CCFC Regional Workshops. Community College Construction Delivery Methods: Options, Obligations, and Opportunities

Transcription

1 9:00 am Welcome and Opening Remarks CCFC Regional Workshops Community College Construction Delivery Methods: Options, Obligations, and Opportunities COAST CCD Friday, May 5, :00 am to 2:00 pm District Board Room 1370 Adams Avenue Costa Mesa, CA AGENDA 9:15 am Delivery Methods Primer The Legal Perspective: Delivery Method Authorization and Legal Issues Mark W. Kelley, Dannis Woliver Kelley The Construction Manager/Contractor Perspective: Delivery Method Advantages & Disadvantages Layne Arthur, Balfour Beatty Construction Gil Fullen, Balfour Beatty Construction The District Perspective: Selecting the Right Delivery Method Terrance DeGray, Long Beach CCD/Cordoba Corporation Medhanie Ephrem, Long Beach CCD Carri Matsumoto, Rancho Santiago CCD 10:15 am Break 10:30 am Delivery Methods Primer, Continued 11:00 am Progressive Design-Build: An Emerging Option Lance Lareau, San Diego CCD Praful Kulkarni, Chairman National DBIA, gkkworks Brandon Dekker, gkkworks 12:00 pm Lunch 1:00 pm State Funding and Delivery Methods Rebekah Cearley, Community College Facility Coalition Medhanie Ephrem, Long Beach CCD 1:30 pm CCFC Update: State Capital Outlay Funding Rebekah Cearley, Community College Facility Coalition 1:45 pm Q&A 2:00 pm Evaluations & Adjourn

2 CCFC Regional Workshop Community College Construction Delivery Methods: Options, Obligations and Opportunities Friday, May 5, :00 a.m. 2:00 p.m. Coast CCD Delivery Methods Primer Mark W. Kelley Dannis Woliver Kelley Layne Arthur Balfour Beatty Construction Gil Fullen Balfour Beatty Construction Terrance DeGray Long Beach CCD/Cordoba Corporation Medhanie Ephrem Long Beach CCD Carri Matsumoto Rancho Santiago CCD COMMUNITY COLLEGE FACILITY COALITION 1303 J Street, Suite 520 Sacramento, CA Phone (916) Fax (916)

3 5/22/2017 Coast CCD CCFC Workshop May 5 th, Legal Perspective: Mark Kelley, Dannis Woliver Kelley The Construction Manager Perspective: Layne Arthur, Balfour Beatty Construction Gil Fullen, Balfour Beatty Construction The District Perspective: Terrance DeGray, Long Beach CCD/Cordoba Corporation Medhanie Ephrem, Long Beach CCD Carri Matsumoto, Rancho Santiago CCD 2 1

4 5/22/2017 THE CCD CONSTRUCTION MARKET 3 District 2016 Nov. Amount Measure Los Angeles CCD CC $3,300,000,000 San Jose Evergreen CCD X $748,000,000 Desert CCD* CC $577,860,000 Kern CCD* J $502,821,000 MiraCosta CCD MM $455,000,000 Southwestern CCD Z $400,000,000 Antelope Valley CCD* AV $350,000,000 Santa Monica CCD V $345,000,000 Glendale CCD GC $325,000,000 Butte Glenn CCD* J $190,000,000 Hartnell CCD* T $167,000,000 Yuba CCD* Q $33,565,000 TOTAL $7,394,246,

5 5/22/2017 3% 2% Nov-16 4% 5% 5% 5% 45% 6% 7% 8% 10% Los Angeles CCD San Jose-Evergreen CCD Desert CCD* Kern CCD* MiraCosta CCD Southwestern CCD Antelope Valley CCD* Santa Monica CCD Glendale CCD Butte-Glenn CCD* Hartnell CCD* Yuba CCD* 5 District Prior Local bonds sample Amount Compton Community College ,000,000 North Orange County CCD ,000,000 Mt. San Jacinto CCD ,000,000 San Luis Obispo County CC ,000,000 Sonoma County CCD ,000,000 San Mateo County CC ,000,000 Chabot Las Positas CCD June ,000,000 Long Beach CCD June ,000,000 State Center CCD June ,000,000 Cabrillo CCD June ,000,000 Coast Community CD Nov ,000,000 Rancho Santiago CCD Nov ,000,

6 5/22/ Source: 8 4

7 5/22/2017 Source: 9 Source: 10 5

8 5/22/2017 CCD PROJECT DELIVERY OPTIONS 11 Publicly Bid: Design-Bid-Build Multiple Prime Negotiated, Non-Bid: Lease-leaseback Design-Build Hybrid: Construction Management At Risk 12 6

