value Engineering Analysis 19
11.3. Constructability 19
11.4. Document Review 19
12. PROPOSAL OF FINAL PRICING/RISK ALLOCATION PLAN, PACKAGE PRICING
ADDENDA AND RELATED MATTERS 19
12.1. Proposal of Final Pricing/Risk Allocation Plan. 19
12.2. Allowances 20
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12.3. Other Actions to Occur Prior to Submission of Proposed Package Pricing
12.4. Package Pricing Addenda 21
12.5. Documentation of Basis of Package Pricing Addenda 21
12.6. Conditions Precedent to Commencement of the Construction Phase 21
12.7. Commencement of Construction Prior to a Package Pricing Addendum 21
13. FINANCIAL RESPONSIBILITIES 22
13.1. Intent 22
13.2. Project Risk Assessment 22
13.3. Design Error/Omissions 22
13.4. Use of Contingencies 22
14. IPD TEAM RISK SHARING 22
14.1. Risk Sharing Method 22
15. CONSTRUCTION PHASE OPERATIONS 22
15.1. "5S" Plan 22
15.2. Clean-up 23
15.3. Owner/Client's Rights 23
15.4. Glass 23
15.5. Use of Site 23
15.6. Cutting and Patching 23
15.7. Protection of Other's Work 23
15.8. Field Measurements 23
15.9. Supervision and Oversight 24
15.10. Coordinating Inspections 24
15.11. Compliance with Law 24
15.12. Legal Notices 24
15.13. Instructions 24
15.14. Construction Staking 24
15.15. Labor and Materials 24
15.16. Personnel 24
15.17. Taxes 25
15.18. Construction Progress Reports. 25
15.19. Permits and Fees 25
15.20. [Not used.] 25
16. DESIGNERS' CONSTRUCTION PHASE RESPONSIBILITIES 25
16.1. Site Visits 25
16.2. On-Site Representative 25
17. SHOP DRAWINGS, PRODUCT DATA AND SAMPLES 25
17.1. Submittals 25
17.2. Submittal Review 25
17.3. Transmittal 26
17.4. Variation of Contract Documents 26
17.5. Designers' Review 26
17.6. Re-Submittals 26
18. REQUESTS FOR INFORMATION 26
18.1. Goal 26
18.2. Process 26
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18.3. Time Limits 26
18.4. Basis 26
19. DOCUMENTS AND SAMPLES AT THE SITE 26
19.1. Site Documents 26
19.2. Final Record Set 27
19.3. Other Documents 27
20. SAFETY PRECAUTIONS AND PROGRAMS; CASUALTY 27
20.1. Responsibility 27
20.2. Safety Notices 27
20.3. Fines & Penalties 27
20.4. Adjacent Owners 27
20.5. Barriers & Warnings 28
20.6. Ultra-hazardous Activity 28
20.7. Safety Representative 28
20.8. Weather Risks 28
20.9. Restoration of Property 28
20.10. Water Precautions 28
20.11. Emergencies 28
20.12. Accidents 28
20.13. Remedying Damage to the Work. 28
20.14. Remedying Damage to Third Parties 29
21. HAZARDOUS MATERIALS 29
21.1. Hazardous Materials 29
21.2. Border Zone 29
21.3. Existing Hazardous Material 29
21.4. New Material 30
21.5. Discovery 30
22. TIME 30
22.1. Contract Time 30
22.2. Date of Commencement 30
22.3. Substantial Completion; Final Completion 30
22.4. Day 30
22.5. Time of Essence 30
22.6. Refusal to Accept Project 31
22.7. Re-Planning the Work31
22.8. Time Extensions 31
22.9. Excusable Delay 31
22.10. Compensable Delay 31
22.11. Inexcusable Delay 31
22.12. Concurrency; Partial Delays 31
22.13. No Waiver 31
22.14. Notice of Potential Claim 32
22.15. Adverse Weather 32
22.16. Daily Weather Documentation 32
22.17. Liquidated Damages and Early Completion Incentives 32
23. DIFFERING SITE CONDITIONS 32
23.1. Concealed or Unknown Conditions 32
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23.2. Exclusion 32
23.3. Claim Submission 32
24. CHANGES IN THE WORK OR ADDITIONAL SERVICES 33
24.1. General 33
24.2. Process 33
24.3. Benchmark Cost Increases During the Preconstruction Phase 33
24.4. Benchmark Cost Increases During the Construction Phase 33
24.5. Documentation 33
24.6. Effect of Change Order 33
24.7. Minor Changes 34
24.8. Change Proposal Request 34
24.9. Change Proposal Request Response 34
24.10. Resolution of Change Proposal Request 34
24.11. Pricing of Changes 34
24.12. Response to Construction Change Directive 34
24.13. Direction to Proceed 35
24.14. Price Disagreement 35
24.15. Credit Changes 35
24.16. Effect on Contract Time 35
24.17. Billings 35
24.18. Core Group Root-Cause Assessment 35
25. QUALITY OF THE WORK AND SERVICES 35
25.1. Quality Initiative 35
25.2. Built-In Quality Plan 35
25.3. Inspector of Record 36
25.5. Testing and Inspection Requests 36
25.6. Additional Testing 36
25.7. Certifications 36
25.8. Uncovering Work 36
25.9. Correction of Rejected Work 37
25.10. Right to Order Work Suspended 37
25.11. Right to Correct Nonconforming Work 37
25.12. Acceptance of Nonconforming Work 37
25.13. Suspension to Preserve Quality 37
26. RESOURCE-LOADED WORK PLAN 37
26.1. Resource-Loaded Work Plan 37
27. DESIGN BUILDER'S COMPENSATION 38
27.1. Compensation to Design Builder During the Preconstruction and Construction
27.2. Design Builder's Fee 38
28. PROGRESS PAYMENTS 38
28.1. Payments 38
28.2. Schedule of Values. 38
28.3. Prevailing Wages; Certified Payrolls 38
28.4. Materials & Equipment 38
28.5. Pencil Draw Procedure 38
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28.6. Formal Application 38
28.7. Supporting Documents 39
28.8. Certification in Payment Applications 39
28.9. Review of Formal Payment Application 39
28.10. Retainage for Subcontractors; Fee Holdback. 39
28.11. Right to Withhold 39
28.12. No Right to Stop Work 40
28.13. Warranty of Title 40
28.14. No Waiver 40
28.15. Payments Received in Trust 40
28.16. Payments to Subcontractors and Subconsultants 40
28.17. Failure of Payment 40
29. SUBSTANTIAL & FINAL COMPLETION 40
29.1. Substantial Completion Defined 40
29.2. Notice 40
29.3. Inspection 41
29.4. Release of Retainage; Final Holdback 41
29.5. Partial Occupancy or Use 41
29.6. [Not used.] 41
29.7. Final Completion 41
29.8. Project Close-Out Conditions; Project-Wide Final Completion 41
29.9. Lessons Learned 42
30. FINAL COMPLETION PAYMENT; POST-COMPLETION PAYMENT 42
30.1. Final Completion Payment 42
30.2. Amount of Final Completion Payment 42
30.3. Additional Payment(s) 42
30.4. Final Accounting for a Construction Package 42
30.5. Contest 42
30.6. Post-Completion Costs 42
30.7. Pre-Conditions to Final Completion Payment 43
30.8. Missing Release 43
30.9. Delay to Final Completion 43
30.10. Post-Completion Payment 43
30.11. Amount of Post-Completion Payment 43
31. RIGHT TO AUDIT 43
31.1. Availability of Records 43
31.2. Inspection and Copying 44
31.3. Flow Down 44
32. INSURANCE, BONDS AND INDEMNITY 44
32.1. Insurance 44
32.2. Design Builder Indemnity 44
32.3. Employee Claims 44
32.4. Indemnity Against Liens 44
32.5. Relation of Insurance and Indemnity 45
32.6. Surety Bonds 45
32.7. Information to Surety 45
32.8. Copies of Bonds 45
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33. SUBCONTRACTS 45
33.1. Subcontracts 45
33.2. Owner/Client Review of Agreement Form 45
33.3. Responsibility for Others 46
33.4. Third-Party Beneficiary 46
33.5. Contingent Assignment 46
33.6. Information to Owner/Client 46
33.7. Payment Disputes 46
34. SEPARATE CONTRACTORS 46
34.1. Owner/Client's Rights 46
34.2. Coordination 46
34.3. Cooperation 47
34.4. Quality Assurance 47
34.5. Clean-up 47
35. WARRANTY 47
35.1. Basic Warranty 47
35.2. Scope 47
35.3. Correction 47
35.4. Extension 48
35.5. Refuse 48
35.6. No Limitation 48
36. PROPRIETARY INFORMATION 48
36.1. Definition 48
36.2. No Disclosure 48
36.3. Policy/Procedure 48
36.4. Documents 48
36.5. Public Relations 48
37. OWNERSHIP AND USE OF DOCUMENTS 48
37.1. Definition; Ownership 48
37.2. Copies of Documents 48
37.3. Possession 48
37.4. Owner/Client's Use 48
37.5. Designers' Use49
37.6. Limited Use by Constructors 49
38. DEFAULT, SUSPENSION AND TERMINATION 49
38.1. Events of Default 49
38.2. Notice of Default 49
38.3. Failure to Cure Default 49
38.4. Payments Held 50
38.5. Conversion of Improper Termination 50
38.6. Suspension. 50
38.7. Termination for Convenience 50
38.8. Payment to Design Builder Following Termination for Convenience 50
38.9. Assignment 51
38.10. No Affect on Other Obligations 51
38.11. Termination by Design Builder 51
38.12. Payment to Design Builder Following Termination By It 51
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39. CORRELATION AND INTENT OF THE CONTRACT DOCUMENTS 51
39.1. Purpose 51
39.2. Organization 51
39.3. Industry Meaning 51
39.4. Hierarchy of Documents 51
39.5. Core Group's Role 51
39.6. Words and Principles of Interpretation 51
40. DISPUTE RESOLUTION 52
40.1. Scope 52
40.2. Continued Performance 52
40.3. Definitions 52
40.4. Notice 52
40.5. Time Limits on Claims 52
40.6. Special Meeting 53
40.7. Core Group Consideration 53
40.8. Senior Executive Meeting 53
40.9. Independent Expert 53
40.10. Non-Binding Mediation 53
40.11. Confidentiality 53
40.12. Unresolved Impasse 54
40.13. Application of Procedures 54
41. REPRESENTATIONS AND WARRANTIES OF Owner/Client 54
41.1. General 54
42. REPRESENTATIONS AND WARRANTIES OF DESIGN BUILDER 54
42.1. General 54
42.2. Licensure and Qualifications 54
43. MISCELLANEOUS PROVISIONS 54
43.1. Notices 54
43.2. Governing Law; Forum Selection/Venue 55
43.3. Integrated Agreement; Modification 55
43.4. No Joint Venture 55
43.5. Assignment. 55
43.6. Waiver 55
43.8. Attorneys' Fees 55
43.9. Severability 55
43.10. Equal Opportunity 55
43.11. Royalties & Patents 56
