FAR Companion Part 36

Part 36 - Construction and Architect-Engineer Contracts

FC36.000 Design Build FC 36.000 Design-Build vs. Design Bid Build. 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 Federal Acquisition Regulation (FAR) Companion 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.

FC36.000 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 Federal Acquisition Regulation (FAR) Companion 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.

FC36.002(c) FC 36.002(c) Design-Build Success Factors. 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. Federal Acquisition Regulation (FAR) Companion FC36.1 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.

FC36.1 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.

FC36.101 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.

FC36.101-2(b)(1) Federal Acquisition Regulation (FAR) Companion 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.

FC36.101-2(b)(2) 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. Federal Acquisition Regulation (FAR) Companion ● 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).

FC36.101-2(b)(4) 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.

FC36.101-3 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 Federal Acquisition Regulation (FAR) Companion 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.

FC36.101-3 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 Federal Acquisition Regulation (FAR) Companion 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.

FC36.2 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.

FC36.2 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.

FC36.3 Postward FC 36.3 Postaward pre-construction orientation. In addition to the best practices outlined in FC42.3, 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.

FC36.3 FC 36.3 Notice to Proceed.

Construction is unique as the contractor is not expected to commence work at the award of the Federal Acquisition Regulation (FAR) Companion 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.

FC36.000 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 commitment" (the point at which design is confirmed to meet criteria, codes, budget, and schedule. Federal Acquisition Regulation (FAR) Companion 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.

FC36.000 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.