9 5/22/ Construction Manager (Opt.) District Architect General Contractor =Owner Team Subcontractors

10 5/22/2017 The traditional project delivery method, which customarily involves three sequential project phases: design, procurement, and construction. Advantages Disadvantages Competitive bidding, Quality/ Qualifications based on Low Resp. DISTRICT price More owner control Change Orders / delays Familiar & established May be adversarial Arch A/E of record serves as owner liaison Lump-Sum / Closed book, no early involvement GC subs 15 Legal perspective CM perspective District perspective 16 8

11 5/22/2017 District Architect Construction Manager Trade Contractors =Owner Team 17 An important variation of Design-Bid-Build is multiple prime contracting, in which the owner holds separate contracts with contractors of various construction work disciplines, such as general construction, earthwork, structural, mechanical, and electrical. In this system, the owner, or its CM, manages the overall schedule and budget. Advantages Disadvantages Competitive Prime Trades Eliminates GC Premiums CM is on owners side Administrative difficulty; Direct trade and A/E conflicts Lack of single risk bonded price, higher risk with subs. Lump Sum / Closed book, potential overlap or gaps in scope of work. CM P DISTRICT Arch P 18 9

12 5/22/2017 Legal perspective CM perspective District perspective

13 5/22/2017 Construction Manager (Opt.) District Architect LLB Builder =Owner Team Trade Contractors 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

14 5/22/2017 K-12 (Ed. Code (a)(1)): [T]he 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 24 12

15 5/22/2017 Authorized by education code Provides owners 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 skilled workforce requirements. 25 Advantages Best value award (GC/Subs) Open book / transparent Integrated Pre-Con Elimination of claims Contingency transparent Disadvantages Associated politics (Davis v. Fresno) Knowledge of delivery Perception of costs AB 2316 Does not apply DISTRICT LLB PRECON /CONST subs Arch 26 13

16 5/22/2017 Legal perspective CM perspective District perspective 27 Program Architect Owner Design-Build Entity (Architect + Contractor) =Owner Team Trade contractors 28 14

17 5/22/2017 A project delivery method that combines architectural and engineering design services with construction performance under one contract. Advantages Disadvantages Qualifications Based Not as common as DBB Risk with Design / Builder Team / Integrated approach / Creative solutions. Tends to be more suitable towards larger new construction vs. smaller modernizations. Lack of design control DISTRICT DB ENTITY Cnslt Progr. Minimal change orders, early budget and design estimates, scope controls Higher learning curve for delivery method Best Value Award Design Consul D/B subs 29 Legal perspective CM perspective District perspective 30 15

18 5/22/ District Architect Construction Manager Trade Contractors =Owner Team 32 16

19 5/22/2017 District Architect Construction Manager Trade Contractors =Owner Team 33 A project delivery method in which the Construction Manager acts as a consultant to the owner in the development and design phases, but assumes the risk for construction performance as the equivalent of a general contractor holding all trade subcontracts during the construction phase. Advantages Disadvantages Qualifications Based Lack of subcontractor transparency since based on lump sum. DISTRICT Risk is on CM, subs assigned to CM Pre-Construction work, early involvement with procurement, schedule, budget, etc. Legal authorization for delivery method. No common standards for methodology. CMAR/ GC Arch subs 34 17

20 5/22/2017 Legal perspective CM perspective District perspective 35 Design Bid Build CM Multi-prime CM at Risk Lease-Lease Back Design Build 36 18

21 5/22/2017 LLB Gil Fullen Layne Arthur Mark Kelley Terrance DeGray Medhanie Ephrem Carri Matsumoto 38 19

22 CCFC Regional Workshop Community College Construction Delivery Methods: Options, Obligations and Opportunities Friday, May 5, :00 a.m. 2:00 p.m. Coast CCD Progressive Design-Build: An Emerging Option Lance Lareau San Diego CCD Praful Kulkarni gkkworks Brandon Dekker gkkworks COMMUNITY COLLEGE FACILITY COALITION 1303 J Street, Suite 520 Sacramento, CA Phone (916) Fax (916)

23 Lance Lareau, AIA, LEED AP Praful M. Kulkarni, AIA J. Brandon Dekker, M.S., DBIA Design/Build Statute in California for CCS As of January 1, 2008, Community Colleges can use design build under SB614. Must be at least $2.5M in value Requires project specific Board resolution Need to evaluate the project based on five minimum criteria. Price (10%) Technical Experience (10%) Life cycle cost over 15 years (10%) Skilled Labor Force (10%) Safety Record (10%) 1

