Publicly Bid: Negotiated, Non-Bid: Hybrid: 5/12/2017. Design-Bid-Build Multiple-Prime Contracting. Lease-Leaseback* Design-Build

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1 1 Leigh Sata, Santa Rosa Junior College Kelle Lynch McMahon, Peralta Community College Mark Kelley, Dannis Woliver Kelley Deidree Sakai, Dannis Woliver Kelley 2 1

2 Publicly Bid: Design-Bid-Build Multiple-Prime Contracting Negotiated, Non-Bid: Lease-Leaseback* Design-Build Hybrid: Construction Management At Risk Integrated Project Delivery (IPD) 3 4 2

3 Construction Manager (Opt.) District Architect General Contractor =Owner Team Subcontractors 5 5 Advantages Familiar and established way of delivering a project. A/E of record works for District and represents owner. Suitable Advantages for competitive bidding w/ lowest price initially. Disadvantages No early contractor involvement. Potential conflicts between general contractor and architect after construction begins. Higher Disadvantages probability of change orders, including deductive ones. Could be adversarial. 3

4 Legal perspective Industry perspective District perspective 7 District Architect Construction Manager Trade Contractors =Owner Team 8 4

5 Advantages Trade contractors are procured through competitive lowest responsible bidders. Avoids general contractor mark-up. Competitive selection (not low bid) for construction manager to lead project. Can rebid portions of the work, rather than the whole scope, if needed. Disadvantages Disadvantages Potential conflicts between multiple contractors and architect after construction begins. Bids over budget are challenging to adjust to obtain cost reductions. Potential overlaps or gaps in scopes of work. Construction Higher risks due to multiple contractors, particularly delay/interference claims. Difficult to coordinate and control schedule. Additional work and risk for District: more scopes of bid protests; contract admin. Legal perspective Industry perspective District perspective 10 5

6 11 Construction Manager (Opt.) District Architect LLB Builder =Owner Team Trade Contractors

7 Owner Architect Builder Owner lease to Builder Owner makes tenant improvement payments Lease expires (grey area) Design Input From LLB Entity Construction Construction start Time Construction completion and lease payments begin K-12 (Ed. Code 17406): (a) (1) Notwithstanding Section 17417, the governing board of a school district, without advertising for bids, may let, for a minimum rental of one dollar ($1) a year CCDs (Ed. Code 81335): The governing board of a community college district may let, at a minimum rental of one dollar ($1) a year 14 7

8 Authorized by Education Code Provides Districts with flexibility and benefits that may not be possible with some of the other delivery methods. LLB allows an owner to select a GC during the design/preconstruction phase through a defined qualification and fee based selection process. All requirements for construction and/or public works are still applicable; i.e. prevailing wage, bonds, insurance, indemnification, Field Act compliance (seismic and accessibility), and skilled workforce requirements. 15 Advantages A District may use Lease- Leaseback to finance the project. The District does not have to award contract to lowest bidder. Generally less adversarial, fewer change orders, less litigation. The District may participate in selecting Developer-Contractor, and all the trade contractors and suppliers. Solicitation of savings/cost can create costs savings. Disadvantages Uncertainty (post- Davis v. Fresno USD environment); risk-averse CM CCDs still avoid. Steeper District/public learning curve than bid-based contracts. Thought to be more expensive up front than bid-based contracts. Conflict of interest still a major issue (not resolved by the new K- 12 statute). 8

9 Legal perspective Industry perspective District perspective 17 Program Architect District Design-Build Entity (Architect + Contractor) =Owner Team Trade contractors 18 9

10 Advantages Builder and architect are on the same team. Disadvantages Builder and architect are on the same team. Multiple packages may provide greater opportunity for participation by local trade contractors. Earlier knowledge of construction costs; guaranteed during design of project. No common standards for methodology. Steeper District/public learning curve than bid-based contracting. Single point of responsibility: Design risk shift to the Design- Build Entity. Turn-key delivery, less day-today District involvement. Less District control. Legal perspective Industry perspective District perspective 20 10

11 21 District Architect Construction Manager Trade Contractors =Owner Team 22 11

12 District Architect Construction Manager Trade Contractors =Owner Team 23 Advantages Potential for faster delivery systems. SU B Mitigate material shortages and price escalation issues vs. multiple-prime contracting. Design Advantages May bring construction input into design phase if properly procured. Disadvantages No common standards for this methodology; confirm appropriate procurement. Steeper District/public learning curve than bid or statutory contracting methods. Disadvantages Confirm legal authorization to use this method; risk-averse CCDs avoid. May facilitate value engineering. 12

13 Legal perspective Industry perspective District perspective

14 Advantages Potential for faster delivery systems. May be the wave of the future for cooperative project delivery. SU B Fewer disputes, resolved Design earlier. Advantages Disadvantages No common standards for methodology in CA CCD projects. Very steep learning curve for all parties to delivery method. Confirm legal authorization to use this method. Disadvantages Legal perspective Industry perspective District perspective 28 14

15 Design-Bid-Build Multi-Prime Contracting Lease-Leaseback Design-Build CM at-risk Integrated Project Delivery 29 Q & A 15

16 Leigh Sata, Santa Rosa Junior College Kelle Lynch McMahon, Peralta Community College Deidree Sakai, Dannis Woliver Kelley Mark Kelley, Dannis Woliver Kelley 31 16