AN OVERVIEW OF DESIGN-BUILD. Presented by: David Umstot, PE, CEM Umstot Project and Facilities Solutions, LLC January 20, 2014

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1 AN OVERVIEW OF DESIGN-BUILD Presented by: David Umstot, PE, CEM Umstot Project and Facilities Solutions, LLC January 20, 2014

2 Design-Build Not a New Concept In California: Multiple statutes govern design-build procurement for public agencies For Community Colleges: Education Code Sections govern process 2014 Umstot Project and Facilities Solutions, Inc. 2

3 Where Is Design-Build Authorized for Public Entities? Source: DBIA 2014 Umstot Project and Facilities Solutions, Inc. 3

4 Why Do Owners Select Design-Build? Allows selection based on price and other factors (Best Value Selection) Fosters greater collaboration between the design team, specialty trade contractors and builder Enables involvement early-on with specialty trade contractors Single source of responsibility Better BIM Coordination Reduced change order experience Improved schedule performance (faster to construction) Perceived reduction of risk 2014 Umstot Project and Facilities Solutions, Inc. 4

5 Design-Build Growth ( Projected) Source: DBIA 2014 Umstot Project and Facilities Solutions, Inc. 5

6 Design-Build Definitions To Understand Best Value Selection Bridging Documents Management Proposal Performance Specification Prescriptive Specifications Qualifications-Based Selection Technical Proposal 1-Step vs. 2-Step Selection 2014 Umstot Project and Facilities Solutions, Inc. 6

7 Best Value Selection The Owner selects the design-builder on the basis of overall best value This includes price and other non-price factors Other factors may include technical expertise, past experience, proposed design, enhanced value relative to other proposals, life cycle cost considerations Typically the Request for Proposal clearly defines how the scoring will be evaluated and on what basis the award will be made 2014 Umstot Project and Facilities Solutions, Inc. 7

8 Bridging Documents The Owner provides a set of design documents prepared by a design team (excluded from the design-build competition) to be used as the basis for project definition Why do Owners do this? Because they feel that it gives them more control over the process. Generally, this is common among Owners just starting to use designbuild. What is my opinion? It makes the project a detail-build rather than design-build. Opportunities are lost as to create value from builder and specialty trade input into the conceptual and schematic design where most of the costs are set with systems selection Umstot Project and Facilities Solutions, Inc. 8

9 Management Proposal The Management Proposal describes how you will manage and execute the project during both design and construction. Oftentimes, a Building Information Modeling Execution plan will be a subset to this proposal. Why is this important? It allows the owner to understand how you will be approaching the project, who will be doing what and why Umstot Project and Facilities Solutions, Inc. 9

10 Performance vs. Prescriptive Specifications Performance Specifications define what the desired intent and performance of the requirements are (e.g., heat and cool the building to beat Title 24 by 25%). Prescriptive Specifications contain very specific requirements that the design-builder is expected to provide as part of the contract (e.g., provide 50-ton York chiller). Owner knows exactly what they will get. Allows for greater flexibility in system selection and potential greater value to owner. Leverages creativity of team Design-builder owns risk of performance Owner owns risk of performance based on specification selection Performance-Based x x x Prescriptive x x 2014 Umstot Project and Facilities Solutions, Inc. 10

11 Qualifications-Based Selection This means that the selection of the design-builder will be based on a review of qualifications, not price. Typical qualifications evaluation criteria include past experience on similar type and size projects, past performance on projects, experience of proposed team personnel, financial capacity 2014 Umstot Project and Facilities Solutions, Inc. 11

12 Technical Proposal The Technical Proposal captures on the elements required by a request for proposal other than price. Typical areas covered in the technical proposal include Past Firm, Team and Project Experience Proposed Team and Resumes Proposed Design Approach or Design Life Cycle Cost Analysis Considerations Management Plan Schedule Elements Safety Approach or Plan Quality Assurance Project Plan 2014 Umstot Project and Facilities Solutions, Inc. 12

13 Single Versus 2-Step Selection Process In a 1-step selection process, the design-builder is selected on the basis of the proposal submitted. In a 2-step process, firms are requested to submit qualification packages for review and a short list of qualified firms is developed to actually propose with a more fully developed design and price. This is often done as a design competition with price considerations a best value selection Umstot Project and Facilities Solutions, Inc. 13

14 Understanding the Different Project Delivery Methods The evolution of project delivery methods: Design-Bid-Build (aka Hard bid and low bid) Construction Management at Risk (CMAR) Design-Assist Design-Build Integrated Project Delivery 2014 Umstot Project and Facilities Solutions, Inc. 14

