What is meant by “risk-sharing” in design-build contracts?

“Risk-sharing” in design-build contracts refers to the collaborative approach in which project stakeholders, including the owner and the design-build team, agree to jointly distribute the risks associated with a project. This concept is fundamental to the design-build delivery method, where the integrated team structure encourages open communication and collective responsibility for managing risks throughout the project lifecycle.

By sharing risks, all parties are incentivized to work closely together to identify potential challenges early on and develop mitigation strategies. This approach can enhance project outcomes, as it fosters a cooperative environment that prioritizes achieving the project goals while maintaining budget and schedule constraints.

In contrast, other options do not capture the essence of risk-sharing. For example, assigning all risks to the contractor creates an imbalance in responsibility, potentially leading to conflicts and issues in project execution. Overlooking risks to expedite timelines undermines project quality and can lead to significant problems later on. Lastly, merely focusing on potential rewards without considering the associated risks is shortsighted and does not contribute to a sustainable project management strategy.