Alternative Project Delivery Methods (APDM) Valley Schools Management Group

Transcription

1 Alternative Project Delivery Methods (APDM) Valley Schools Management Group

2 Introduction Bill Munch Tim O Brien Ken Carter David Cantelme Skip Brown [email protected] (602) [email protected] (602) [email protected] (866) [email protected] (602) [email protected] (602)

3 Alternate Procurement Delivery Methods (APDM) Harder to find resources Ever increasing accountability Unexpected latitude in contracting Design Build CM at Risk Job Order Contracting Pre-qualified Contractors New design services selection rules Advertising requirements 3

4 Class Agenda Project Management and Alternative Project Delivery Methods 1. Identify the project 2. Acquire design professionals 3. Determine the most effective procurement process 4. The Request for Qualifications 5. Selection Process 6. Award 7. Control 8. Reporting 9. Case Study 4

5 Determine Process APDM Process Project Need Identified Funding Identified Capital Improvement Plan Emerging Ideas Legal/Emergency Bond/Override SFB Adjacent Ways Acquire Design Professional RFQ Publish and Award GC Architects Other Professionals Pre Construction Services develop GMP Award if in budget Bid if not in budget 5

6 APDM Choices Are Like Tools in Your Tool Chest (know how to use em) Size and scope of job Resources available Time Staff Funding Expertise available District Architect Firm PM 6

7 Procurement of Specified Professional Services (R ) Who are professionals? Single or multiple contracts Notice (R ) Amounts (R ) Procurement file requirements On-line help 7

8 Contracting Methods Design Bid Build Design Build Cooperative purchasing/state Contract Construction Manager at Risk Select Bidders List Job Order Contracting 8

9 Design Bid - Build Invitation for Bid Award to lowest responsive & responsible bidder Used in jobs with simple, easily measured specs PRO Well known and understood Emphasizes head-on competition CON Tight bid specs difficult to write/evaluate Low bidder may try to make money thru change orders Prone to protest 9

10 Design Build RFQ committee selects contractor by quality Selected contractor provides both design and construction services Award construction contract only if GC s bid fits within the district s budget PRO Qualification based selection Reduced finger pointing by the service provider, Single point of contact for project delivery Potential for continuous value engineering and feedback system CON Potential for ill-defined scope of the work. Potential for decreased accountability Potential that a less qualified owner may not have the expertise to evaluate the work the contractor has performed 10

11 Cooperative purchasing/state Contract Find appropriate services on a cooperative purchasing agreement Place your order (purchase order is the contract) PRO Reduced administration Faster response time CON Potential for increased cost Small number of contractors Lose the benefit of competition 11

12 Construction Manager at Risk Most prevalent method of construction contracting in schools today R Procurement of Construction Using Alternative Project Delivery Methods Very popular many districts have adopted this method as their standard Introduces quality up front, but behaves much like a typical design bid build project after award of GMP 12

13 Construction Manager at Risk RFQ committee selects pre-construction GC by quality Award construction contract only if GC s Guaranteed Maximum Price fits within the district s budget PRO Qualification based selection Encourages teamwork among owner, architect and GC Preconstruction services by GC and subcontractors reduce or eliminate change orders On-going value engineering helps contain costs and maximize build- ability CON May be more expensive than traditional procurement Owner must stay engaged 13

14 Construction Manager at Risk Pre Construction Services You pay for this (typically around 1% of projected construction costs) GC and subcontractor review design/approach Subcontractor list Continuous Value Engineering Develop alternatives Establish prior approvals Develop Guaranteed Maximum Price (GMP) Schedule of values Allowances Fees General Conditions 14

15 Qualified Select Bidders List RFQ committee reviews to determine short list Select 3-5 GC s by qualification based selection Invitation for Bid to pre-qualified bidders only Rest of the process similar to hard bid Award to lowest responsive & responsible bidder PRO Qualification based selection Bid process familiar and well understood Emphasizes head-on competition CON Fewer bidders may reduce competition Selected GC s may not feel the pressure to make lowest possible bid 15

16 Job Order Contracting Select a Job Order Contractor by quality Award construction contract based on an agreed unit price determination (e.g., RS Means and/or Unit Price Book) PRO Responsive to district needs Known quality contractor (depends on your good will for continued business) CON Unit price techniques may be more expensive than traditional bidding Need Board approval for project in excess of $1M 16

17 Paperwork Procurement File Contents (R ) If no interviews were held If interviews were held In what order should the contents of the file be? Debriefing unsuccessful responders Is it required? Is it smart? What are some effective techniques? 17

18 Once You Have Identified the Project Overview and scope of a project Funding Sources Choosing Delivery Method Control Points Notes and Discussion Review of Important Terms 18

19 Develop a Capital Plan Strategy (Vision) Funding Estimates Change in population Growth Decline New Construction Scheduled Maintenance Programs (life cycle) Boundary changes School Closings (gasp) Grade reconfiguration New programs (gifted, traditional, magnet) Community agreements 19

20 What is a Capital Plan? Forecast of capital needs (needs assessment) Search for and Identify All needs and wants Use multiple sources No filtering yet Prioritize needs Health/Safety Projects to avoid large, catastrophic losses Bond imperatives (pamphlet, promises) Essential projects Projects identified as valid need 20