15 Design-Bid-Build The owner is under separate contracts with the Architect to provide design services and a Builder to construct the project according to a prescriptive set of construction documents including drawings, specifications and in more recent times Building Information Model. Perceived advantages by owner: Control over design Lowest first cost Owners that use this typically are required to by public laws or organizational policies Under the Spearin Doctrine, the owner is responsible for the accuracy and completeness of construction documents Disadvantages include increased change orders, claims, coordination problems, schedule delays, and litigation 2014 Umstot Project and Facilities Solutions, Inc. 15

16 Construction Management at Risk The owner is under separate contracts with the Architect to provide design services and a Builder to provide Construction Management/GC services. Perceived advantages by owner: Control over design Pre-construction services from CM/GC for estimating, constructability review, scope gaps or doubling up Typically price is set at completion of design; CM/GC may or may not buy out trade packages Often contract is structured with Guaranteed maximum price Owner typically controls project contingency 2014 Umstot Project and Facilities Solutions, Inc. 16

17 Design-Assist Similar to CM at Risk, but Builder and select specialty trade contractors may be under contract to provide design assistance in evaluation and selection of systems Specialty trades may include: MEP Fire Protection Foundation Structural steel Structural concrete Glazing Skin Advantages: Better value with systems selection improving building performance, cost analysis and constructability; also typically results in lower change order rates and improved schedule performance Challenges: Specialty trades often are more concerned with detailing than system selection; CM needs to manage that process 2014 Umstot Project and Facilities Solutions, Inc. 17

18 Integrated Project Delivery Owner, Architect and Builder enter into a tri-partite agreement that shares risk and reward Select specialty trade contractors and select design consultants may also participate via a multi-partite agreement Typically structured with a target cost in open book form where all parties are guaranteed to recover their costs, but all profit is at risk Savings below the target cost are pooled into an incentive pool that is shared among the agreement signers according to some pre-determined formula Advantages: Enhanced collaboration; project-centric decision-making; value driven into the project Most common in healthcare industry at this point in time Reference: Umstot Project and Facilities Solutions, Inc. 18

19 Design-Build Versus Design-Bid-Build 2014 Umstot Project and Facilities Solutions, Inc. 19

20 Design-Build Versus Design-Bid-Build 2014 Umstot Project and Facilities Solutions, Inc. 20

21 Design-Build Versus Design-Bid-Build Courtesy of The Opus Group 2014 Umstot Project and Facilities Solutions, Inc. 21

22 Project Evaluation What Questions to Ask? Is this project consistent with our core business plan and market? Have we done this type of work before? Do we have the right experience? Do we have the right resources to pursue this at this time? Do we have the right partners for this type of project? How much will this pursuit cost? How will the selection be made? How sophisticated is this owner? Do they know what they are doing? 2014 Umstot Project and Facilities Solutions, Inc. 22

23 Project Evaluation Assembling the Right Team Do you have an established relationship with the right architect and specialty trades for this type of project? What is your past relationship with the owner and your team members? Have your team members completed a design-build project in the past? With your firm? Is the team chemistry right? What is the level of BIM experience of the team members? Who will lead the BIM effort during design and construction? How will you collaborate? Big Room? 2014 Umstot Project and Facilities Solutions, Inc. 23

24 Project Evaluation More Questions to Ask Do you know what is important to your customer? How will you define the value proposition? How do you separate yourself from your competition? What are the differentiators? Why do you believe you are the best team for this project? How will you communicate this in your proposal and in an interview? 2014 Umstot Project and Facilities Solutions, Inc. 24

25 The Big 3 Design-Build Complaints from the Design Community 1. The Cost of Pursuit Beware the RFP that requires a hard price as part of the proposal. This necessitates significant design investment that places a disproportionate share of financial burden on the design firms. 2. Diminished Design Excellence Many architects have a sense that design excellence is potentially diminished when their contractual relationship is with the builder not the owner. 3. Qualifications-Based Selection Fully evaluate the selection criteria before moving forward. Some selections are made on the basis of personality and not qualifications. Understand how your customer views this and structures their selection process Umstot Project and Facilities Solutions, Inc. 25

