A client negotiated a design-build contract with a joint venture (JV) general contractor and architect for the design and construction of a $100 million chemical manufacturing facility. The project was constructed within a reasonable time frame and for a fair price. The quality of the work was acceptable and there were not any time-loss safety incidents. The architects and the contractors joint venture was dissolved immediately after substantial completion was achieved and they had received their retention. In only six months after completion, the owner had achieved 90% of potential production output and sales were higher than anticipated. About that time, several employees be feeling ill and several citizens living nearby and working outside the facility filed a claim due to unacceptable odors coming from the plant. The government shut the plant down. It was discovered that there was a major design error in the mechanical exhaust system and it would cost the owner $10 million to redesign and repair, and maybe 10 times this in lost revenue. There would eventually be personnel claims as well due to illness. The owner took the designer to arbitration and won. The owner separately took the contractor to arbitration and won on the basis that the general should have known that the design was in error. Should the owner be allowed to pursue the two parties separately or only the JV? Was the general at

fault? Shouldnt the owner have had some responsibility in this? The city approved the plans what sort of liability do they have? What types of insurance will come into play here? Does this mean the design-build procurement approach is flawed? What sorts of checks and balances are required of the design for a design-build project?