24 Why a New Way? Introduction The Airport s Commitment to develop World Class Facilities Deliver Exceptional Project Outcomes (EPO) Develop Programs that meet all Stakeholder Requirements Become an Agency of Choice for Designers & Builders Create an Environment of Collaboration Develop a Partnered Approach Resolution & Problem Solving Promote Creativity & Innovation HAVE FUN!!! Why Design-Build? Introduction Single Point of Accountability Enhanced Risk Allocation Quicker, More Cost Effective Project Different Variations Can Be tailored to the unique project and client needs 2

25 Design-Build Variations Prescriptive DB Includes some degree of design completion (usually 10-30%) as part of procurement Typically more price-based procurement Owner s preferences are clearly defined in procurement documents Selection is based on some combination of qualifications schedule & cost (GMP) During procurement owner has little input into this preliminary design Changes to any element of the project at a later date, after contract negotiations, can lead to change orders Design-Build Variations Performance DB Measureable performance criteria or objectives for operation, rather than on specific design approaches Utilized when an owner has specific performance goals Includes standard construction specifications while allowing proposers greater flexibility in the design & approach Often requires some level of design completion much like the prescriptive approach (can be as much as 10-30%) Design is completed with no input from the owner with the exception of performance objectives detailed in procurement docs Can also lead to future change orders 3

26 Progressive Design-Build A New Way Allows for enhanced owner control of scope, quality, price, & schedule decisions Allows for enhanced owner input throughout the project Decisions are based on more than construction cost Practically eliminates change orders & surprises Simple & less costly procurement Single Point of Accountability Enhanced Risk Allocation Quicker, More Cost Effective Project Progressive Design-Build A New Way Charter Team 1. Owner 2. O & M Team 3. Designer 4. Contractor Progressive Design-Build Growing in popularity amongst owners & practitioners Design to budget Distinction begins during procurement (owner will often select based on design-builder s qualifications Qualification based selection allows owner to invest in project vs. lengthy and costly procurement approach. (One-Step Approach) Approach leverages benefits of DB and Construction Management at Risk (CMAR) Preconstruction services allow construction input into design effort Fosters maximum collaborative relationship between owner, engineer & builder Results in a more cost effective design from the construction Point of View 4

27 Partnering Program Charter Team Partnering is a structured process which two or more organizations, also known as the Project Team, collaborate together to create a high performing team by: Qualification Based Selection Shortlist Based on Written Technical & Qualifications Submission Only Oral Interview occurs after Short List Qualifications evaluation scored based on: Written Technical & Qualifications Team Qualifications Key Personnel Experience Previous Similar Project Experience Design Management Approach Project Management Approach Oral Interviews (Scenario based interview) Cost evaluation scored based on: Programming Services (Lump Sum) Design Builder Management Cost (Lump Sum) Overhead and Profit Fee (Percentage of Trade Packages Bid) 5

28 Cost Evaluation For Procurement EXAMPLE COST CALCULATION Assume 200 Points Awarded for Cost Provided in Proposal by Design Builder D/B Team 1 D/B Team 2 Programming Service (Lump Sum) $1,000,000 $1,500,000 Design Builder Management Cost (Lump Sum) $12,000,000 $15,000,000 Overhead & Profit Fee (Percentage of Trade Packages) 5% 7% Estimated by Airport for Calculation & Evaluation Purposes. This information is included in the RFQ/P. Estimated Trade Package Value (Lump Sum) $300,000,000 $300,000,000 Budget for Design Services (Lump Sum) $10,000,000 $10,000,000 Calculated Overhead & Profit based on fee provided in RFP Overhead & Profit Calculated (Lump Sum) $15,000,000 $21,000,000 Total Evaluation Cost (Lump Sum) $338,000,000 $347,500,000 Percent Difference 2.81% Higher Percent of Points to be Awarded 100% 97.19% Point Awarded base on Evaluation Optimization of Time & Cost 6

29 Collaborative Project Delivery Process Pricing In A Progressive Design-Build Guaranteed Maximum Price (GMP) is provided at design completion milestones (30%-60%-90% final) Final GMP for continuation is developed between % design completion Competitive trade contractor bids Transparent open-book approach Lump sum is option if desired In the event owner finds the designbuilder's (LS or GMP) unacceptable, the owner can opt to proceed in a traditional manner Complete flexibility 7

30 Guaranteed Maximum Price (GMP) The GMP is an open book process & transparent to the Owner Components of the GMP Programming Design Services Project Management Design General Conditions Trade Packages Exposure Holds Design Builder Fee (Includes A/E Fee) Design Builder Contingency Align Risk around Trade Packages Pre GMP Changes % % % % % % Data 8

