Glossary

Plant-Performance Warranty

An element in the contract between the design-builder and the owner that requires the firm to demonstrate that the project will operate as intended, consistent with the technical and operational criteria and project design. If the project does not meet the defined...

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Prescriptive Requirements

Specific details within an RFP (typically in FPDB procurement) that may include design drawings and/or a description of specific design approaches. Proposing firms may be required to include their own designs - depending on the requirements stated in the RFP - in...

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Process-Performance Criteria

Detailed operational and technical requirements on which the design of process systems and equipment is based. These requirements address all input (influent or raw water) and output material (NPDES permit or finished-water quality standards).

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Progressive Design-Build (PDB)

Two-phase delivery method in which the project's design, cost-estimating, construction schedule, and final GMP or fixed price are developed during the first phase. If the owner and design-builder agree on the schedule and the GMP or fixed price during the first phase,...

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Project Agreement

A legal arrangement in P3 project delivery that defines all the elements of any collaborative-delivery project. (In financing arrangements other than P3, the project agreement is usually referred to as a contract.) The project agreement also specifies risk allocation...

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Joint Venture

A business arrangement of two or more firms that agree to form a new entity for a specific business purpose. The parties to the joint venture manage the enterprise - sharing all profits, losses, expenses, and assets - and have joint-and-several liability to the owner....

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Liquidated Damages

Compensation paid by a design-builder or CMAR firm to an owner, in lieu of all liability for any extra costs, losses, expenses, claims and penalties.

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Loss Control

The act of taking measures to minimize the extent of damage resulting from an adverse event. Collaborative delivery contracts spell out, for each foreseeable adverse event, which party can most efficiently be responsible for taking loss-control measures.

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Loss Prevention

The act of taking measures to prevent or reduce the likelihood of adverse events. Collaborative delivery contracts spell out, for each foreseeable adverse event, which party can most efficiently be responsible for taking loss-control measures.

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Materials Cost Escalation

Unforeseen increases in the cost of materials, which can be an issue, particularly in contracts that span several years. The materials escalation clause in a collaborative delivery contract may be premised on agreed-to cost components in the fixed price or GMP.

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