44. EXECUTION 57
EXHIBIT 1 Project Site
EXHIBIT 2 Scope of Planned Work
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EXHIBIT 3 List of Planning Documents
EXHIBIT 4 Expected Cost
EXHIBIT 5 Cost of the Work
EXHIBIT 6 Owner/Client's Schedule Requirements
EXHIBIT 7 Time Rates with Staffing Plan
EXHIBIT 8 [Not Used]
EXHIBIT 9 Building Codes and Regulations
EXHIBIT 10 Insurance Requirements
EXHIBIT 11 [Not Used]
EXHIBIT 12 [Not Used]
EXHIBIT 13 Matrix of Roles and Responsibilities
EXHIBIT 14 Key Documentation Provided by Owner/Client
EXHIBIT 15 Project Roster
EXHIBIT 16 State Required Terms and Conditions
EXHIBIT 17 Form of Joining Agreement
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This AGREEMENT FOR INTEGRATED PROJECT DELIVERY (the "Agreement") is made as of _____________
__, 200__ between Owner/Client and Design Builder, who state and agree as follows.
Owner/Client seeks to [insert summary of Owner/Client project description]. Owner/Client requires the
services of a design-builder to provide design, preconstruction, and construction services in support of the Project.
Owner/Client has engaged Program Manager to provide program management consulting services to
Owner/Client on the Project and Program Manager will be responsible for providing oversight and owner's
representative services during the Project.
Owner/Client (either through itself or through Program Manager) has engaged certain consultants who have
done site investigations and preliminary site planning, which Program Manager has used to develop the scope of the
Project and which information is being provided to Design Builder. Owner/Client has also engaged a separate
contractor ("Hazmat Contractor") to perform certain demolition and hazardous materials abatement work at the Site.
Owner/Client has concluded that traditional design and construction delivery models are unlikely to meet its
goals for speed, cost, quality and innovation. Thus, Owner/Client is engaging Design Builder to deliver the Project
using an integrated project delivery (IPD) team and innovative waste-minimization techniques in an effort to avoid the
typical outcomes of traditional delivery models, in which design takes too long, wasteful back-and-forth occurs
between designer and constructor, and disputes commonly impede peak performance.
The essential nature of this Project is to complete certain offsite and enabling sub-projects in order to prepare a
Site for construction and thereby enable the IPD Team to proceed to construction in an expedited manner. The
information learned and developed by Design Builder during the design phase of this Project will be important for the
IPD Team in their ongoing design efforts and in the follow-on design and construction of the Project. Towards this
end, Design Builder shall work collaboratively and closely with the Hazmat Contractor in the design and construction
of the Project so that the completed Project is designed and constructed in a coherent and efficient way as a unified
The parties acknowledge that the draft environmental impact report ("EIR") for the Site is currently in process
pursuant to the California Environmental Quality Act (CEQA). This draft EIR analyzes this Site as a potential site for
the Project. The parties further acknowledge that this Site may not be selected to be developed for the Project. No
construction or physical site preparation work may be authorized or performed under this Agreement unless and until
the Site is selected and approved to move forward after completion of the EIR process and certification of the final
EIR. This Project, if approved, will comply with all applicable CEQA mitigation measures. Design Builder
acknowledges the possibility that the Project may not be approved and that this Agreement may therefore terminate
prior to the Construction Phase.The Project will proceed with a pre-construction phase in which the planning
documents will be examined, a preliminary design developed and approved by Owner/Client, with the approved
design refined during detailed design and implementation documents phases into a set of design documents ready
for permitting and construction. To the extent directed by Owner/Client, Design Builder shall use building information
model technology in its design process, so that, among other things, the data developed for the Project will be
incorporated into the building information model that the Deisgn Builder will prepare for the Project. During pre-
construction, the Design Builder will validate Owner/Client's expected maximum cost, develop a target value design
plan, and in accordance with the plan the parties will establish a Target Cost to drive innovation in cost reduction and
adding Project value. This Target Cost will also be a benchmark for certain financial incentives in relation to Design
Builder's performance. The Design Builder's team of designers, constructors and suppliers will cooperate and
collaborate in a continuous process of refining and evaluating the evolving design and construction planning of the
Project in order to achieve the best value for the Project. Both design and construction will involve close collaboration
among the Design Builder's team and Owner/Client, and will utilize innovative "pull" planning methods to facilitate a
process that minimizes waste and contention.
Towards the end of pre-construction, Design Builder will propose to Owner/Client a plan for the pricing of the
delivery of the various planned components of the Project and the allocation of certain project risks. When
agreement as to the final pricing for a particular package of construction work is reached pursuant to the
Owner/Client-approved Final Pricing/Risk Allocation Plan, and provided that the Project is approved after certification
of the final EIR, the parties will sign a Package Pricing Addendum for such package. Design Builder will be entitled to
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additional financial rewards beyond its base fee for above-average performance during the Project on the basis of
agreed upon performance criteria.
The following words and phrases have the following meanings in this Agreement and the Contract Documents.
Other defined terms and phrases may be set forth elsewhere in the Contract Documents.
"Actual Cost" means the sum of the total Cost of the Work actually incurred by Design Builder in connection with
the performance of all Phases of the Project, plus the Design Builder's Fee.
"Agreement" means this Agreement for Integrated Project Delivery by and between Owner/Client and Design
"BIM" means the building information model (or series of linked models) created to facilitate the construction of
the Project. The BIM should be a data-rich electronic model of the designated parts of the Work in which various
aspects of the model are embedded with information about their physical and functional characteristics and their
relationship to other aspects of the model, and to the extent determined by the Core Group, should be linked to the
scheduling and cost data generated by the Design Builder to allow for analysis of time and cost impacts in the
"Building Regulations" has the meaning set forth in Section 10.6.
"CEQA" means the California Environmental Quality Act.
"Change Order" has the meaning set forth in Section 24.5.
"Change Proposal Request" has the meaning set forth in Section 24.8.
"CIP" has the meaning set forth in Section 32.1.
"Claim" has the meaning set forth in Section 40.3.
"Code Reviewer" means one or more independent design professionals engaged by Owner/Client to review the
Implementation Documents to ensure that they are compliant with Building Regulations.
"Compensable Delay" has the meaning set forth in Section 22.10.
"Construction Administration" means the services performed by Designers in assisting the Design Builder and
Subcontractors in implementing the final Drawings and Specifications and in the performance of the Work, and by
timely providing to Design Builder and its Subcontractors any and all information necessary to achieve the foregoing.
"Construction Change Directive" has the meaning set forth in Section 24.5.
"Construction Package" means a specific grouping of construction Work released pursuant to a particular
Package Pricing Addendum and/or Work Authorization.
"Construction Phase" means that portion of the Work and the Services to be performed under this Agreement
beginning upon commencement of the Construction Phase pursuant to Section 12.6 and through Project-Wide Final
"Contract Documents" means all of the following:
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(a) this Agreement, together with all exhibits hereto (and documents incorporated by
reference in the exhibits);
(b) executed Work Authorizations and Package Pricing Addenda;
(c) the final approved Implementation Documents;
(d) the Milestone Schedule;
(e) any Modification validly executed; and
(f) the final approved Payment Protocol.
"Contract Time" has the meaning set forth in Section 22.1.