31 14 Projects 100 Average Variance San Diego Community College District s Construction Bond Program 4.5 Change Order Percentage 11 Projects 182 Average Variance San Diego Community College District s Construction Bond Program 7.2 Change Order Percentage 9

32 7 Projects 155 Average Variance San Diego Community College District s Construction Bond Program 10.7 Change Order Percentage Design-Build CM Multi-Prime Design-Bid-Build Projects Average Variance Change Order Percentage 10

33 San Diego Community College District Design/Build Scoring Criteria and Weight District Project Manager/ Representative Architect Responsible for Design of Project Inspector DSA Project Inspector & Lab Contractor Superintendent 11

34 Building the Team = Success of a Project Does the team understand: Its Purpose Does the Team have Proper resources Is there a Plan? Does the Team have the right Skill Set? Are They Motivated? Progressive DB - A Refreshing Approach Timely & cost effective delivery Greater control of the design decisions impacting, scope, quality, cost & schedule Enhanced risk allocation Ability to select preferred equipment, trade contractors and vendors Guaranteed price either using the GMP or LS approach Guaranteed schedule Guaranteed performance Quicker & more cost effective procurement 12

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36 CCFC Regional Workshop Community College Construction Delivery Methods: Options, Obligations and Opportunities Friday, May 5, :00 a.m. 2:00 p.m. Coast CCD State Funding and Delivery Methods Rebekah Cearley Community College Facility Coalition Medhanie Ephrem Long Beach CCD COMMUNITY COLLEGE FACILITY COALITION 1303 J Street, Suite 520 Sacramento, CA Phone (916) Fax (916)

37 Project Delivery Methods Proposition 51 and Beyond Statewide Facility Need Growth Modernization Facilities Needs (2017/18 Five Year Plan) ASF COSTS New Facilities 8,501,000 $8,826,477,000 Modernization 23,366,000 $11,279,991,000 Total 31,867,000 $20,106,468,000 1

38 Proposition 51 November Voters approve a $2 Billion bond to handle this $20 Billion need Governor s Budget $11.7 Million for 9 new start projects Total state funding: $304 Million DOF is changing the timing on our projects Preliminary Plans funded Year 1 Working Drawings funded Year 2 Construction/Equipment funded Year 3 Do delivery methods need to be changed? 2

39 Delivery Methods The primary public sector construction delivery methods: Design-Bid-Build Single prime Multi-prime Design-Build nes/c C_DB_Guidelines.doc ematerials.aspx Lease-Leaseback Design-Bid-Build Design-Bid-Build (DBB) is the most frequently used construction delivery method State-funded DBB Preliminary Plans (Year 1) PWB Approval Working drawings (Year 2) Contracting/ Construction (Year 3) 3

40 Design-Bid-Build Advantages Familiar delivery method Regulations well understood Project is competitively bid Disadvantages Low-bid contractor selection Increases risk of change orders, disputes, and claims Multiple contracts for owner to manage Owner bears majority of risk No collaboration between designer & builder during design Design-Build The Governor s Budget contains the first state-funded Community College DB project. State-funded Design-Build (DB) Performance Criteria (Year 1) PWB Approval Design Build (Year 2) 4

41 Design-Build Advantages Simple and inexpensive procurement process can be completed in a short timeframe Project can be implemented in phases or task orders to save time or keep the project moving Maximizes owner flexibility, involvement and control of the project Disadvantages Cost for construction is not known at the time of initial contract signing Cost is determined through combination of negotiated and competitive processes An effective owner education program may be needed to overcome concerns with final construction cost determination Design-Build lump sum Advantages Lump sum price is known at contract signing Schedule and scope are fixed at contract signing Public acceptance tends to be high Disadvantages Lump sum price may not reflect final project cost Owner involvement is limited once price is established Increased potential for change orders or claims if owner wants changes after contract signing Lengthy and costly process to develop thorough DB procurement documents 5

42 Lease-Leaseback (LLB) The Department of Finance posits that the state cannot fund LLB with bond funds (includes Proposition 51) DOF considers LLB payments as lease payments not construction payments lease payments are not covered in bond language State Funding Options State still prefers DBB The first state-funded Community College DB project Future proposed DB projects: CCCO only considering typical DB at this time (PC/DB) District must show prior successful use of DB (local funds) DOF has requested comparison of anticipated costs DBB vs DB DB must be requested and approved at IPP Department of Finance will not fund LLB with bond DOF says payments are considered lease payments not construction funds (not covered by bonds) 6

