Construction 101. C.A.S.H. 36 th Annual Conference February 23-25, 2015 Sacramento Convention Center

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1 Construction 101 C.A.S.H. 36 th Annual Conference February 23-25, 2015 Sacramento Convention Center This training is provided for educational, compliance and loss-prevention purposes only and, absent the express, prior agreement of DWK, does not create or establish an attorney-client relationship. The training is not itself intended to convey or constitute legal advice for particular issues or circumstances. Contact a DWK attorney for answers to specific questions. Panel Members Rob Smiley Chief Operations Officer Sunnyvale School District Kris Meyer President Ledesma & Meyer Construction Co., Inc. Brent McClure Vice President Cody Anderson Wasney Architects Deidree Y.M.K. Sakai Shareholder Dannis Woliver Kelley 1

2 Roadmap Roles on Your Team Selecting Your Team Members Project Delivery Systems Prudent Considerations Roles on Your Team General Project Roles: Management Design Construction Key Project Players: Owner Architect Construction Manager (CM) Contractor Other Consultants 2

3 Roles on Your Team (cont.) Other possible consultants: Program Managers Engineers Landscape Architects Environmental Consultants Land Surveyors Attorneys Who you select is a critical factor in the success of your program. Selecting Your Team Professional Services Construction-Related Professional Services: Architects Engineers Environmental Land Surveying Construction Project Management 3

4 Selecting Your Team Professional Services (cont.) Procurement: Selection must be based on demonstrated competence and professional qualifications necessary for the satisfactory performance of the services required. (Government Code 4525 et seq.) RFQ/RFP Process for Competitive Selection Solicit Statements of Qualifications Advertise? Include selection criteria Include the proposed contract Interview the finalists? Funding: Competitive selection of architects, structural engineers, or other design professionals required to qualify for funding from SAB. (Education Code ) Selecting Your Team Construction Services Construction Services General rule: selection through a public, competitive bidding process for contracts exceeding bid threshold.* (Public Contract Code et seq.) Exceptions: Emergencies Lease-Leaseback Design-Build Energy Efficiency Projects Piggyback CMAS Joint Powers Act *Alternate project delivery methods will be discussed later. 4

5 Selecting Your Team Construction Services (cont.) Alternative: California Uniform Public Construction Cost Accounting Act (CUPCCAA) If district adopts CUPCCAA, district allowed alternate system of informal/formal bidding If district adopts CUPCCAA, higher bid threshold Contract without bidding for up to $45,000 Informal bidding process for contracts over $45,000 up to $175,000 Formal bidding process for contracts over $175,000 (Public Contract Code et seq.) Selecting Your Team Construction Services (cont.) Where competitive bidding is used, who is awarded the contract? The Responsible Bidder Submitting the Lowest Responsive Bid; or Reject all bids. 5

6 Selecting Your Team Construction Services (cont.) Prequalification before bidding for construction services: Must prequalify General Contractors and MEP Subcontractors when: Districts have an ADA over 2,500; and, $1M+ project, SFP-funded project, or SFP reimbursement will be requested (Public Contract Code ) May voluntarily prequalify Contractors (Public Contract Code ) Selecting Your Team Construction Services (cont.) Emergencies Repair, alteration, work, or improvement necessary to: Permit continuance of existing school classes, or Avoid danger to life or property Board must unanimously vote, with approval of county superintendent to either: Contract without advertising or inviting bids, or Authorize the use of day labor or force account 6

7 Selecting Your Team Construction Services (cont.) Other Exceptions to Competitive Bidding RFQ/RFP Process Discussed later in Project Delivery Systems Negotiated contracts (No Bidding) Piggyback CMAS Joint Powers Act Selecting Your Team Special Services Special Services Special services providers include: Financial Engineering Legal Insurance Services Providers of special services can be selected if they are specially trained, experienced, and competent to perform the special services required. (Government Code ) 7

8 Project Delivery Systems Project delivery systems are different ways of organizing the financing, design, and construction of a particular project. Different approaches leverage risk and reward in different ways. Alternative selection processes may apply to different project delivery systems. Project Delivery Systems Selection Process Public, Competitive Bid: Design-Bid-Build Multiple Prime / Multi-Prime Construction Management At Risk May Be Negotiated, Competitive Selection Recommended: Lease-Leaseback Design-Build 8

9 Project Delivery Systems Design-Bid-Build Design-Bid-Build: traditional approach Architect prepares bid package based on design s scope of work. Contractors prepare bids that must correspond to the bid package District opens bids and either awards to the qualified lowest bidder, or rejects all. Project Delivery Systems Design-Bid-Build Construction Manager (Opt.) District Architect General Contractor Subcontractors = Owner Team 9