26 You have decided to pursue the project. Now what? Leading the Proposal Process Fully review RFP and its requirements Clearly define roles and responsibilities among the design-build team members Clearly identify who will be leading the collaboration Clearly assign tasks to address each of the RFP requirements with a responsible champion Establish timelines for submittals of material with enough time to review and integrate Make proposal visually appealing; reviewers like graphics that convey your ideas vs words Keep the proposal as succinct as you can Perform quality control check of the proposal for completeness and accuracy prior to print 2014 Umstot Project and Facilities Solutions, Inc. 26

27 You Made it to the Interview Now What? Decide who will be participating in the interview and why. If someone does not have a speaking role, consider whether they need to participate. Make certain you bring the team that will be actually performing the work. Owners want to evaluate who they will be working with. Clearly focus the message you want to convey in the interview. Practice the interview until everyone is comfortable and the message is crisp and clear Umstot Project and Facilities Solutions, Inc. 27

28 You Made it to the Interview Now What? Practice handoffs and transitions in the presentation. Make it appear seamless and collaborative in nature. Compile a list of anticipated interview questions. Develop a mock Question and Answer session based on these questions. Practice until everyone on the interview team is comfortable. Relax and be yourself Umstot Project and Facilities Solutions, Inc. 28

29 You Won the Project Now Execute (Design) Validate the project requirements with the owner and owner interest groups Integrate key specialty trade contractors into the design process at the right time Validate the cost model is sustained as the design evolves; contemporaneous estimating is best Consider Total Cost of Ownership Don t be surprised Leverage BIM Enhance value to the owner 2014 Umstot Project and Facilities Solutions, Inc. 29

30 You Won the Project Now Execute (Build) Take advantage of an early start. Owners expect this as a design-build benefit. The owner expects you to cover costs associated with any changes that the owner did not request or due to unforeseen conditions beyond your control. Continue collaboration. Communicate frequently and effectively with the entire project team. Deliver what your promise. Use pull planning Umstot Project and Facilities Solutions, Inc. 30

31 Design-Build Institute of America (DBIA) DBIA offers certification in design-build project delivery to members and nonmembers alike, our program educates owners as well as designers and builders on team-centered approaches to design and construction. Owners want successfully executed design-build projects and are looking for a demonstration of both relevant continuing education and experience both of which can be gained through DBIA certification Umstot Project and Facilities Solutions, Inc. 31

32 DBIA Design-Build Manual of Practice The Design-Build Manual of Practice is a comprehensive reference manual, which covers all aspects of designbuild project delivery for owners and practitioners. This guidebook is free for DBIA members and contains procedural guidance and best practices recommendations Umstot Project and Facilities Solutions, Inc. 32

33 Design-Build Done Right Best Design-Build Practices Download free at Umstot Project and Facilities Solutions, Inc. 33

34 DBIA Certification DBIA Certification guarantees that we all work together understanding our roles in project delivery. It lets us leave silo thinking and the old us versus them mentality behind. Instead we can embrace in action the principles of an integrated team. Successful projects are born from high-functioning performance teams. There is no other way to succeed. Pat Nemeth, Vice President, Sharp Healthcare 2014 Umstot Project and Facilities Solutions, Inc. 34

35 DBIA Certification Core Courses DBIA's four "core courses" are the cornerstone of its educational program. 1. Fundamentals of Project Delivery. This course provides a general overview of the attributes of all the major project delivery systems, procurement methodologies and contracting 2. Principles of Design-Build Project Delivery. This course addresses the use of design-build as a project delivery method, focusing on essential concepts and characteristics, as well as critical elements of the RFQ/RFP process and overall project management. 3. Design-Build Contracts and Risk Management. This course focuses on applying effective contracting language as well as insurance, bonding and surety products and strategies to successful design-build project delivery. 4. Post-Award Design-Build. This course addresses the use of design-build as a project delivery method, focusing on essential concepts and characteristics, as well as critical elements of the RFQ/RFP process and overall project management Umstot Project and Facilities Solutions, Inc. 35

36 Tips for Success from a Former Owner Respond to all Elements of the RFP. Collaborate! Really collaborate!!! Validate the owner s published requirements. Understand what constitutes value for the owner and the various owner interest groups. Make design decisions at the appropriate time. Integrate specialty trade contractors early in the process. Leverage BIM. Use The Last Planner System. Deliver what you promised! Finish sharply Umstot Project and Facilities Solutions, Inc. 36

37 Contact Information: David Umstot, PE, CEM President, Umstot Project and Facilities Solutions, LLC Senior Vice President, DBIA Western Pacific Region LCI San Diego CoP Core Group Member (O) (M) 2014 Umstot Project and Facilities Solutions, Inc. 37