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-Part 36 - Construction and Architect-Engineer Contracts ..........................................................90+Part 36 - Construction and Architect-Engineer Contracts
+FC 36.000 Design-Build vs. Design-Bid-Build.
+Design-Build and Design-Bid-Build are two methods used to acquire construction.
+Design-Bid-Build (DBB): With the DBB process, the government will issue two contracts. The
+first is to an Architect-Engineer (A-E) firm for the design of the facility; the second is to a
+construction contractor for the building of the facility in accordance with the provided design.
+Once a need is identified, the government will select an A-E firm in accordance with the
+procedures at FAR 36.102-2. The selected firm will design the facility pursuant to the terms of
+the contract. The completed design will include the technical drawings, materials, and estimated
+cost. This becomes the basis for the construction requirements and the Independent
+Government Estimate (IGE). Once the design is developed, the government will use the IGE to
+obtain funding and the design to solicit a construction contract. The offerors for the construction
+contract will base their bids on the design provided by the government. The government will
+award the contract to the lowest priced offeror.
+Design-Build (DB): With DB, the end user (in this instance, the government) issues one contract
+to a construction contractor where the contractor is responsible for developing the design of the
+construction and subsequently performing the construction. Procedures for using DB are spelled
+out in FAR 36.101-2. In phase one, the government develops the scope of work describing the
+needs of the facility and the salient characteristics of the facility to include the estimated budget.
+The government also develops the technical evaluation factors, which assess and determine
+those vendors that will proceed from phase one to phase two. Vendors prepare their design to
+meet the requirements of the government and make a phase one offer to the solicitation, which
+does not include price. The government evaluates offers in accordance with the evaluation
+factors and selects vendors to move to phase two.
+Phase one does not follow FAR part 15 procedures. The vendors selected to advance to phase
+two are given the opportunity to prepare a complete proposal for their design evaluated in phase
+one. The phase two proposal will include pricing and technical information regarding their plan
+to implement their phase one design. The proposals are evaluated by the government, and the
+government makes a best value determination based on the evaluation criteria. The contract is
+awarded, and the contractor builds the facility to their design. Phase 2 follows FAR part 15
+procedures.
+FC 36.000 Distinction between design phase and construction phase.
+In Design-Bid-Build, the distinction between the design and construction phases is clear. An
+Architect-Engineer (A-E) firm is engaged in the design phase. A construction contractor is not
+involved in the design process as they will not be engaged until the final design is complete.
+With the final design, the government solicits a construction contractor to build according to the
+design provided. During construction, if changes to the design are necessary, the construction
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+contractor engages with the government, who in turn, may engage with the A-E firm for the
+necessary changes. This distinction is clear as there are two separate contractors – the A-E firm
+and the construction contractor.
+In Design-Build, one contractor is responsible for both the design and construction phases.
+Accordingly, the contractor must address any design issues discovered during the construction
+phase.
+FC 36.002(c) Design-Build success factors.
+Design-Build integrates design and construction services into a single contract; it’s
+fundamentally different from traditional linear Design-Bid-Build or Architect-Engineer contracts.
+The professional responsibility for the design and design integrity is with the Designer-of-Record
+on the contractor’s Design-Build team, not the government. Success depends on understanding
+these unique aspects and structuring procurements accordingly.
+FC 36.1 Presolicitation notice for construction and architect-engineer contracts.
+A presolicitation notice is intended to stimulate interest in the upcoming construction project.
+This is especially important for small businesses as they need as much time as possible to
+assemble a team to compete for the project. The presolicitation notice should include a brief
+description of the work, the location of the work, tentative dates for the acquisition process, state
+the availability of construction plans, and if the construction will be limited to small businesses.
+FC 36.1 Maximizing preaward site visits for construction contracts.
+Preaward site visits under FAR part 36 enable potential contractors to physically inspect project
+locations, evaluate site conditions and constraints, and gather critical information necessary for
+developing accurate proposals and realistic project approaches. These visits support informed
+bidding by allowing contractors to assess site accessibility, existing conditions, environmental
+factors, and logistical challenges that may impact construction methods, scheduling, and costs.
+Federal acquisition teams should conduct comprehensive site visits that facilitate meaningful
+contractor engagement and information exchange. Structure visits to include scenario-based
+walkthroughs where vendors address specific implementation challenges, enabling government
+personnel to identify potential requirement gaps or unrealistic expectations. Incorporate real-
+time technical discussions with project engineers, facility managers, and end-users to clarify
+operational requirements and construction constraints. Consider presolicitation site visits to
+gather industry feedback that can strengthen requirement development and reduce postaward
+modifications. Document existing conditions thoroughly through photos, videos, and
+measurements, provide studies and surveys, and include opportunities for confidential vendor
+feedback through discovery sessions. Effective site visits reduce proposal assumptions, surface
+practical construction challenges early, and establish collaborative relationships that minimize
+differing site conditions claims while ensuring contractors can deliver feasible, innovative
+solutions.
+FC 36.101 Construction.
+Refer to FAR part 12 (if commercial), FAR part 14 (if using Sealed Bid) and FAR part 15 (if
+contracting by negotiation) for the presolicitation requirements.
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+FC 36.101-2(b)(1) Use performance-based requirements.
+Minimize prescriptive specifications and maximize performance-based requirements to allow
+design-build teams to innovate. Since the design-builder holds responsibility for design
+adequacy, detailed government specifications can limit the benefits of integrated delivery and
+create unnecessary risk conflicts.
+FC 36.101-2(b)(2) Emphasize qualifications over price.
+Structure evaluations where past performance and experience are the most heavily weighted
+factors, with all non-price factors combined being significantly more important than price.