"Core Group" has the meaning set forth in Section 4.1.
"Cost of the Work" means all recoverable direct and indirect costs incurred in connection with the performance
of the Project by Design Builder, but not Design Builder's Fee compensated on a cost reimbursement basis, as and to
the extent more particularly set forth in Exhibit 5.
"Owner/Client" means the Party identified as such on the cover page of this Agreement.
"Owner/Client's Consultants" means those consultants retained by Owner/Client (not including Design Builder)
to assist Owner/Client in carrying out the Project, including those identified as such in the Project Roster.
"Owner/Client Indemnitees" has the meaning set forth in Section 32.2.
"Component" means a specific sub-project.
"Date of Commencement" has the meaning set forth in Section 22.2.
"Deliverables" means the documents, data or other work product to be prepared by a Designer for the Project in
accordance with the Contract Documents.
"Designer" means a design professional on the Design Build Team.
"Design Builder" means the Party identified as such on the cover page of this Agreement.
"Design Builder's Fee" means the fee paid to Design Builder during the Preconstruction and Construction
Phases, as set forth in Section 27.2.
"Design Builder's Representative" means the individual identified as such on the Project Roster.
"Differing Site Conditions" has the meaning set forth in Section 23.1.
"Dispute Resolution Proceeding" means a proceeding between or among two or more parties pursuant to any
of the mechanisms set forth in Article 40 to resolve Claims.
"Document Production Protocol" is the protocol to be developed by Design Builder during the Preconstruction
Phase for defining and producing the design deliverables for the Project in an integrated and efficient manner, using
BIM to the extent directed by Owner/Client.
"Drawings" means the graphic and pictorial portions of the Contract Documents, whether printed or electronic,
within the BIM or otherwise, showing the design, location and dimensions of the Work, generally including plans,
elevations, sections, details, schedules and diagrams.
"Escalation Contingency" has the meaning set forth in Section 9.4.
"Event of Default" has the meaning set forth in Section 38.1.
"Excusable Delay" has the meaning set forth in Section 22.9.
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"Expected Cost" has the meaning set forth in Section 2.1.
"Facility" means the buildings and improvements to be constructed at a Site by the Design Builder.
"Fee Holdback" has the meaning set forth in Section 28.10.2.
"Final Completion" has the meaning set forth in Section 29.7.
"Final Completion List" has the meaning set forth in Section 29.2.
"Final Holdback" means 15% of the Core Group's reasonably estimated cost to complete the Work on the Final
Completion List for a Construction Package.
"Final Completion Payment" has the meaning set forth in Section 30.2.
"Final Pricing/Risk Allocation Plan" has the meaning set forth in Section 12.1.
"Final Verified Cost Report" means Design Builder's report of the final Cost of the Work of a Construction
Package, verified by Design Builder's accounting staff as accurate, to be submitted with Design Builder's Payment
Application for Final Completion Payment. The report shall not be required for any Construction Packages where the
Threshold Amount is on a lump sum basis.
"Fraud or Willful Misconduct" with respect to Owner/Client or Design Builder means the fraud or willful
misconduct of any of such party's Senior Officers and Employees.
"General Conditions" has the meaning set forth in Section 9.2.3.
"Hazardous Materials" has the meaning set forth in Section 21.1.
"Implementation Documents" means the documents, consisting of the BIM and any Drawings and
Specifications prepared outside the BIM, to be prepared or assembled by the Designers to define the Work to be
constructed as part of the Project, and prepared with construction details completely shown and with dimensions
completely stated so that contractors and subcontractors are able to make accurate assessments of the quantities,
quality, and character of the labor and materials required to perform the Work and so that the Code Reviewer is able
to ascertain that the Work complies with Building Regulations.
"Independent Expert" has the meaning set forth in Section 40.9.
"Inexcusable Delay" has the meaning set forth in Section 22.11.
"Integrated Project Delivery" has the meaning set forth in Section 2.3.
"Integrated Project Delivery Team" or "IPD Team" has the meaning set forth in Section 2.3 and Article 3.
"IOR" has the meaning set forth in Section 25.3.
"IPD Team Contingency" is a contingency amount that is available to address design errors and omissions and
to pay for items that arise during the Construction Phase that are properly considered a Cost of the Work, but which
were not included in calculation of the applicable Threshold Amount and are not the result of items specified in
Article 24 as entitling Design Builder to a Change Order.
"Joining Agreement" means an agreement to be signed by each member of the IPD Team (other than Design
Builder) in which the member agrees to be bound by the terms and conditions of this Agreement which are applicable
to such IPD Team member.
"Joint Site Investigation" has the meaning set forth in Section 8.3.
"LEED" means the USGBC's Leadership in Energy and Environmental Design rating program.
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"Legal Requirement" means each and every law, code (including building codes and standards), rule,
regulation, requirement, order, judgment, decree, or ordinance of every kind issued by any government entity
applicable to or affecting the Project, a Site, the Contract Documents, and/or the Work (including any of the foregoing
which concern health, safety, environmental protection, and nondiscrimination).
"Lien" means any lien, security interest or encumbrance of any kind against the Project, a Site, the Work, any
monies due or to become due from Owner/Client to Design Builder or from Design Builder to any Subcontractor,
Trade Contractor, Subconsultant or Supplier for or on account of the Work.
"Milestone Schedule" has the meaning set forth in Section 7.6.
"Modification" means (1) a written amendment to this Agreement signed by both Parties, (2) a Package Pricing
Addendum signed by both Parties, (3) a Change Order signed by both Parties, (4) a Construction Change Directive
or (5) a Supplemental Instruction.
"Nonconforming Work" has the meaning set forth in Section 35.1.
"Notice of Potential Claim" has the meaning set forth in Section 22.14.
"OEP" or "Offsite and Enabling Projects” consist of the following activities to be performed by Design Builder
as directed by Owner/Client pursuant to Work Authorizations:
(1) Relocation of existing utilities currently located within the Site to locations outside of the
Site that are required to remain operational during and after the construction of the
(2) All mass excavation to bring the Site to the approximate final grades and to create a
‘super pad’ ready for development. The super pad is defined to include the entire Project
area, any areas outside of the Project where support buildings are located and reasonable
working room to accommodate construction activities.
(3) All dry and wet utilities outside of the super pad area including storm drain, water, sewer,
gas, electrical and data from their points of connection to the edge of the super pad,
where the IPD Team will continue with the design and construction of utilities within the
(4) All projects outside of the super pad that are required to prepare the Site for construction
and/or occupancy including roadway improvements, relocations, and infrastructure
upgrades for existing facilities.
Subject to Section 21.4, Hazardous Materials abatement is not part of the scope of the OEP
for Design Builder.
"Package Pricing Addendum" has the meaning set forth in Section 12.4.
"Party" means Design Builder or Owner/Client, and "Parties" means both Design Builder and Owner/Client.
"Payment Application" means an application for payment submitted by Design Builder to Owner/Client pursuant
to Articles 28-30.
"Payment Protocol" has the meaning set forth in Section 4.8.
"Pencil Draw" has the meaning set forth in Section 28.5.
"Phases" means, collectively, the Preconstruction Phase and the Construction Phase.
"Post-Completion Payment" has the meaning set forth in Section 30.11.
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"Preconstruction Phase" means that portion of the Work and the Services to be performed under this
Agreement beginning upon issuance of the first Work Authorization for the Preconstruction Phase and ending at the
commencement of the Construction Phase of any applicable Construction Package pursuant to Section 12.6.
"Product Data" means, collectively, illustrations, standard schedules, performance charts, instructions,
brochures, diagrams and other information furnished by Design Builder, Trade Contractors, Subconsultants,
Subcontractors, or Suppliers to illustrate materials or equipment for some portion of the Work.
"Program Manager" is defined on the cover page. However, if Owner/Client replaces Program Manager,
references herein to "Program Manager" shall be deemed to mean the replacement program manager designated by
"Program Manager Project Lead" is the person designated by Program Manager to have overall project-level
responsibility for management of the design and construction of the Project.
"Project" means all the planning, design and construction of the OEP, and the performance of all requirements
set forth in this Agreement during all Phases.
"Project Close-Out Conditions" has the meaning set forth in Section 29.8.
"Project Communications Protocols" has the meaning set forth in Sections 4.7, 8.7, 18.2 & 19.1 and
elsewhere within this Agreement.
"Project Documents" has the meaning set forth in Section 37.1.
"Project Evaluation Criteria" means, collectively, the benchmarks, metrics, or standards of evaluation used
throughout the Project as a basis for evaluating the IPD Team and continuously improving Project performance. See
"Project Roster" means the list of representatives of Core Group members, IPD Team members, and
Owner/Client's Consultants which is maintained and updated from time to time by the Core Group. The initial Project
Roster is attached hereto as Exhibit 15.
"Project-Wide Final Completion" means the date when all the Construction Packages have achieved Final
Completion and Design Builder has satisfied the Project Close-Out Conditions.
"Proprietary Information" has the meaning set forth in Section 36.1.
"Records" has the meaning set forth in Section 31.1.
"Responsible Designer" shall mean the person or entity that has responsibility for preparing the Drawings
and/or Specifications for a particular portion of the Work.
