Alternative Project Delivery for America s Water Infrastructure
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1 Alternative Project Delivery for America s Water Infrastructure Cal Rozario PMP Design-Build Chief Engineer HDR Water & Natural Resources Business Group
2 TOPICS Traditional Project Delivery Brief History of Project Delivery APD Methods in W/WW Ohio State Statutes Ohio Currently Under Consideration Ohio DB Procurement Resources for Learning Discussion
3 TRADITIONAL PROJECT DELIVERY Contract & Communication Lines OWNER DESIGN PROFESSIONAL GENERAL CONTRACTOR CONTRACT COMMUNICATION TRADE SUBCONTRACTORS EQUIPMENT SUPPLIERS
4 PROJECT DELIVERY A Brief History Master Builder Concept 1400 Filippo Brunelleschi
5 Filippo Brunelleschi ( ) Master Builder architect, engineer, general contractor Designed and built the Dome of Santa Maria del Fiore in Florence, Italy The first octagonal dome to be built without a wooden supporting frame
6 PROJECT DELIVERY A Brief History Master Builder Concept 1400 Filippo Brunelleschi Segregated Services Model 1450 Leon Battista Alberti
7 Leon Battista Alberti ( ) Modern-day Architect Began the separation of the art of the design and the craft of the building Directed the construction of the façade on the Santa Maria Novella church in Florence, Italy With drawings and models, not directly supervising the work
8 PROJECT DELIVERY A Brief History Master Builder Concept 1400 Filippo Brunelleschi Segregated Services Model 1450 Early 1700 s Leon Battista Alberti Industrial Revolution added project complexity Specialization of Services
9 INDUSTRIAL REVOLUTION Further separation between design and construction Cities expanded, people moved from rural to urban housing More need for specialized design and construction expertise
10 SPECIALIZATION TIMELINE 1852 ASCE American Society of Civil Engineers 1857 AIA American Institute of Architects 1918 AGC Associated General Contractors 1948 CSI Construction Specifications Institute ABC Associated Builders & Contractors 1950 ASA American Subcontractors Association 1956 AIC American Institute of Constructors 1971 CMAA Construction Management Association of America 1982
11 PROJECT DELIVERY A Brief History Master Builder Concept 1400 Filippo Brunelleschi Segregated Services Model 1450 Early 1700 s Leon Battista Alberti Industrial Revolution added project complexity Miller Act Specialization of Services? E&C collaboration & communication
12 PROJECT DELIVERY A Brief History Why is July 17, 1981 significant for the E&C industry? Kansas City Hyatt Regency Walkway Collapse
13 PROJECT DELIVERY A Brief History Miller Act KC Hyatt DBIA Formed 1993 AD Methods Emerge The day after, open E&C communications ended Traditional delivery became contentious Owner becomes a mediator One positive result AD Methods emerge
14 ALTERNATIVE DELIVERY Market Trends Value, $Billions CMAR Revenues DB Revenues Future Projection SOURCE: ENR, June 2012
15 ALTERNATIVE DELIVERY Owners Satisfaction Survey LEVEL OF SATISFACTION Owner Involvement in Design Quality of Completed Project Overall Experience Communication Transition to Operation Risk Distribution SOURCE: Water-Design Build Council, 2012
16 ALTERNATIVE DELIVERY Owner Drivers Why are clients using AD? Achieve the benefits from team integration Essentially, the benefit of sharing experience and knowledge Delivering best value means focusing on key Design-Build interfaces: Design / Cost Design / Value Design / Construct Design / Performance
17 ALTERNATIVE DELIVERY Owner Drivers Desire for greater role in project execution Another project delivery tool Owner demographics are changing
18 ALTERNATIVE DELIVERY Owner Drivers Simply, Owners are seeking better and faster ways to deliver capital projects with less hassle
19 PREVALENT AD METHODS for America s Water Infrastructure Design/Construction Management At-Risk Design-Build and its variation Traditional (Lump Sum) Design-Build Progressive Design-Build Design-Build-Operate Design-Build-Finance-Operate Design-Build-Own-Operate-Transfer
20 RISK SPECTRUM vs. AD MODEL DBB D/CMAR DB DBO DBFO DBOOT Increasing Owner Shift or Sharing of Risk and Control
21 TRADITIONAL (LS) DESIGN-BUILD Contract & Communication Lines OWNER CONTROL RISK DESIGN-BUILDER CONTRACT COMMUNICATION TRADE SUBCONTRACTORS EQUIPMENT SUPPLIERS
22 TRADITIONAL DESIGN-BUILD Approach Select Owner s Rep. Define Project Concepts & Criteria Produce Contract Doc s & RFQ/RFP Prepare & Submit Proposal Review & Recommend Selection Accept Project Final Design, Construction & QC Select Design- Builder OWNER OWNER S REP DESIGN-BUILDER Review Submittals Conduct Field QA Pay Estimates RFIs
23 TRADITIONAL DESIGN-BUILD Best Applications/Disadvantages BEST APPLICATIONS DISADVANTAGES Well defined project scope Owner doesn t require direct project involvement Well defined operational requirements Conventional technology Owner has APD experience Added time & cost to develop procurement Design Criteria Owner involvement limited once price is established Change orders likely if Owner wants design changes after pricing Lump sum price may not reflect final project cost
