Last edited 04 Jan 2021

Design, build, finance, maintain DBFM

N33DBFMNetherlands.jpg
The N33 (pictured here between Assen and Gieten) was a design, build, finance, maintain (DBFM) project in the Netherlands.

Contents

[edit] Introduction

Design, build, finance, maintain (DBFM) is a project delivery method that allows one contractor to design, build and finance a project and then to handle facilities maintenance services under a long-term agreement.

DBFM is similar to design build finance and operate (DBFO), although the type facilities management activities post-project completion differ between the two methods. With DBFM, maintenance refers to actions taken to keep the asset in running order, whereas with DBFO, operations refer to actions taken to achieve business objectives. Maintenance can be considered a subset of operations, since it ensures that buildings and other assets retain a good appearance and operate at optimum efficiency.

Also see Design Build Finance Operate Maintain DBFOM.

DBFM can be attractive to some clients, as it creates a single point of responsibility for delivering the project, reduces long-term risk, and incentivises the contractor to adopt low-maintenance solutions. It may also be an attractive option for the contractor who is providing maintenance services, since it results in regular payments from the client over a long period (sometimes as long as 25 to 30 years).

[edit] PPP and PFI

DBFM is often used for large projects (such as those involving infrastructure), which historically have often been developed through the Private Finance Initiative (PFI) form of Public Private Partnership (PPP).

PPP refers to a very broad range of partnerships in which the public and private sectors collaborate for some mutual benefit. For more information see: Public Private Partnership.

PFI is one of the three procurement routes favoured by the Government Construction Strategy for central civil government projects. The risk associated with PFI projects is transferred to the building contractors, but as a result, operating companies may charge high prices. For more information see: Private Finance Initiative.

[edit] How DBFM works

DBFM is an integrated contract model in which, typically, a public sector client is procuring a service rather than just a product. The contractor (the private organisation in a Public Private Partnership) acts as the financier for the project and assumes greater risk and responsibility.

The public partner may also seek more creative opportunities for producing solutions. For example, the contractor may use their own in-house designers to design the building, or they can appoint consultant designers. The client's designers can also be employed by the contractor to help complete a design which they have begun (as in design and build).DBFMgrid.jpg

The contractor is also considered responsible for any errors, and if mistakes should occur before the building phase is complete, the client may opt to withhold payment instalments. This can serve to encourage the successful completion and maintenance of the project.

[edit] Applications

Contractors may find an increased use of DBFM with government infrastructure projects. However, a great deal of risk is given to the contractor, and the price they offer will reflect this.

DBFM can result in a long-term relationship between the client and contractor, since it is typically entered into before any significant design work is undertaken and can last until well beyond the completion of construction, which can be many years on a large infrastructure project. Consequently, it is extremely important that the client defines their requirements very carefully, in particular the quality that is required and how it will be judged.

DBFM is sometimes used on EU projects and is often used in the Netherlands, particularly for roads, bridges and other transport related structures. The N33 highway project in the Netherlands is an example of a DBFM project. The contractor, the Royal BAM Group nv, was not only fully responsible for designing and building the project, but also handled the administration and all maintenance for the road. The project was built from 2012 to 2014, and the Royal BAM Group was contracted to provide 20 years of ongoing maintenance.

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