43 Questions? 7

44 CCFC Regional Workshop Community College Construction Delivery Methods: Options, Obligations and Opportunities Friday, May 5, :00 a.m. 2:00 p.m. Coast CCD CCFC Update: State Capital Outlay Funding Rebekah Cearley Community College Facility Coalition COMMUNITY COLLEGE FACILITY COALITION 1303 J Street, Suite 520 Sacramento, CA Phone (916) Fax (916)

45 Rebekah Cearley Community College Facility Coalition Passed with 55.2% of the vote 7.5 million yes votes $10 million Yes on 51 campaign Direct voter contact made a difference mailers, social media, television Provides: $2 billion for community college facilities $7 billion for K-12 facilities Vast, bipartisan support Both California Democratic & Republican parties endorsed Governor says he will respect the will of the people in implementing Prop 51 1

46 Community college capital outlay projects funded annually in state budget For Governor proposes to fund five new projects Pasadena City College Armen Sarafain Building Seismic Replacement San Francisco CCD Alemany Center Seismic Upgrade San Francisco CCD Ocean Campus Utility Replacement North Orange CCD Fullerton College Business and Humanities Buildings Modernization El Camino CCD Compton Center Instructional Building 2 Replacement All are Health & Safety 3 Category A, 2 Category C Worth $7.4 million in preliminary plans only Total funding $182 million Contrast budget proposal to Board of Governor s action Spending Plan Approved by BOG May 2016 Spending Plan prioritization: Least Cost to State Health & Safety projects up to 50% available funds The need is great $28 billion (state + local) Five-Year Capital Outlay Plan $10.6 B new facilities $17.4 B modernization 2

47 No changes proposed by Administration for community college capital outlay program Legislative Analyst s Office agrees that the proposal is insufficient to meet need Would take 11 years to administer funds Chancellor s Office asking to fund all 29 projects Will defer unfunded projects to Not currently accepting FPPs for CCFC legislative advocacy Budget subcommittee process Department of Finance accepted additional justification for health and safety projects Information submitted for 11 projects Four projects added for by April Letter: Allan Hancock Fine Arts Complex Long Beach Liberal Arts Campus Multi-Disciplinary Facility Replacement Santa Monica College Math/Science Addition Orange Coast College Language Arts/Social Sciences Building Worth $4.3 m planning Total funding $121.4 m 3

48 CCFC is urging funding for all 29 projects in budget Proposal does not honor BOG process and creates planning challenges Negotiations occurring through budget process If your district has an unfunded project : Contact your state Senator and Assembly Member to request funding in the budget Initial signaling from Legislative members is positive but we need to build pressure! Deferral of Prop 51 implementation does not meet the will of voters DIR proposal to increase compliance with the public works prevailing wage monitoring program (SB 854, 2014) SB 854 created new contractor registration and awarding body noticing requirements (PWC-100) New budget proposal via trailer bill language Goal of increasing contractor registrations to address program s structural imbalance Uses carrot and stick approach Budget requests additional positions: 6 positions to educate awarding bodies 1 attorney to pursue debarments 4

49 Carrot (Relief): Small project exemption: raise threshold of applicability from $1,000 to $15,000 for maintenance, $25,000 for construction Notice to DIR within 30 days of award (not 5) Stick (Compliance): Creates new penalty for awarding bodies $100/day, up to $10,000 Increases penalties for contractors and subs An awarding agency with two violations in 12 months loses state facility funding for one year Would be effective for work performed on/after January 1, 2018 Proposal subject to review in budget process Stakeholders concerned penalties are overly punitive (contractors, awarding agencies) Chair of Assembly Budget Subcommittee on State Administration asked DIR and DOF to work with stakeholders over the next few months to address concerns 5

50 Rebekah Cearley Legislative Advocate Community College Facility Coalition (916)

51 Community College Construction Delivery Methods: Options, Obligations and Opportunities Friday, May 5, 2017 Coast CCD THANK YOU SPEAKERS Layne Arthur Balfour Beatty Construction (909) Rebekah Cearley Community College Facility Coalition (916) Terrance DeGray Cordoba Corporation (562) Brandon Dekker gkkworks (949) Medhanie Ephrem Long Beach CCD (562) Gil Fullen Balfour Beatty Construction (949) Mark Kelley Dannis Woliver Kelley (415) Praful Kulkarni gkkworks (949) Lance Lareau San Diego CCD (619) Carri Matsumoto Rancho Santiago CCD (714) COMMUNITY COLLEGE FACILITY COALITION 1303 J Street, Suite 520 Sacramento, CA Phone (916) Fax (916)