"RFI" means a request for information regarding an uncertainty with respect to any portion of the Work submitted
in writing by an IPD Team member to Owner/Client or a Designer.
"Risk Mitigation Plan" has the meaning set forth in Section 13.2.
"Risk Sharing Method" has the meaning set forth in Section 14.1.
"RLWP" has the meaning set forth in Section 26.1.
"Samples" means physical examples which illustrate materials, equipment or workmanship and establish
standards by which the Work will be judged.
"Senior Executive Meeting" has the meaning set forth in Section 40.8.
"Senior Management Group" means the group which provides oversight and executive support to the Core
Group and the IPD Team. Each Core Group member firm will have a company representative approved by
Owner/Client on the Senior Management Group.
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"Senior Officers and Employees" means, with respect to Owner/Client and any IPD Team member, (i) persons
who have been appointed to a corporate office of such firm: (ii) persons designated as Core Group representatives;
(iii) persons designated as Senior Management Group members; and (iv) the most senior person employed by such
firm who is directly responsible for day-to-day supervision of the firm's activities on the Project.
"Services" means those services to be performed by the Subconsultants pursuant to this Agreement and as
described in the RLWP.
"Set-Based Design" means carrying multiple design options forward and deferring the selection of an option
until the last responsible moment as further described in Section 11.2.
"Shop Drawings" means, collectively, drawings, diagrams, schedules and other data specially prepared for the
Work by Design Builder, Subcontractors, Suppliers or distributors to illustrate some portion of the Work. The
Drawings and Specifications are not Shop Drawings.
"Site" means the property described in Exhibit 1 hereto.
"Site Documents" has the meaning set forth in Section 19.3.
"Special Meeting" has the meaning set forth in Section 40.6.
"Specifications" means that portion of the Contract Documents consisting of the written requirements for
materials, equipment, systems, standards, execution and workmanship for the Work, and performance of related
"Subconsultants" means those design and construction professionals identified on the Project Roster as
Subconsultants and retained to perform a portion of the Services under an agreement with Design Builder or another
"Subcontractor(s)" means the individuals or firms retained by Design Builder, or by a subcontractor or Supplier
of Design Builder, to install or furnish and install work, labor or materials or provide other services for which a
contractor's license is required under applicable Legal Requirements or otherwise provide on-site construction labor
in connection with the Work. The term Subcontractor shall include Trade Contractors and Suppliers to the extent that
they furnish on-site construction labor or installation services. To the extent the term Subcontractor is referred to as if
singular in number it shall include the plural and shall mean a Subcontractor or an authorized representative of the
"Submittals" means, collectively, Shop Drawings, Product Data, Samples and similar documents to be
submitted for review by the applicable Designer pursuant to the Contract Documents.
"Substantial Completion" has the meaning set forth in Section 29.1.
"Substantial Completion Date" has the meaning set forth in Section 22.3.
"Supplemental Instruction" or "SI" has the meaning set forth in Section 24.7.
"Suppliers" means material and equipment suppliers engaged by Design Builder or Subcontractors of any tier.
"Target Cost" means has the meaning set forth in Section 9.2.
"Target Value Design Plan" has the meaning set forth in Section 9.3.
"Termination for Convenience" has the meaning set forth in Section 38.7.
"Threshold Amount" means the estimated maximum cost, guaranteed maximum cost, not-to-exceed amount,
or stipulated sum, as applicable, for a particular Construction Package and which is set forth in a Package Pricing
Addendum for that particular Construction Package.
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"Trade Contractor" means the individuals or firms retained by Design Builder or one of its trade contractors of
any tier to provide collaboration and services during the Preconstruction Phase. It is anticipated that a Trade
Contractor will continue to serve as Subcontractor during the Construction Phase provided that the Core Group
determines that its performance during pre-construction merits continued participation and accepts its price proposal.
"USGBC" means the U.S. Green Building Council.
"Value Engineering Proposal" or "VEP" has the meaning set forth in Section 11.2.
"Warranty Reserve" means a dollar sum certain, approved by the Core Group, that shall be carried in the Target
Cost and each Threshold Amount and which reflects the amount the Design Builder is allocating for warranty work
during the 1-year warranty period.
"Work" means the construction and services required from Design Builder by the Contract Documents, whether
completed or partially completed, and includes all other labor, materials, equipment and services provided or to be
provided by Design Builder to fulfill Design Builder's obligations. The Work may constitute the whole or a part of the
"Work Authorization" means a document executed by the Parties to authorize and agree to a limited scope of
Services and/or Work during the Preconstruction Phase and/or the Construction Phase.
2. PROJECT FUNDAMENTALS
2.1. Project Parameters. The Project involves the planning, designing, pre-construction and construction
services for the Work in accordance with the parameters described below. Without limitation, Owner/Client's
parameters for the Project include (a) the scope of planned Work set forth in Exhibit 2; (b) the planning documents
set forth in Exhibit 3; (c) the maximum design and construction cost for the planned Project Components as set forth
in Exhibit 4 (the "Expected Cost"); (d) Owner/Client's schedule requirements set forth in Exhibit 6; and (e) the
applicable building standards and requirements listed in Exhibit 9. Once Design Builder has validated the Expected
Cost, the Core Group shall develop, review and approve a Target Cost early in the Preconstruction Phase, as
described under Section 9.2. During the Preconstruction Phase, the IPD Team will, using the principles of Target
Value Design, design the Project as more specifically described in Articles 10 and 11, so that it can be constructed for
not more than the Target Cost. Toward the end of the Preconstruction Phase, the Core Group shall develop, review
and approve the Final Pricing/Risk Allocation Plan for the various planned Components of the Project, as described in
Section 12.1. If the Project is approved under the CEQA process and the final EIR is certified, then when agreement
as to the final pricing for a particular Construction Package is reached pursuant to the Final Pricing/Risk Allocation
Plan, the parties will sign a Package Pricing Addendum for such Construction Package. In addition to the planned
Project Components set forth in the Final Pricing/Risk Allocation Plan, Owner/Client may need additional Work done
on or near a Site as additional site information becomes available and the design process unfolds; in such case,
subject to Section 2.6, Owner/Client may issue a Work Authorization for such additional work to be performed upon
agreed business terms outside the framework of the Final Pricing/Risk Allocation Plan. The Target Cost shall serve
as a baseline for determining certain incentive compensation to the Design Builder, as further described in
Section 27.2, which shall be determined after completion of the Construction Phase and Owner/Client's determination
of the Actual Cost. The Final Pricing/Risk Allocation Plan shall also allocate the risk for cost and schedule overruns
among Owner/Client and IPD Team members and set forth any limitations of liability of IPD Team members.
2.2. Value Definition. Owner/Client defines value for purposes of the Project as completing the Project in
accordance with Owner/Client's established parameters, for no more than the Expected Cost, within the time frame
established by Owner/Client's schedule requirements, in a manner which promotes the following:
2.2.1. Expedited Completion – The purpose of the Project is .
The Project accordingly needs to be completed as expediently as possible.
2.2.2. [Not used.]
2.2.3. [Not used.]
2.2.4. Efficiency – Efficient design and construction promotes the values of expedited completion and
2.2.5. Sustainability – Certain elements of the Project need to be designed to achieve a minimum of
LEED silver certification, and the entire Project needs to be designed to be environmentally sustainable. Although
Design Builder is not responsible for LEED certification of the Project, Design Builder will need to coordinate and
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collaborate with the applicable IPD Team so that the Project can obtain the targeted LEED credits which are
impacted by this Project.
2.2.6. Creativity –To implement the IPD process on this Project and meet the Owner/Client's other
values of expedited completion, the IPD Team will need to demonstrate creativity and innovation.
2.2.7. Team Attitudes and Behaviors – This Project’s success will be highly dependent on the
attitudes and behaviors of the individuals and firms involved. Therefore, Owner/Client desires to foster an
environment that will reward positive thinking, advanced problem-solving skills, a “can do” attitude and highly
collaborative behaviors. Owner/Client believes that these attitudes and behaviors will be vital to the success of the
Project and the IPD Team. Problem and issue identification is part of any creative process. Individuals and firms will
need to move through problems to carefully considered solutions deliberately and collaboratively. Team members
should push beyond the barrier of “This is not how we did it before” and explore new ideas and approaches.
Individuals and firms will need to think and relate differently than in traditional construction projects in order for
Owner/Client to achieve its goals for speed, innovation and low cost.
Only Owner/Client may change the definition of value for the Project.
2.3. Integrated Project Delivery. Owner/Client has determined that its value proposition can be achieved
best by utilizing "Integrated Project Delivery," which means promoting project efforts to pursue the following
objectives: increasing the relatedness of Owner/Client and members of the Design Builder's design and construction
teams (the "Integrated Project Delivery Team" or "IPD Team"); collaborating throughout design and construction
with all members of the IPD Team; planning and managing the Project as a network of commitments; optimizing the
Project as a whole, rather than any particular piece; and tightly coupling learning with action (promoting continuous
improvement throughout the life of the Project). Specific actions in support of these objectives are set forth
elsewhere in this Agreement and in the Contract Documents.
