Lease-Leaseback Project Delivery Method

Transcription

1 Lease-Leaseback Project Delivery Method ASBA Technical Meeting & Tradeshow Winter 2013 Presented by: Mark Baginski Principal Verde Design, Inc. James Moore V.P. of Pre-Construction Services Robert A. Bothman, Inc.

2 Agenda California Legal Authority What is Lease-Leaseback? Benefits of Lease-Leaseback Delivery Lease-Leaseback Process Lease-Leaseback Team L-LB Entity Selection The RFQ-RFP for L-LB Entity Reference Checks Interviews Contract Agreements Other Costs Lease-Leaseback A Landscape Architect s Perspective The Contractor s Role

3 Legal Authority California Education Code Section et. seq. the governing board of a school district, without advertising for bids, may let, for a minimum rental of one dollar ($1) a year, to any person, firm, or corporation any real property that belongs to the district if the instrument by which such property is let requires the lessee herein to construct on the demised premises, or provide for the construction thereon of, a building or buildings for the use of the school district during the term thereof, and provides that title to that building shall vest in the school district at the expiration of that term

4 What is Lease-Leaseback? A construction project delivery method A way to select a firm to build or modernize school facilities through a qualifications based process Can pick a firm that fits with District culture Value can be a factor of selection A possible financial mechanism

5 Lease-Leaseback Process District Elects to Pursue L-LB Delivery Receive Preliminary Board Approval Engage Legal Counsel to Develop Agreements Select Design Professional Through RFP/RFQ Conceptual Plan Development Based on Program & Available Budget Select L-LB Entity Through RFP/RFQ Enter into a L-LB agreement with L-LB Entity

6 Lease-Leaseback Team District Legal Counsel District CBO Architect Contractor Construction Manager (if Applicable)

7 L-LB Entity Selection RFP or RFQ Reference Checks Interviews Selection & Board Approval Contract Negotiations Board Approval of Contract

8 Contract Agreements Preliminary Services Agreement Site Lease Facilities Lease General Conditions

9 A Landscape Architect s Perspective

10 Lease-Leaseback: An LA s Perspective Why consider this alternative delivery method? What are the benefits of Lease-Leaseback? Thoughts on process Summary

11 Why Alternative Delivery? The traditional Design-Bid-Build delivery method for Public Contracts requires that the District accept the lowest bid. This process often does not consider the strength of a firm s qualifications. Designing to the lowest level versus the strengths of the contractor Opportunity to collaborate Everyone needs to do their homework GMP with contingency value added items

12 Benefits of L-LB from the Designer s Perspective Based on Clear Goals and Objectives More bang for your buck Collaborative environment Positive/Proactive communication Sharing knowledge This leads to a more successful project through a spirit of teamwork and cooperation and avoids adversarial relationships.

13 Benefits of L-LB from the Designer s Perspective Results: Reduced or Eliminated Change Orders Collaborative approach to the project Significant reduction in legal risks associated with design-bid-build Speedier project delivery

14 Thoughts on Process: An Architect s Perspective Need to embrace the process Need to think about things a bit differently Communication is essential for success Keep your options open Plan for contingencies Wish list items Possible scenarios Carry forward into next project on large multiple sites

15 Summary: An Architect s Perspective Private Sector process in the Public Sector Team atmosphere Better budget and schedule control Reduced risk of legal problems through partnerships established early in the project Easier Close Out process due to team relationships

16 Contractor s Role

17 L-LB Design Phase Services Preliminary Service Agreement Scope Site Assessment Budgeting Value Engineering Constructability Review Master Scheduling Bid Packaging & GMP Development Subcontractor input Construction Logistics Planning

18 What is a GMP? A Guaranteed Maximum Price (GMP) is the amount that the L-LB Entity guarantees (the sum of the cost of the work and the L-LB Entity s fee) it will not exceed. The maximum is subject to additions and deductions, due to changes in the scope of work. All costs which exceed the GMP and are not approved by change order are paid by the L-LB Entity.

19 GMP Preparation Pre-qualify Subcontractors Subcontractor Bid Solicitations Compliance with Local & Disadvantage Subcontractor Hiring Requirements Bidding Documents Plans and Specifications District Front End Documents Scope of Work Bid Packages OCIP or PLA Requirements Proposal Forms Master Subcontract Agreement Master Schedule

20 GMP Preparation Pre-Bid Meeting Evaluate and Level Bids Negotiate Prices Self-Perform Scope Estimates GMP Cost Breakdown General Conditions CSI Work Breakdown-Itemized Profit and Overhead Itemization Bonds & Insurance Contingencies GMP Written Proposal

21 CM at Risk - GMP Contractor s Cost (GC s + Fee) + Contractor Self-Perform Scope + Subcontractors Bids + Contingency (% controlled by GC) + Contingency (% controlled by District) Changes to GMP: Errors & Omissions Change of Scope Unforeseen Conditions = GMP

22 L-LB Services: Construction Phase Team Management and Coordination Scheduling Cost Controls and Change Order Management Submittal Process Subcontracting

23 L-LB Services: Construction Phase Field Management Safety Program Quality Program Project Close Out Process Warranty Period Service

24 Acceptance of Risk Will Guarantee the Cost with a GMP We Cover the Gap in the GMP We Will Assure On-Time Completion We Will Furnish a Payment & Performance Bond if Requested We Will Comply with Owner Controlled Insurance Policy Requirements We function as the L-LB Developer/Contractor

25 L-LB vs. Hard Bid L-LB Hard Bid Owner receives competitive pricing X X Performance and payment bonds X X Ability to re-bid individual trades X No Prequalify all subcontractors X No Field coordination control X X Commissioning/warranty issues X X Price Guarantee * X X Contractor pays for scope gaps X X Contractor involved in design phase X No * Price Guarantee in Hard Bid is the floor but in L-LB it is the ceiling.

26 Summary: Advantages of L-LB Owner hand picks their designer and builder Project team works in a collaborative atmosphere Greater schedule control / flexibility Greater budget control including re-bid on individual trades if necessary Pre-qualify all trade contractors Competitive pricing in each trade Lowers potential for future change orders Perceived as more friendly contracting approach by designers and subcontractors Cost savings Open Book financial approach

27 Benefits to Architects A/E maintains contractual relationship to District Selection of contractor based on qualifications Contractor involvement during design phase Adversarial GC relationship eliminated GMP prior to construction

28 Benefits to Contractor Lower competition virtually eliminating unqualified contractors from selection process Final selection of contractor based on qualifications & team fit Contractor involvement during design phase helps eliminate design ambiguities prior to final pricing and through construction Much faster and more effective transition from pricing to construction Collaborative process eliminates traditional adversarial relationships