24 PROGRESSIVE DESIGN-BUILD Contract & Communication Lines OWNER CONTROL RISK DESIGN-BUILDER CONTRACT COMMUNICATION TRADE SUBCONTRACTORS EQUIPMENT SUPPLIERS
25 PROGRESSIVE DESIGN-BUILD Approach Cost Estimating, Value Engineering, Constructability Reviews Set Target Price Check Budget Check Budget Select Design-Builder Design to 30% Design to 60% Finish Design Long Lead Items Early Start Items Accept Project Construction by Design-Builder Approve GMP Competitively Bid & Submit GMP OWNER OWNER & DB DESIGN-BUILDER
26 DBB vs. P-DB Design Sequence Comparison Set CIP Budget Select Designer Design to 30% Design to 60% DBB DESIGN Final Design Competitively Bid to Contracting Community Set Target Price Select Design- Builder Design to 30% Design to 60% Finish Design Competitively Bid & Submit GMP P-DB DESIGN
27 PROGRESSIVE DESIGN-BUILD Best Applications/Disadvantages BEST APPLICATIONS DISADVANTAGES QBS speeds project start Owner has technology & equipment preferences Owner desires high degree of involvement in delivery Complex scopes more easily accommodated Owner desires a single point of responsibility Off-ramps are available Firm price set later Owner uncertainty with GMP approach, negotiation New delivery method means educating stakeholders Construction QA/QC approach is different
28 OHIO STATE STATUTES Authorized to Use Design-Build Signed June 30, 2011; effective September 30, 2011 State Agencies State Institutions of Higher Education Counties Townships Municipal Corporations School Districts Other Political Subdivisions
29 OHIO Definitions What are Design-Build Services? Services that form an integrated delivery system for which a person is responsible to a public authority for both the design and construction, demolition, alteration, repair, or reconstruction of a public improvement. Who is a Construction Manager At Risk? A person with substantial discretion and authority to plan, coordinate, manage, direct, and construct all phases of a project for the construction, demolition, alteration, repair, or reconstruction of any public building, structure, or other improvement and who provides the public authority a guaranteed maximum price
30 OHIO Design-Build Services Steps for procurement 1. Pre-design Phase 2. Request for Qualifications published 3. Qualifications-Based Selection 4. Best Value Selection 5. Interview Phase/Short-listing 6. Technical Proposal (scope clarification meeting) 7. Contract Negotiations
31 OHIO Request for Qualifications Request for Qualifications includes: A general description of the project The project delivery method A statement of the specific professional design services or design-build services required A description of the qualifications required for the project, including the EDGE (Encouraging Diversity, Growth, and Equity business development program) participation goal Criteria by which submissions will be evaluated
32 OHIO Design-Build Services Request for Qualifications indicates: How qualified professional design firms or design-build firms may submit a statement of qualifications to be considered for a contract to perform the required services for the project Request for Qualifications identifies: A process for submitting written questions regarding the project
33 OHIO HOUSE BILLS Currently Under Consideration HB 35 (Introduced February 5, 2013 PASSED HOUSE) Makes appropriations for programs related to transportation and public safety for the biennium beginning July and ending June Provides authorization and conditions for the operation of those programs
34 OHIO HOUSE BILLS Recently Signed Into Law HB 51 (Introduced February 12, 2013 PASSED HOUSE & SENATE) Designates qualifications to be considered design-bill among other things
35 RESOURCES For Learning About W/WW DB Delivery Design Build Institute of America General information on Alternative Delivery Owner Resources Owner s Council Thought Leaders Industry research and reports Design-Build Manual of Practice Standard Form DB Contract Documents
36 RESOURCES For Learning About W/WW DB Delivery Water Design-Build Council The Municipal Water and Wastewater Design-Build Handbook, 2 nd Edition water-design-build-handbook
37 RESOURCES For Learning About W/WW DB Delivery Model Procurement Documents Procurement guide for Progressive Design-Build project delivery Single Step Procurements Model RFQ Model RFP Two Step Procurements Model RFQ (step one) Model RFP (step two)
38 IN CLOSING Is this correct? Design Professional + Builder = Integrated Design-Builder Design Professional + Builder + Design-Builder Mentality = Integrated Design-Builder
39 IN CLOSING Learn from your mistakes and build on your successes. John C. Calhoun Vice President, under Adams and Jackson
40 DISCUSSION
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