2.4. Reliable Promising. The Parties acknowledge that fundamental to the success of Integrated Project
Delivery is the willingness and ability of Owner/Client and all IPD Team members to make and secure reliable
promises as the basis for planning and executing the Project. In order for such a promise to be reliable, the following
elements should be present:
2.4.1. The conditions of satisfaction are clear to both parties – the performer and the promisee;
2.4.2. The performer/promissor is competent to perform the task or has access to the competence to
perform the task and the wherewithal (e.g., materials, tools, equipment, instructions) to do so;
2.4.3. The performer/promissor has made its best estimate of the time to perform the task and has
internally allocated adequate resources and has blocked the time on its internal schedule.
2.4.4. The performer/promissor is sincere in the moment that the promise is made – only making the
promise if it believes that the promise reasonably can be fulfilled.
2.4.5. The performer/promissor is prepared to accept responsibility if the promise cannot be performed
as promised and will promptly advise the IPD Team if confidence is lost that the task can be performed as promised.
2.5. Program Manager. Owner/Client has engaged Program Manager to serve as program manager and to
act on its behalf with respect to the Project. Design Builder shall perform its services pursuant to this Agreement
under the direction and management of Program Manager and for the benefit of Owner/Client. Design Builder agrees
that it shall render and furnish to Program Manager the services and deliverables to which Owner/Client is entitled
under this Agreement, at the times when Owner/Client is entitled to the same.
2.6. Conditional Nature of Project During CEQA Process. The Parties acknowledge that the draft EIR for
the Site is currently in process. This draft EIR analyzes this Site as a potential site for the Project. The Parties
further acknowledge this Site may not be selected to be developed for the Project.
The initial work to be authorized under this Agreement is for site preparation design and engineering work only, as
more particularly set forth in the initial Work Authorization(s), and as necessary to prepare the Site for the follow-on
construction of the Project. This work is a continuation of the planning work for the Project and does not constitute a
commitment to proceed with any construction work on the Site (whether under this Agreement or any other
agreement) in any manner whatsoever.
The Parties understand and agree that, prior to certification of the final EIR for the Site, all work which Owner/Client
may authorize to be done is design and engineering work only and that such work may, and likely will, be required to
be adjusted, or modified, to comply with mitigation measures approved for the Site as well as for other non-CEQA
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Further, the Parties understand and agree that no construction or physical site preparation work is authorized under
this Agreement, and that there will be no construction or site preparation work, unless and until the Site is selected
and the Project approved to move forward after completion of the EIR process and certification of the final EIR.
This Project, if approved, will comply with all applicable CEQA mitigation measures.
At the time (if any) that the Project is approved, the design and engineering work for the Site will be modified to fully
comply with all applicable CEQA mitigation measures and any other modifications desired by Owner/Client. At no
time will the commencement of site preparation design and engineering be a reason for failure to incorporate
mitigation measures into the Project or for failure to comply with mitigation measures. No site work will be
commenced unless and until the EIR is certified, the Site is selected, the Project approved, and Owner/Client has
issued a Work Authorization for such work.
Notwithstanding anything to the contrary in this Agreement, the Receiver has not limited in any way its discretion, or
the discretion of a responsible or trustee agency, department, board or commission with jurisdiction over the Project
from exercising its discretion with respect to the Project, including but not limited to the discretion to (i) make such
modifications deemed necessary and feasible to mitigate significant environmental impacts, (ii) select other feasible
alternatives to avoid or substantially lessen such impacts, (iii) balance the benefits of the Project against its significant
unavoidable impacts prior to taking final action if such significant impacts cannot otherwise be substantially lessened
or avoided, or (iv) determine not to proceed with the proposed Project.
3. FUNCTION OF THE IPD TEAM
3.1. IPD Team Purpose and Intent. The purpose of the IPD Team is to facilitate collaborative planning,
design, and construction of the Project. By forming an IPD Team, the Parties intend to gain the benefit of an open
and creative learning environment, where IPD Team members are encouraged to share ideas freely in an
atmosphere of mutual respect and tolerance. IPD Team members shall work together and individually to achieve
transparent and cooperative exchange of information in all matters relating to the Project, and to share ideas for
improving Project delivery as contemplated in the Project Evaluation Criteria. IPD Team members shall actively
promote harmony, collaboration and cooperation among all entities performing on the Project.
3.2. Members of Integrated Project Delivery Team. The members of the IPD Team are set forth in the
Project Roster attached as Exhibit 15.
3.3. Trust. The Parties accept the relationship of mutual trust and confidence established with each other by
this Agreement, and promise to furnish their professional skill and judgment and to collaborate and cooperate with
each other and with other project participants in actively pursuing an integrated project and furthering the interests of
the Project. The IPD Team members and Owner/Client, and Owner/Client's Consultants and separate contractors,
will be expected to reasonably share information and cooperatively collaborate for the benefit of the Project. The
Parties recognize that each of their opportunities to succeed on the Project is directly tied to the performance of other
Project participants. The Parties shall therefore work together in the spirit of cooperation, collaboration, and mutual
respect for the benefit of the Project, and within the limits of their professional expertise and abilities. Throughout the
Project, Design Builder shall use diligent efforts to perform the Work in an expeditious and economical manner
consistent with the interests of Project. Nothing in this paragraph shall create a fiduciary relationship among the
3.4. IPD Team Meetings. The Core Group shall assure scheduling of regular meetings for the IPD Team.
IPD Team members shall collaborate regarding all Project aspects, including site use and improvements, the
selection of materials and equipment.
3.5. Standard of Care. Design Builder and the IPD Team acknowledge that Owner/Client, not being skilled
in such matters, is relying upon each professional in the IPD Team for the technical and professional adequacy of its
services. Neither Owner/Client nor Owner/Client's Consultants shall perform any duties of any member of Design
Builder's IPD Team, or assume any responsibility or liability for the professional or technical adequacy of the
Drawings and Specifications prepared by Design Builder's IPD Team. Each IPD Team member shall perform its
designated services in a competent professional manner in accordance with the applicable standards of professionals
of such member's field in metropolitan areas of California experienced in providing services for facilities of this size,
type, and complexity.
4. FORMATION AND FUNCTION OF THE CORE GROUP AND SENIOR MANAGEMENT GROUP
4.1. Purpose and Intent of Core Group. The "Core Group" is the group of leaders responsible for
coordination and overall day-to-day management and administration of the Project consistent with Integrated Project
Delivery principles. The Core Group shall exercise its authority in the best interest of the Project and within the
bounds of the rights and obligations of the Parties under this Agreement.
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4.2. Membership and Participation. The initial members of Core Group are indicated on the Project Roster
and includes the Program Manager Project Lead and Design Builder's Representative. This initial Core Group may
invite others to become members of the Core Group and may also remove such added members from the Core
Group. Each IPD Team member shall assure that its Core Group representative, if any, attends all Core Group
meetings and fulfills his or her responsibilities as a Core Group Member. The Core Group may approve any
member's designation of an alternate representative; any proposed replacement of a Core Group representative shall
be subject to the Core Group's approval. The meetings of the Core Group shall be facilitated by the Program
Manager Project Lead. The Core Group shall keep the Project Roster current and revise it from time to time in
accordance with changes in Core Group representatives, Senior Management Group members, Subconsultants,
Trade Contractors, Subcontractors and Suppliers pursuant to the terms of this Agreement.
4.3. Regular Meetings. The Core Group shall establish a regular meeting schedule, which in general should
be no less frequently than monthly and shall be more frequent during Preconstruction Phase. The Core Group shall
be responsible for reviewing and stimulating the progress of the Project in pursuit of exceeding the Project Evaluation
Criteria. The Core Group shall also review the periodic project evaluations and shall plan and implement ways to
improve Project performance and performer satisfaction on the Project. The Core Group meetings shall be held
separately from other meetings for the purpose of ensuring their importance and the candor of the exchange at the
Core Group meeting. On at least a quarterly basis, the Core Group meeting should include the Senior Management
4.4. Special Meetings. In addition to the regularly scheduled meetings, a Core Group meeting may also be
set at the request of any Core Group Member to allow the Core Group to address a matter of urgency (a "Special
Meeting"). A Special Meeting shall be convened as quickly as all Core Group members can be assembled. Notice
of a Special Meeting shall identify the issues to be addressed. If a Core Group member is not able to attend either a
regular or Special Meeting because of a scheduling conflict, an alternate may be designated in advance to attend.
Notice may be provided by e-mail.
4.5. Authority. The Core Group shall have the authority expressly granted it by this Agreement.
4.6. Decision Making. The Core Group shall endeavor to make decisions by consensus. In the event of
impasse not resolved through the efforts of either the Core Group or the Senior Management Group, Owner/Client
may issue directions that it believes to be in the best interest of the Project, subject to further resolution pursuant to
the dispute resolution provisions of Article 40.
4.7. Project Communication Protocols. At the outset of the Preconstruction Phase, the Core Group shall
establish communication protocols for the Project. The communication protocols shall address whether and to what
extent team members may communicate with the subcontractors and subconsultants of other team members, the use
of e-mail, establishment of web-based project management systems, production and publication of meeting minutes,
and other issues relating to project communication.
