Progressive Design Build

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Jack French
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1 Progressive Design Build July 19, 2018 Ash Dhingra P.E.,S.E

2 TRADITIONAL PROCUREMENT Design-Bid-Build (DBB) Design to 100%, procurement (bid), and construction proceed sequentially Construction contract awarded to lowest bidder based on completed plans and specifications Designer Owner Contractor Subcontractors Designer and Contractor are two separate entities Owner holds separate contracts with each

3 DRAWBACKS OF TRADITIONAL DELIVERY Owner holds all contracts Owner in the middle of all disputes Low bid can lead to contentious environment or low quality Harder to attract qualified bidders in tight construction market

4 ALTERNATIVE DELIVERY Also known as integrated project delivery Design-Build (DB) Design-Builder is both engineer and general contractor Typically design to 60% and begin construction Contract pricing is set very early in project Owner Design-Builder Subcontractors Owner holds single contract with one entity responsible for design and construction Designer and Contractor are one contractual entity

5 WHY DESIGN-BUILD? Single point of responsibility Eliminates conflict between designer and contractor DB entity responsible for performance guarantees Simpler and shorter best value procurement process Encourages innovation in design and construction Control of final construction cost, known upfront

6 OWNER GETS OUT OF THE MIDDLE One Entity Guarantees Price Schedule Quality Performance Cost Savings Benefits of true integration Less design Less construction administration

7 MULTIPLE VARIATIONS OF DESIGN/BUILD Design Build Lump Sum/ Bid 2 Step/ Phased/ GMP/ Progressive

COMPARING SEQUENCE OF A DBB VS DB PROJECT DBB Design Bid &

design completion and Bid True Construction Cost Unknown until

Procurement Design Guaranteed Maximum Price (GMP) Fixed Early

8 COMPARING SEQUENCE OF A DBB VS DB PROJECT DBB Design Bid & Award Construction Construction Bid Price Unknown Until full design completion and Bid True Construction Cost Unknown until change orders done and warranty issues resolved DB Pre-Design & Procurement Design Guaranteed Maximum Price (GMP) Fixed Early during early design development Construction (begins as soon as GMP Fixed)

9 KEY FEATURES - PROGRESSIVE DESIGN BUILD Planned early communication of schedule and budget restraints Design to Price approach set a firm budget for GMP. Off-Ramp available to change to Design-Bid-Build 3 rd party Owner s Advisor

10 ROLE OF A PROGRAM MANAGER Impartial Expert Technical Advisor Complete Project Overview

11 TWO STEP SELECTION PROCESS In accordance with Assembly Bill 642 RFQ RFP Selection Criteria Best Value Refinement of Scope of Work Best and Final Offer

12 SELECTION PROCESS FOR BEST DESIGN-BUILDER STEP 1 STEP 2 Release Request for Qualifications Receive Statement of Qualifications (SOQ) Review and Evaluate SOQ s Interview Design-Builder Shortlist Design=Builders to Receive Request for Proposals Release Request for Proposals Receive Proposals Review and Evaluate Proposals Interview Design Builders Select Design Builder and Recommend for Contract Award

13 Progressive Design-Build (PDB) PDB relies on a collaboration between the Owner and Design-Builder with constant communications Risks associated with the project are defined, assigned and controlled by the party having most control on that risk, some may be mutually shared A Risk register is created for the project Design-Builder bids project in packages to subcontractors or by trade and similarly bids for equipment from suppliers Owner Design/Builder Subcontractors

14 ADVANTAGES OF PROGRESSIVE DESIGN-BUILD 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

15 PROGRESSIVE DESIGN-BUILD BENEFITS TO OWNER Allows more effective owner input into the scope, features, and operational aspects of the design. Shorter procurement process. Potential for more bids. Flexibility to complete work design to budget based on (available funding). Better chance of adhering designing to budget. OTHER CONSIDERATIONS Cost and schedule for construction are not fixed at the time of initial contract signing. Procurement of long-lead equipment will be delayed until GMP agreement.

16 PDB EXPEDITES SCHEDULE How does it happen? Early equipment selection Designing around specifics Early work packages Procuring while designing Integrated team (design, construction and operations) Reduced conflicts and interferences Early stakeholder involvement Owning the schedule

17 DESIGN BUILDER BIDS PACKAGES Clear & Grubbing and Mass Grading of Site Long lead equipment packages Pipelines Concrete and Rebar Mechanical and equipment Electrical and Instrumentation & Controls Civil and Sitework, fencing etc. Buildings Landscaping Other Specialty Work

18 WHAT S IN A GUARANTEED MAXIMUM PRICE(GMP)? GMP is open book completely accessible to Owner Design Engineering Services to develop design to 60% level to develop a GMP Phase I Design Engineering Services to complete design to 100% and Engineering Services during construction Subcontracted work and equipment packages including long lead time items Project and Construction Management & Supervision, QC General Conditions based on construction duration Contingency & escalation to mid point of construction

19 GUARANTEED MAXIMUM PRICE DELIVERY METHOD Owner Constructor Architect/Engineer Overruns Allocation Constructor e.g. 90% Cost Savings A/E e.g. 10% Cost Overruns While the owner keeps most of the savings, a portion is reserved for the design-build team as an incentive. Savings Allocation If the DB actors share the overruns, an upper limit normally exists for the A/E s cost liability.

20 SUMMARY Progressive Design-Build was recommended Single point of responsibility Promotes greatest level of innovation with the schedule benefits of design-build Greater staff involvement in process and equipment selection as well as operational controls Control of budget and collaboration to achieve best value

RECENT WATER DESIGN BUILD COUNCIL MARKET STUDY The median schedule growth after contract award for DB projects is half as large as the schedule growth for DBB projects DB projects finish on or below

21 RECENT WATER DESIGN BUILD COUNCIL MARKET STUDY The median schedule growth after contract award for DB projects is half as large as the schedule growth for DBB projects DB projects finish on or below contract price twice as often as DBB projects Contracts using guaranteed maximum prices (GMPs) are more likely to have no schedule or cost growth as compared to projects with lump-sum contracts There is no significant difference in constructed quality between design-build and design-bid-build projects For more information:

Procurement Documents for Progressive Design-Build Projects

Procurement Documents for Progressive Design-Build Projects March 22, 2013 John Awezec, P.E., DBIA HDR Engineering, Inc. John Doller, P.E. Carollo Engineers, Inc. Peter Hughes Executive Director WDBC Model