+Here are some approaches that can support an emphasis on qualifications:
+● Verify past performance of the integrated design-build entity, key designers, and trade
+partners for projects within the past seven years.
+● Credit teams with demonstrated collaboration history on previous design-build projects,
+as the relationship between contractor and designer-of-record is critical to success.
+● Require identification of the Design-Build Project Manager and key personnel with
+specialized certifications such as Leadership in Energy and Environmental Design -
+Accredited Professional (LEED-AP), Project Management Professional (PMP), Design-
+Build Institute of America (DBIA), Certified Construction Manager (CCM), or
+Construction Specifications Institute (CSI).
+FC 36.101-2(b)(4) Optimize competition through strategic short-listing.
+While the FAR permits up to five offerors in phase two, consider limiting phase two to the three
+most highly qualified to encourage meaningful competition while reducing administrative burden.
+When determining and announcing the maximum number of offerors that will be selected to
+submit phase two proposals, the contracting officer can favor the lowest number (e.g. three) that
+would yield effective competition.
+Developing a phase two cost proposal typically includes a firm demonstrating completion of up
+to 80 percent of the design work and identifying detailed space and material needs. Some in
+industry report that the cost of developing a full proposal for a phase two design-build contract
+can exceed three percent of the value of the project (see H. Rept.113-668 - Design-Build
+Efficiency and Jobs Act of 2014).
+Also, offerors submit the best proposals when they believe their probability of win (pWin) is high
+enough. The maximum number of five would mean 20 percent pWin as opposed to over 33% if
+the number is set at three.
+Provide draft RFPs to short-listed proposers for feedback and conduct confidential meetings
+before proposal submission to encourage innovation and address concerns.
+FC 36.101-3 Government estimates.
+The government will develop its estimate based on the design. The design will either be
+developed by the government or by an Architect-Engineer (A-E) firm. If it is done within the
+government, the government employed engineer will develop the estimate based on the design
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+the government created. If an outside A-E firm does the design, they will also include a
+proposed estimate in their final design.
+If using the Design-Build method, the government will establish the budget parameters when
+establishing the scope of work in phase one. Although the complete government estimate is not
+established until the final design is completed, the budget parameters will establish a general
+range of the estimate. Once the final design is approved and awarded, the true government
+estimate can be established.
+FC 36.101-3 Disclose the magnitude of the construction project.
+Disclose the target price range (not the Independent Government Estimate) in the solicitation to
+maximize project value in terms of quality, scope, energy efficiency, sustainability, durability,
+and life-cycle costs. Price range disclosure supports industry participation by enabling
+contractors to assess project feasibility and prevents award delays by reducing inappropriate
+proposals.
+Including a target "design to" price range allows offerors to develop solutions within funding
+constraints while enabling agencies to evaluate trade-offs between cost and quality to achieve
+best value. Agencies should encourage project enhancements within the established price
+parameters, for example, by structuring them in a tiered manner, such as “desirable”
+enhancements and “if possible” additions.
+FC 36.101-3 Government construction specifications.
+Government construction specifications, to the maximum extent practical, should conform to
+widely recognized standards or specifications used in construction. Specifications should clearly
+identify and describe the particular physical, functional, or other characteristics required,
+especially when brand name or equal descriptions are necessary.
+FC 36.2 Construction specific information on notification of award notification.
+Construction award notifications should identify the solicitation and the awarded price, so it is
+clear which contract action the notice pertains to. In the notice, it is important for the contracting
+officer to articulate the required tasks that must be completed prior to commencement of the
+work or issuance of the notice to proceed (NTP). For instance, advise the contractor that the
+required payment and performance bonds must be promptly executed and returned to the
+contracting officer, and specify the date of commencement of work, or advise when a NTP will
+be issued.
+FC 36.3 Postaward pre-construction orientation.
+In addition to the best practices outlined in FC 42.3, postaward pre-construction orientations
+should consider the following matters of interest:
+● Statutory matters, such as labor standards (FAR part 22) and subcontracting plan
+requirements (FAR part 19).
+● Other matters of interest, such as contractual, administration (e.g., security, safety, fire
+and environmental protection), and construction responsibilities.
+FC 36.3 Notice to Proceed.
+Construction is unique as the contractor is not expected to commence work at the award of the
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+contract. The contractor is not expected to begin work until the Notice to Proceed (NTP) is
+issued. The NTP is issued by the contracting officer when the contractor has completed certain
+tasks. These tasks include, but are not limited to, gaining access to the government facility
+where the construction will take place, obtaining the necessary performance and payment
+bonds, and other training and tasks required by the government.
+Once the contracting officer is satisfied that all the necessary tasks are completed by the
+contractor, the contracting officer will issue the NTP. This letter states that the contractor has
+the approval to start the construction and it states the timeframe in which the construction is
+expected to be completed. This is very important as the timeframe for completing the project
+begins with the issuance of the NTP and not at the time of the contract award.
+FC 36.000 Plan for collaborative contract administration.
+Design-build requires more government engagement during design development than traditional
+construction contracts. Establish clear processes for "design commitment" (the point at which
+design is confirmed to meet criteria, codes, budget, and schedule).
+Define agency and design-builder roles clearly, particularly for submittal processes and quality
+assurance. Use "over-the-shoulder" reviews that allow informal collaboration during design
+development rather than formal reviews only after significant design investment.
+FC 36.000 Team integration and training.
+Staff projects with individuals educated and experienced in design-build best practices whose
+personalities are well-suited to the collaborative nature of the design-build process. Use co-
+location when justified by project complexity. Establish structured partnering processes and
+executive leadership groups to monitor project execution regularly.