4.8. Payment Protocol. At the outset of the Preconstruction Phase, the Core Group shall develop a set of
procedures and protocols (the "Payment Protocol") to be followed by the Parties and first-tier Trade Contractors,
Subcontractors and Subconsultants for the invoicing, processing and payment of Design Builder's Payment
Applications in order to optimize the goals identified by the Core Group. Among other goals identified by the Parties,
it is intended that the Payment Protocol shall ensure that Design Builder is promptly paid during the Preconstruction
and Construction Phases to enable them to promptly satisfy the Project-related payment requests of first-tier Trade
Contractors, Subcontractors and Subconsultants (and others). The Payment Protocol shall provide for payment no
less frequently than monthly and should be established in order to maximize the benefit to Owner/Client of making
prompt payments for amounts incurred, without generating significant waste in the process.
4.9. Owner/Client's Representative and Program Manager Project Lead. Owner/Client shall designate in
writing a representative authorized to act on its behalf with respect to the Project. The Program Manager Project
Lead shall be responsible for coordinating action among the Project participants, including any additional
Owner/Client and/or Program Manager personnel who must participate in decision making on the Project.
4.10. IPD Team Personnel. The individuals serving various roles on the IPD Team are listed on the "Matrix of
Roles and Responsibilities" attached as Exhibit 13, which also describes the responsibilities of such individuals. No
member of the IPD Team shall remove or replace any of the individuals on such matrix without the Core Group's prior
written consent. Any replacement for such individual presented to the Core Group for approval shall have
substantially equivalent or better qualifications than the individual whom he or she replaces. Design Builder's
Representative shall be the IPD Team's primary contact with Owner/Client and Program Manager and is authorized
to bind Design Builder for all matters pertaining to the Project and/or this Agreement, including participation in the
4.11. Personnel Management. The Core Group shall not supervise or control any person employed by an
IPD Team member or any subcontractor, consultant or supplier of such member in connection with the Project;
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provided, however, that the Core Group may require any IPD Team member to remove (or cause to be removed) any
person employed in connection with the Project if it determines that the presence of such person is detrimental to the
performance of the Services or Work or if an employee engages in conduct that Owner/Client or the Core Group
reasonably deems to be improper.
4.12. Purpose and Function of Senior Management Group. Senior Management Group members will not
have full-time, day-to-day responsibility for the Services or the Work, but will have direct oversight and periodic
involvement with the IPD Team’s performance. It is anticipated that a Senior Management Group representative will
serve in that role until Project completion. Owner/Client expects that the Senior Management Group representatives
will, at a minimum, have full authority at a regional, business-unit, or state-wide level within their respective
organizations. Owner/Client desires the breadth of experience, access to resources, leadership, mentoring and
coaching that will be provided by the Senior Management Group in order to promote creativity, innovation, and
extraordinary performance by the Core Group and the IPD Team. The Senior Management Group should perform
periodic project assessments to assure that the IPD Team is continuously improving, adjusting to the dynamic
environment, and responding to the challenges as the Project's future unfolds in unexpected ways. If the Core Group
is unable to resolve an issue, the Senior Management Group shall assist in an attempt to achieve a consensus
resolution, as per Section 4.6.
5. ADDING TRADE CONTRACTORS, SUBCONTRACTORS, SUBCONSULTANTS AND SUPPLIERS TO THE
5.1. Early Involvement. It is anticipated that Design Builder has contracted or will contract with necessary
Trade Contractors, Subconsultants and Suppliers, as approved by the Core Group, to provide services during
Preconstruction Phase as described in this Agreement and applicable Work Authorizations so as to facilitate an
integrated, collaborative design process. Each such Trade Contractor and Supplier should also be engaged to serve
during the Construction Phase provided that the Core Group determines that its performance during Preconstruction
Phase merits continued participation and accepts its price proposal and Owner/Client issues a Work Authorization for
the Construction Phase.
5.2. Selection. As of the date of this Agreement, the IPD Team already includes some of the necessary
Trade Contractors, Suppliers and Subconsultants. Before proposing any additional Trade Contractor, Subcontractor,
Subconsultant or Supplier, Design Builder shall satisfy the Core Group that the proposed firm has the financial
resources, qualifications, and experience to complete the Work for which it is proposed and is available to do so. The
Core Group will promptly review the qualifications and decide whether to add the proposed firm to the list of potential
Trade Contractors, Subcontractors, Subconsultants or Suppliers from which to seek proposals. The "pre-
qualification" of proposed firms shall not waive the right of the Core Group later to object to or reject any proposed
Trade Contractor, Subcontractor, Subconsultant or Supplier. Subject to Sections 12.1 and 12.4, the Core Group shall
determine the appropriate method (e.g., sealed bid, best value, etc.) of selecting particular Trade Contractors,
Subcontractors, Subconsultants or Suppliers to perform any Work or Services. If Design Builder intends to perform a
particular scope of Work using its own forces, Design Builder shall provide the Core Group with its qualifications to
perform such Work. If requested by the Core Group, Design Builder shall obtain alternative proposals for Work that
Design Builder proposes to self-perform, and the Core Group may direct Design Builder to submit its proposal for
self-performed work on a sealed bid basis alongside sealed bids from the alternative proposers.
5.3. Replacement. Subject to modification at the Core Group's direction, Design Builder may propose Trade
Contractors, Subcontractors, Subconsultants and Suppliers to replace any Trade Contractor, Subcontractor,
Subconsultant or Supplier on the IPD Team, which will be approved by the Core Group provided the request is in the
best interest of the Project. Any such replacement occurring after the issuance of the applicable Package Pricing
Addendum shall not result in any change to the applicable Threshold Amount(s). The Core Group may direct Design
Builder to replace any Trade Contractor, Subcontractor, Subconsultant or Supplier to whom the Core Group has
reasonable objection. Provided such firm was not in default, a mutually agreed upon adjustment in Design Builder's
compensation may be negotiated. The Core Group shall have the right to approve any such replacement, which will
be reasonably given provided the request is in the best interest of the Project.
5.4. Coordination Drawings. In addition to other Preconstruction Phase services outlined elsewhere in the
Contract Documents, Trade Contractors are expected to prepare and participate in developing "coordination
drawings" during the Preconstruction Phase to identify routing and eliminate conflicts among the work of the various
trades. To the extent required by Owner/Client, the "coordination drawings" or similar input, together with necessary
information related to same, shall be reflected and included in the BIM.
5.5. Additional Consultants. Either Design Builder or Owner/Client may propose consultants to serve the
Project as either Subconsultants or Owner/Client's Consultants, and the need for same shall be determined by the
Core Group. Consultant selection, unless otherwise determined by the Core Group, shall proceed on a request for
proposal basis. Final selection shall be made by the Core Group. Before proposing any consultant, Design Builder
or Owner/Client shall satisfy itself that the consultant has the qualifications and experience to perform the services for
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which it has been proposed, and a willingness to perform as a member of an integrated project delivery team as
contemplated by this Agreement. The Core Group will promptly review the qualifications and decide whether to add
the proposed consultant to the pre-qualification list. The "pre-qualification" of proposed consultants shall not waive
the right of the Core Group later to object to or reject any proposed consultant. Upon request of the Core Group, a
consultant's proposal shall include a fee proposal, supported by a work plan. Neither Design Builder nor
Owner/Client shall be required to retain any consultant to whom it reasonably objects.
5.6. Continuing Responsibility. The Core Group's acceptance of any consultant's credentials shall not in any
way relieve Design Builder of its duty, responsibility and liability to Owner/Client for services provided by Designers.
Design Builder shall be responsible and liable for the services provided by members of the IPD Team and shall
coordinate those services.
5.7. Joining Agreement. In order to become part of the IPD Team, each Designer, Subconsultant, Trade
Contractor, Subcontractor, or Supplier is required to execute a Joining Agreement in the form set forth in Exhibit 17
or otherwise approved by Owner/Client.
6. COLLABORATION; INTEGRATED PRECONSTRUCTION SERVICES AND WORK AUTHORIZATIONS
6.1. Collaboration. In order to achieve Owner/Client's values, design of the Project must proceed with
informed, accurate information concerning program, quality, cost and schedule. While each IPD Team member will
bring different expertise to each of these issues, all of these issues and the full weight of the entire IPD Team's
expertise will need to be integrated throughout the Preconstruction Phase if the value proposition is to be attained.
None of the IPD Team members can proceed in isolation from the others; there must be deep collaboration and
continuous flow of information.
6.2. Role of Cost & Schedule. Cost and schedule are design criteria, and the IPD Team shall not allow
those issues to be reviewed only at particular milestones—there must be continuous analysis of cost and schedule in
the design process. The Core Group shall ensure that design proceeds fully informed by the cost and schedule
implications of the design by implementing the Target Value Design Plan (see Section 9.3).
6.3. Integrated Preconstruction Services. During Preconstruction Phase, Design Builder, Trade Contractors,
and Suppliers shall provide on-going review of the unfolding design with recommendations on construction feasibility;
actions designed to minimize adverse effects of labor or material shortages; time requirements for procurement,
installation and construction completion; and factors related to construction cost including estimates of alternative
designs or materials, preliminary budgets and possible economies. See Article 11 for more detail.