10 Project Delivery Systems Design-Bid-Build Points for Consideration Accepted, established approach Lowest responsive, responsible bidder Project Delivery Systems Multiple Prime/Multi-Prime Multiple Prime / Multi-Prime: a twist on the traditional approach. Instead of using one General Contractor, District contracts with multiple trades. District opens bids and either awards contracts to the qualified lowest bidder, or rejects all per trade as general contractors. A construction manager can be used to assist with coordinating the multiple trades. 10

11 Project Delivery Systems Multiple Prime/Multi-Prime District Architect Construction Manager Trade Contractor Trade Contractor Trade Contractor = Owner Team Project Delivery Systems Multiple Prime/Multi-Prime Points for Consideration District has more control over project, i.e. selection of contractors, scheduling, pricing District does not have to pay General Contractor markup to manage the project District will be held responsible for coordination issues For examples, District responsible to other trade contractors if impacted by another trade contractor s damage/delay 11

12 Project Delivery Systems CM At Risk CM At Risk General Contractor and Construction Manager are merged District contracts with a builder to act as the Construction Manager, who then contracts with Trade Contractors. Similar to Multiple Prime/Multi-Prime except CM At Risk is responsible for completing the project on time. Project Delivery Systems CM At Risk District Architect Construction Manager Trade Contractors = Owner Team 12

13 Project Delivery Systems CM At Risk Points for Consideration CM At Risk assumes some of the liability that the District would assume in Multiple Prime/Multi-Prime projects According, CM may charge a higher fee schedule than a CM managing Multiple Prime/Multi-Prime projects Project Delivery Systems Lease-Leaseback Lease-Leaseback Owner leases the project site to builder (developer), who performs construction as the tenant and receives compensation for the improvements to the property. Builder has early involvement with design instead of traditional approach where design is completed before it is provided to potential builders Traditionally, included a significant financing component. 13

14 Project Delivery Systems Lease-Leaseback Construction Manager (Opt.) District Architect LLB Builder Trade Contractors = Owner Team Project Delivery Systems Lease-Leaseback Points for Consideration District allowed to select builder based on qualifications instead of price Early participation of builder may result in less change orders Legal challenges to the delivery system 14

15 Project Delivery Systems Design-Build Design-Build District identifies the finished product it wants, and contracts with a developer who will create the design and build it. Design-Build Entity (DBE) may have in-house architects/engineers, or contract separately for those services. Project Delivery Systems Design-Build Program Architect Owner Design-Build Entity (Architect + Contractor) = Owner Team Trade contractors 15

16 Project Delivery Systems Design-Build Points for Consideration District deals with single point of contact instead of Contractor and Architect Design risk shifts to DBE instead of Owner Team District has less involvement in/control of project District allowed to select DBE based on qualifications instead of price as permitted by statute Selecting a Project Delivery Option What is most important to you? Cost Budget predictability Avoiding claims Staying on schedule 16

17 Prudent Considerations: Communication Communication with your Team All project delivery systems require communication and collaboration. Ensure procedures exist for external and internal communication. Establish expectations up front. Requests for Information, Submittals, Change Order processing, Payment Applications, Punch List, Closeout Monitor consistently to ensure expectations are met. Prudent Considerations: Communication (cont.) Communication with Students, Parents and Teachers Before the Project begins Coordinate to minimize disruptions. Advise of potential disruptions in advance. Have a process for communicating and responding to issues and concerns. Keep Students, Parents and Teachers Updated as the Project Progresses. 17

18 Prudent Considerations: Avoiding Additional Costs Consider additional steps before the bid documents are released that can help avoid change orders Analysis of Existing Conditions Coordinated Estimating Constructability Review Coordinate Contract Documents Minimize change orders resulting from conflicting language Prudent Considerations: Update Contract Documents Registered Public Works Contractors Effective Dates/Change Orders Notice to Bidders, Bid Protests Compliance Monitoring & Enforcement by Labor Commissioner/DLSE PWC-100 forms ecpr (certified payroll reports) Designated Subcontractor List Mandatory Prequalification Iran Contracting Act Certification 18

19 Rob Smiley Sunnyvale School District Kris Meyer Ledesma & Meyer Construction Co., Inc. Brent McClure Cody Anderson Wasney Architects Deidree Y.K.M. Sakai Dannis Woliver Kelley 19

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