Critical Risks On DB proj e c t s invol v ing de ep foundations, there are three main categories into which risk can be grouped. The subcontractor receives a contract 1. Owner’s Risks: The owner retains the financial risk for the project, which is limited in the case of public owners, including all liabilities for the initial documents issued for design and the risks of design changes that the owner ordered to the DB team. 3. De ep Founda t ion Spe c i a l t y Subcontractor Risks: Coupled with the DB team r i sks , which are transferred to the subcontractor, another risk is the considerable risk of nonpayment. DB projects have gained a bad reputation for having complicated and long payment cycles that can put financial strain on the subcontractor who is pushed into the position of financing the job for long periods of time. The deep foundation specialty subcontractor has to be aware of and negotiate, to the fullest extent possible, the contractual operational of financial risk it faces on a DB project. The second part of this article analyzes the incredible risks that the subcontractor has to avoid or mitigate along with the risks that the subcontractor realistically needs to embrace and cul t ivate to i ts own advantage. 2. DB Team Risks: The DB team owns the design risk, construction risk, the risk of partial or total DSCs, schedule risk ( l iquidated and consequent ial dama g e s ) , subcont r a c tor and subconsultant risk, warranty risk and procurement r isk. Taking into consideration the multitude and the magnitude of these risks on the DB team, the only viable solution for the DB team to manage these risks is to transfer them as much as possible to the subcontractors and subconsultants. Risks To Be Avoided Or Mitigated As a rule, if a risk’s costs cannot be transferred back to the owner (i.e., the source of money on the project), it has to be avoided or mitigated in the subcontract with the DB team; otherwise, the probability of being reimbursed for the cost of that risk by the DB team is close to null. Let’s take for example, the DSC risk. The contract that the DB team has with the owner allocates the responsibility of performing a new and more refined geotechnical investigation and the issuance a new geotechnical baseline report (GBR) to the DB team. By paying for a new investigation, the owner transfers the risk and, by implication, the cost of the DSC to the DB team, meaning that a claim for DSC cannot be presented to the owner. 92 • DEEP FOUNDATIONS • MAR/APR 2018 from the DB team where all the contractual clauses related to the subcontractor’s work flow down from the prime contract to the subcontractor with a specification that the term owner is replaced with DB team and the DB team with a subcontractor. Therefore, without a more specific clause to the contrary, the subcontractor cannot present a DSC claim. This situation can be catastrophic for the financial status of the deep foundation subcontractor. Hence, the only solution for the subcontractor is to do the following: 1. To have a specific DSC clause in its subcontract, specifying clearly how the financial burden for a DSC is allocated between the subcontractor and the contractor. 2. To price, to the best of its ability, the cost of this risk in its subcontract price. 3. Make sure that its subcontract, when it comes to critical clauses like those involving DSCs, takes precedent over any contradictory prime contract provisions. The three important points above represent a basic subcontract negotiation scheme intended to mi t igate r isk. I f the subcontractor wants to avoid the risk of a differing site condition, it can take exception to them in its subcontract, which is not very easy to negotiate and not very favorable from a marketing point of view. Similar efforts should be made to mitigate or avoid design changes risks (i.e., contract risks, payment for design change risks, procurement and warranty risks), operational and logistic risks (i.e., change in means and methods, change in sequencing, extending overhead, etc.) and original subcontract value payment risks. One of the risks that is abusively and unethically transferred to the subcon- tractor is the design risk. The design risk is a risk that the subcontractor should learn to love and to hate. One of the best things that can happen to a subcontractor is to become part of the design team. A place at