6.4. Work Authorizations; Authorized Scope of Work. No Work or Services shall be performed in the
Preconstruction or Construction Phase except pursuant to a Work Authorization signed by Owner/Client. Each Work
Authorization shall set forth the following: (a) the specific scope of Work and Services authorized, (b) the deliverables
required in connection with such scope of Work and Services, (c) the date of commencement and the expiration date
of the Work Authorization, if any, and (d) any other matters Owner/Client deems important.
7. PROJECT PLANNING AND SCHEDULING
7.1. Basic Requirements. The planning and scheduling to be performed on the project shall be "pull
scheduling" using the Last Planner System™ or an equivalent system. In order to be pull-based, the planning system
must be based upon requests from IPD Team members, as "customers", to other Project participants, as
"performers", upon whom the requester's work is dependent, together with promises made by the "performer" about
when it will finish the work to agreed-upon hand-off criteria in order to enable the "customer" to begin its performance.
At a minimum the system must include the Milestone Schedule, Phase Schedules, "make-ready" look ahead plans,
weekly work plans, and a method for measuring, recording, and improving planning reliability.
7.2. Phase Planning. A "Phase Schedule" must be based on collaborative planning by all IPD Team
members involved in that phase, who, working backwards from the particular milestone in the Milestone Schedule,
collaboratively create a schedule indicating when Work or Services should be done (together with conditions of
satisfaction) in order to meet that milestone. In developing a Phase Schedule, IPD Team members who understand
how the work will be performed should be in direct conversation with the other IPD Team members from whom they
will receive work or to whom they will deliver work, whether this work is physical work, services or information. The
purpose of this conversation is to put the performers in action by making direct requests and promises to each other,
and specifically discussing and negotiating the hand-off criteria or conditions of satisfaction that are then mutually
understood and agreed upon in a Phase Schedule. This conversation continues in greater detail during the weekly
work planning meetings discussed below.
7.3. Make-Ready Look Ahead Plan. The IPD Team's scheduling process must also include use of a "make-
ready" look ahead plan (a "Look Ahead Plan"), having a minimum duration of 6 weeks or as approved by the Core
Group, that identifies for each task or item of work appearing within the planning window whether any constraints
(i.e., issues that if they continue to exist would prevent the performer from making a reliable promise that the work
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can be performed as indicated on the plan) exist, and if so which person has personally promised that the constraint
will be removed and by when.
7.4. Weekly Look Ahead Meetings. The Core Group will determine when weekly look ahead meetings will
commence. During such meetings, the applicable IPD Team members review the Look Ahead Plan's activities for the
coming week to assess any remaining constraints that would keep someone from making a reliable promise on the
coming week's work plan. For any remaining constraints, promises for removal must be solicited, and available work
for the coming week confirmed. Then, the subsequent week in the Look Ahead Plan is reviewed to assess whether
work in that week can be made available for the coming week's work as workable backlog (see below). In this
process, the IPD Team evaluates what unconstrained work could be performed early if either: (1) a performer finishes
the planned work early or (2) if there is some reason that would prevent the performer from doing the planned work
as promised. Any work that could be performed early is identified as "workable backlog" if such work has been
authorized by the IPD Team; work performed early that was not released as workable backlog is considered out of
sequence as it would cause difficulty or rework for one or more IPD Team members.
Also during the look ahead meeting, the IPD Team should review the remaining weeks of the Look Ahead
Plan to monitor completion of the promises for removing constraints and to identify any new constraints. The IPD
Team leader for that meeting should obtain clear promises including completion dates for removing constraints and
declarations of completion on previous promises. The Look Ahead Plan (including especially the status of
constraints) should be updated promptly after such meeting.
Finally, the new week (i.e., the next-in-time week which has not previously been
included in the Look Ahead Plan) is introduced and the tasks for that week are added to the plan
and reviewed. The IPD Team then begins to identify constraints applicable to those tasks, which
process continues at subsequent look ahead meetings.
7.5. Weekly Work Planning Meetings. The Core Group will determine when weekly work planning meetings
will be initiated for the Project. These meetings are collaborative work planning sessions that identify among IPD
Team members, based upon the work identified in the current look ahead plan as constraint-free, what specific work
for each day and each week will be completed and what the agreed-upon hand-off criteria (so that the follow-on task
can be commenced) for that work will be. The applicable IPD Team members shall reflect the outcome of the
meeting in a work plan for that week. IPD Team members should communicate daily as to what work has been
completed, any variation from what was promised, and any revision for the remainder of the week's work plan.
Finally, the IPD Team must implement a method for tracking planning reliability and assessing root cause of
variations for purposes of continuously improving planning reliability.
7.6. Milestone Schedule. At the beginning of the Preconstruction Phase, the IPD Team shall prepare a
preliminary schedule (the "Milestone Schedule") showing the pre-construction and construction activities of the IPD
Team at only a milestone level. The Milestone Schedule shall comply with Owner/Client's schedule requirements set
forth in Exhibit 6 and shall include all major tasks and activities critical to the production and completion of the
Project in a timely manner and within the contract requirements. The Milestone Schedule does not replace the pull-
scheduling to be done collaboratively by the Project participants as described above.
Throughout the Project, Design Builder, in collaboration with all IPD Team members, shall update the
Milestone Schedule monthly, focusing on major milestones relied upon for tracking purposes. Design Builder shall
coordinate and integrate the Milestone Schedule with the services and activities of Owner/Client, Program Manager
and the IPD Team members. As the Project proceeds, the Milestone Schedule shall be updated to indicate proposed
activity sequences and durations, milestone dates for receipt and approval of pertinent information, submittal of the
Final Pricing/Risk Allocation Plan proposal, release of Construction Packages, procurement and delivery of materials
or equipment requiring long-lead time procurement, resource-loading for construction activities, Owner/Client's
occupancy requirements showing portions of the Project having occupancy priority, and proposed dates of
Substantial and Final Completion for each Construction Package. Updates to the Milestone Schedule shall not affect
the Contract Time unless and to the extent that Design Builder has received an extension of time pursuant to Article
8. OWNER/CLIENT PROVIDED INFORMATION AND SERVICES; MATRIX OF RESPONSIBILITIES
8.1. Scope of Planned Work. Exhibit 2 contains the scope of planned Work.
8.2. Planning Documents. Exhibit 3 lists the planning documents prepared by Program Manager and
Owner/Client's Consultants to provide guidance and resources for Design Builder's design efforts. The documents
listed in Exhibit 3 are part of the Contract Documents.
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8.3. Joint Site Investigation. Owner/Client has provided Design Builder with a variety of Site information
(including preliminary geotechnical reports), as listed in Exhibit 14. Based on such information and any
subsequently available information and from input from the whole IPD Team, the Core Group shall promptly develop
a plan for those pre-construction investigations at or concerning the Site, if any, which are required in order to have
the necessary information to design the planned Project Components (collectively, the "Joint Site Investigation").
Design Builder shall arrange for the Joint Site Investigation as a Cost of the Work. After the Joint Site Investigation,
the Core Group will review the information received from such investigation and, as the design progresses and new
information is learned, assess to what extent additional investigations should be pursued and shall identify in writing
any apparent deficiencies or discrepancies in the information provided by Owner/Client. During each of the
Preconstruction Phase and the Construction Phase, Owner/Client shall make the Site available to the IPD Team at all
reasonable times, subject to satisfaction of Owner/Client procedures for access to the Site.
8.4. Access to Existing Documents. To the extent that documents exist and are in Owner/Client's
possession, Owner/Client shall provide interested IPD Team members access to any of its documents related to the
Site with reasonable promptness, and without cost or expense. IPD Team members shall review the information
furnished with reasonable care and advise the Core Group in writing of any errors, inconsistencies, inaccuracies, or
incompleteness which would prompt an IPD Team member to include additional contingency in its estimates or
require a Designer or Trade Contractor to make a worst case assumption that might prove wasteful if additional
investigation were performed. To the extent an IPD Team member has performed as described above, it shall be
entitled to rely upon the accuracy of the information provided by Owner/Client to the extent that it is not contradicted
by the Contract Documents.
8.5. Surveys/Legal Information. To the extent called for by the scope of the Project, Owner/Client shall
furnish (to the extent not already provided) a legal description and all existing and available land surveys of the Site,
giving, as applicable, grades and lines of streets, alleys, pavement, and adjoining property; rights-of-way, restrictions,
easements, encroachments, zoning, deed restrictions, boundaries, and contours of the Site; locations, dimensions
and complete data pertaining to existing buildings, other improvements, and trees; and full information concerning
available service and utility lines both public and private.
8.6. Geotechnical. Owner/Client has furnished a preliminary geotechnical report to the IPD Team. Design
Builder shall independently investigate and confirm the subsurface and soil conditions as necessary to efficiently
complete the Project.
8.7. Coordination/Cooperation. Design Builder shall be responsible for coordinating the information
provided by Owner/Client, Owner/Client's Consultants, and members of the IPD Team and overseeing the
preparation of coordinated Implementation Documents pursuant to this Agreement. Pursuant to this coordination
obligation, Design Builder shall meet, confer, cooperate and collaborate, as necessary or appropriate, with the other
IPD Team members, including Owner/Client's Consultants. The Project Communication Protocols shall address how
information developed in those meetings is recorded and distributed. Design Builder certifies that all current
members of the IPD Team have reviewed this Agreement and understand the level of cooperation, collaboration, and
pre-construction services that Owner/Client expects from all IPD Team members.
