Glossary

Assuming a risk (or risks) and the associated potential financial burden. The term is used in allocating risks among various parties by determining which party is available to absorb and manage - and therefore is responsible for - a specific risk.

A business arrangement in which an asset is always available to deliver a defined level of service to an owner in return for a steady stream of payments, often used in DBOF and in P3 projects.

The documentation developed by an owner when evaluating the financial implications of a public-private partnership (P3) for financing a capital project. The business case considers the discount rate applied to cash flows expected from a project, efficiency factors...

Approaches to procuring and delivering a capital project that involve close collaboration among the owner, the designer, and the contractor - from design through completion. These include construction management at-risk (CMAR), fixed-price design-build (FPDB),...

The indirect results of alleged failures. Collaborative delivery contracts hold neither the owner nor the design-builder or CMAR firm responsible for the indirect results of its alleged failures. Due to the subjective nature and varying scope of state laws, it may be...

A delivery method that combines the components of design-build - designing, permitting, procurement, construction, testing, and commissioning - with operation and maintenance (O&M) services into a single contract. The owner's final acceptance of the project does...

A further extension of design-build-operate delivery in which an owner enters into a single contract with a DBOF team for the design, construction, long-term operations and maintenance, and financing of a project. The financing arrangement may encompass either the...

A separate (and inserted) contractual relationship with an entity for the purpose of providing specific services to integrate and facilitate work components in a collaborative delivery project.

A project delivery method in which a single fixed price - which encompasses both designing and constructing the project - is established when the contract is signed. FPDB is used when the owner has defined the project requirements and scope of work sufficiently for...

The ratio of the equity contribution to the amount of long-term debt in a P3 project, a key consideration that functions much like the down payment required for a residential mortgage.