Analysis of international experience in implementing “Design-Build” and “Design-Build-Operate” contracts

published:
Number: Issue 30(2024)
Section: Economy. Management
The page spacing of the article: 70-82
Keywords: construction, cost, efficiency, infrastructure projects, risk management, project implementation, legislative reform, timeline reduction, insurance, traditional method, price, “Design-Build”, “Design-Build-Operate”, Design-Build, Design-Build-Operate.
How to quote an article: Viktor Komar. Analysis of international experience in implementing “Design-Build” and “Design-Build-Operate” contracts. Dorogi і mosti [Roads and bridges]. Kyiv, 2024. Issue 30. P. 70–82 [in Ukrainian].

Authors

State Enterprise «National Institute for Development Іnfrastructure» (SE «NIDI»), Kyiv, Ukraine
https://orcid.org/0000-0002-2634-9257

Summary

Introduction. The article examines the international experience of implementing large infrastructure projects in various countries using the “Design-Build” and “Design-Build-Operate” methods. It analyzes the advantages and disadvantages of these approaches and explores the possibility of applying them in infrastructure projects in Ukraine. 

Problem Statement. The shortcomings of the traditional project implementation method involve sequential completion of design and construction phases, time spent on organizing tenders for each stage, coordinating various contractors, and the distribution of responsibilities between the designer and the builder. Additional time costs may also arise if changes need to be made to the project documentation during construction.

Objective. To analyze international experience in implementing infrastructure projects using “Design-Build” and “Design-Build-Operate” contracts. The goal is to identify the advantages and disadvantages of these contracts and determine their potential as an alternative to the traditional method for possible implementation in Ukraine. 

Materials and Methods. The research is based on analyzing international experiences with “Design-Build” and “Design-Build-Operate” contracts, as well as examples of infrastructure project implementation in the United States, Europe, and Asia. The study focuses on legislative aspects, implementation procedures, and the effectiveness of these methods, risk analysis, and cost formation during their execution.

Results. The “Design-Build” method allows for the combination of design and construction stages, while “Design-Build-Operate” also integrates operation into a single contract. This reduces coordination and project management costs, minimizes risks for the client, and increases the contractor's responsibility. In most cases, there is an improvement in the quality of work and a reduction in project timelines compared to the traditional method. 

Conclusions. International experience shows that “Design-Build” and “Design-Build-Operate” contracts are effective in implementing large infrastructure projects, particularly in road construction. Their introduction in Ukraine could positively impact infrastructure development, but legislative changes are required to adapt these contracts to local conditions, particularly improving the price indexation mechanism in case of market changes. 

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