8.8. Legal/Accounting Services. Owner/Client shall determine the necessity of and furnish all legal,
accounting, and insurance counseling services necessary for Owner/Client's obligations hereunder, including such
auditing services as Owner/Client may require to verify Payment Applications or to ascertain how or for what
purposes Design Builder uses the monies paid by or on behalf of Owner/Client.
8.9. [Not used.]
8.10. [Not used.]
8.11. CEQA Mitigations. Owner/Client has delivered to Design Builder the currently proposed CEQA
mitigation measures applicable to the Project, as listed in Exhibit 14. Owner/Client will provide Design Builder with
timely updates (if any) to the CEQA mitigation measures and shall notify Design Builder of the final approved set of
CEQA mitigation measures. The IPD Team shall take into account and provide for all applicable CEQA mitigation
measures in the design and construction of the Project.
8.12. Division of Responsibility. Attached as Exhibit 13 is a matrix setting forth the relative roles and
responsibilities of Owner/Client's Consultants, Design Builder and other IPD Team members. The Parties and IPD
Team members shall be entitled to rely upon any person identified in that matrix, as may be modified in writing with
Core Group approval during the Project, as having apparent authority to act on behalf of the identified firm with
respect to any subject matter identified as such person's responsibility in the matrix.
8.13. Project Metrics; Financial Incentives Plan. At the commencement of Preconstruction Phase, the Core
Group, as a basis for performing Target Value Design, shall develop for Owner/Client's approval a defined list of
specific values, goals, outcomes, objectives and other such metrics which will serve as the basis for establishing the
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specific parameters for the Project. Utilizing these project metrics, the Core Group shall then develop a financial
incentives program ("Financial Incentives Plan") for Owner/Client's approval that it believes will encourage superior
performance and reward the IPD Team for successfully exceeding the project metrics during the course of the
Project. The Financial Incentives Plan should conform to any parameters provided by Owner/Client and provide a
basis for continually monitoring and reviewing the IPD Team's performance so that the team receives periodic
performance information to allow corrections or modifications to improve the quality of the services provided. The
Financial Incentives Plan may consider performance in the following areas: cost, quality, safety, schedule, planning
system reliability, and innovative design or construction processes.
9. EXPECTED COST, TARGET COST AND RELATED COST MODELING
9.1. Expected Cost; Validation of Expected Cost. Owner/Client has established the Expected Cost based
on preliminary estimates by Program Manager. At the beginning of Preconstruction Phase, the IPD Team shall
examine the Expected Cost and validate whether the planned Project Components can be completed for the
Expected Cost, using a validation report format approved by the Core Group, which shall include without limitation a
detailed cost model complying with Section 9.2.1. After receiving and reviewing the validation report, Owner/Client
shall provide written notice that Owner/Client either (a) approves the validation report or (b) intends to make changes
to either or both the Scope of Planned Work set forth in Exhibit 2 and/or the Expected Cost so as to bring the
planned Project Components within the Expected Cost, in which case the validation process shall repeat until
Owner/Client approves a validation report. Design Builder agrees that, once Owner/Client approves the validation
report and absent causes for which Owner/Client is expressly assuming the risk, the IPD Team is able to design and
construct the Project for no more than the Expected Cost, and that the IPD Team shall design the Project so that it
may be constructed without exceeding the Expected Cost.
9.2. Target Cost. The Core Group, in conjunction with the Senior Management Group, shall establish a
milestone date for development of the Target Cost for the Project. The IPD Team shall develop and the Core Group
shall approve the Target Cost, as well as the other elements of value to be pursued in designing the Project, all as
more specifically described in the Target Value Design Plan (see Section 9.3). The "Target Cost" may not exceed
the Expected Cost and shall be a "stretch" goal that will drive innovation to reduce costs and/or add value to the
Project. Among other things, the Target Cost shall be based upon the documents attached as (or described in)
Exhibits 2, 3, 4, 6, 7, 9, 10, and 14.
9.2.1. The Target Cost and the IPD Team's cost models shall include the following:
(a) Total cost to Owner/Client of all elements of the Cost of the Work for the Project, including
the total costs of professional services, labor, materials and supervision to be furnished by any member of the IPD
Team (or anyone engaged by any of them) during the Preconstruction and Construction Phases;
(b) Design Builder's Fee and the fees of all other IPD Team members;
(c) Escalation Contingency (see Section 9.4);
(d) IPD Team Contingency;
(e) Warranty Reserve;
(f) General Conditions (see Section 9.2.3); and
(g) Allowances (see Section 12.2).
9.2.2. The Target Cost shall not include the cost of labor, materials or equipment relative to
Owner/Client-supplied equipment for the Project (except the cost of installation by Design Builder of any
Owner/Client-supplied equipment as provided in the Implementation Documents), or the costs of land, rights of way,
financing or other such Owner/Client-responsible items. The Target Cost is a key design criteria and shall guide the
IPD Team's development of the design for the Project and the Drawings and Specifications.
9.2.3. "General Conditions" includes all general and administrative expenses for a particular
Construction Package, including foreseeable delays and interferences, which the IPD Team may experience on that
Construction Package, for the duration of the construction schedule. Design Builder will be entitled to use the IPD
Team Contingency to augment the General Conditions unless the Core Group determines otherwise.
9.3. Target Value Design. The Trade Contractors and Suppliers on the IPD Team will provide Target Value
Design support services throughout development of the design by providing on-going cost information and estimating
of portions of the proposed construction work, systems being considered, details as they are developed, and other
cost exercises that the Core Group deems advisable or which are set forth in the Target Value Design Plan.
Depending on the stage of document development, the scope and nature of this on-going effort may change. The
IPD Team shall consolidate its on-going cost modeling efforts and create periodic cost reports to be delivered to
Owner/Client on a schedule developed by the Core Group. Along with each report, the IPD Team shall provide a
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narrative description identifying and explaining any variances from previous reports. These reports are "roll-up
estimates" of the Cost of the Work which integrate and refine information from the on-going pricing exercises. The
purpose of providing these reports is to enable Owner/Client the opportunity to confirm that the Project is proceeding
within the approved budget parameters. However, those estimates shall be the by-product of the continuous cost
estimating process and should not be performed in the traditional method of progressing the design to a certain stage
of development and then requesting that the IPD Team contractors and trade contractors provide pricing information.
9.3.1. Target Value Design Plan. The Parties acknowledge that Target Value Design is intended to
make explicit that value, cost, schedule, and constructability (including work structuring) are basic components of the
design criteria. The intent is to design the Project to a detailed cost model. The Core Group shall develop written
guidelines (the "Target Value Design Plan") for use of Target Value Design principles throughout the design
process. At a minimum, the Target Value Design Plan should address the following:
(a) Method to establish initial target costs for Components and major sub-components.
(b) Method for determining other value elements of Target Value Design.
(c) Schedule for selection of Subcontractors during design.
(d) Method for forming and meeting structure for cross-functional teams (clusters) of
designers and builders for major Components and sub-components of a Site and improvements.
(e) Method for aligning all IPD Team members behind the cardinal rule of Target Value
Design: the Project's Target Cost shall never be exceeded without express approval of Owner/Client.
(f) Method to assure continuous cost analysis and reporting procedures within the cross-
functional teams (clusters) for monitoring estimated costs against target costs.
(g) Creation of a Target Value team comprised of the cross-functional/cluster leaders to meet
regularly and frequently, with responsibility for evaluating Target Value Design tradeoffs and opportunities, (including
function / cost trade-offs) and authority to direct value engineering and adjustments of the component / system costs
up or down to maintain total project Target Cost.
(h) The frequency of preparing the milestone roll-up estimates described in Section 9.3.
9.3.2. Target Value Design Process. The IPD Team shall follow the guidelines and protocols in the
Target Value Design Plan throughout the design process, revise them as necessary for continuous improvement
(subject to Core Group approval of any revisions), and seek constantly to add value throughout the design process.
9.4. Escalation. Cost models and "roll-up estimates" should include amounts for escalation in labor,
equipment and material prices in the Preconstruction and Construction Phases only as provided by the Core Group
(the "Escalation Contingency"). In connection with the development of the Final Pricing/Risk Allocation Plan, the
Core Group may determine to fix the Construction Phase Escalation Contingency associated with certain
commodities by use of commonly accepted price indexes or other price-based measures.
9.5. Contingencies in Cost Models. In the Target Cost and its cost models, Design Builder shall carry the
IPD Team Contingency and an Escalation Contingency, each in an amount to be agreed upon by the Core Group.
Design Builder and IPD Team members shall not include separate contingency in any Project cost model to address
refinement of designs, materials, or equipment; instead, Design Builder and IPD Team members shall include
realistic pricing based upon listed assumptions and understandings concerning the scope of work, labor, materials,
and equipment required by the pending design.
9.6. Cost Model Reconciliation. The Core Group will review each update to the Project cost model for
conformance with the Target Cost. If the anticipated Project costs as shown in th