21 What is a Capital Plan? Sort list by resources Funds Time Sort list by Facilities based on SFB PM areas Pupil Transportation Safety/Security Furniture Fixtures and Equipment Technology Curriculum 21

22 Phases of a Project Project initiation stage Project planning and design stage Project execution stage Project completion/closeout stage 22

23 Phases of a Project Project initiation stage Identify project CIP or Needs Assessment Emergency Emerging opportunities (good ideas) Identify a Funding source Procure a design professional Determine what project delivery method is best Description/Scope Purpose of the project Resources available Money Time Establish initial budget estimate 23

24 Overview of a Project Project planning and design stage Collaborate with stakeholders Procure Construction Services (Alt Proj Del Means) Develop specifications Wants Needs Sacred Cows Develop design documents Layouts Standards (e.g., flush valves, toilets, HVAC, sole source, etc.) Refine estimated project budget Request and receive permits Procure Construction Services (Traditional Means) 24

25 Overview of a Project Project execution stage Financial Control Measures Notice to proceed Pay applications Retainage Documentation Control Measures Meeting minutes/notes Measuring the ongoing project activities (where we are) Week in review and three week look ahead Documenting issues Monitoring the project cost against the project baseline (where we should be) Change Control Measures Request for information (RFI, DIR, etc.) Change Order Request ~> Change Order Allowance Use Request ~> Allowance Use Authorization 25

26 Overview of a Project Project completion/closeout stage Documentation Warranty work tracking 26

27 Funding Sources Bond Adjacent Ways Capital Override Capital SFB new construction Building Renewal Grant Other Grants Gifts & Donations 27

28 Adjacent Ways, ARS Adjacent ways is a special property tax assessment Funds from adjacent ways may be used to construct, maintain or improve any public way adjacent to land owned by the school district sidewalks sewers utility lines roadways and other related improvements A school district shall not use adjacent ways funds for construction, maintenance or other improvements to the school district's property except Improvements necessary to assure the safe ingress and egress for buses and fire equipment. 28

29 Okay, CMAR is our choice, now what? List reasons APDM selected (R ) Issue RFQ (R ) Do we have to advertise? (R ) Pre proposal conference Changes Committee evaluation Negotiations & Notifications Award Preconstruction Services Guaranteed Maximum Price (GMP) 29

30 Project Control Points Project initiation stage Project identification/scope/budget Procuring Design Professional Project planning and design stage Choosing a delivery method/gc Project execution stage Contract/PO/Notice to proceed Approval for Change Orders and Use of Allowance Payment Requests Project completion/closeout stage Substantial/Final Completion release of retention Punch List Establish warranty date 30

31 When Should the District Superintendent Get Involved? Ground Breaking and Ribbon Cutting Initial Planning Priority Resources (time, people and funding) Educational mandate/philosophy Before any issue or decision is brought before the Governing Board GMP/PO/Contract Change Orders Before any substantive change to the project is made Bad news, unlike fine wine, does not get better with age 31

32 Notes and Discussion Match talent with project bigger firms may not be better on smaller projects The team is like a three legged stool General Contractor Design Professional Owner Another three legged stool Cost Schedule Quality Procurement by the numbers. Short cuts cost money and time 32

33 Notes and Discussion Notice to Proceed Contract Bonds Insurance Absolutely no work, mobilization or supplies before Notice to Proceed Pre Lien Notices Public property cannot be liened Lien releases & pre-lien notices provide info of subcontract amount 33

34 Notes and Discussion Who Do You Deal With? Contract is with the GC not sub contractors Dealing directly with subs can encourage change orders, add cost and let GC off the hook Deal through the team (PM, Contract Administrator architect, Weekly meetings Meetings: Architects take notes Contractor updates master schedule and provides three week look ahead Review a pencil version of a payment request a week before submission Discuss AUR s, AUA s, RFI s, COR, etc. 34

35 Notes and Discussion Timely Payment essential Lien releases - Lien releases & pre-lien notices provide info of subcontract amount Withholding Payment the ultimate hammer Affect only sub/division responsible Adjust individual lines on schedule of values Notify GC via Architect of deficiency and that payment was reduced to compensate 35

36 Review of Important Terms VE Schedule of Values GMP General Conditions Allowance Over head and Profit Retention Buy out Adjacent Ways/off sites Pre Lien Notice Lien Release RFI & ASI AUR & AUA COR & CO PR CofO & Temp CofO Substantial Completion Final Completion Punch list 36

37 Forms Notice to Proceed Request information/documents Respond to requests Requests to change the contract time scope unforeseen conditions Pay Applications Close out documents Substantial Completion Final Completion 37

38 Close out continued Punch list Warranty Documents Manuals Final pay application As builts 38

39 Pay Applications Pencil Copy one week prior (no surprises) Copy signed and notarized verified by architects Retention required by law. 10% for first half May be reduced to 5% if project is progressing satisfactorily Retention may be satisfied with a substitute 1. An assignment of time certificates of deposit 2. Share certificate of a savings and loan institution or credit union 3. Security issued or guaranteed as to principal and interest by federal, state or local government 39

40 Things Important to Understand Vendors are in business to make a profit that s why they are call for profit organizations. A great vendor who goes out of business is an unsuccessful vendor and we are unsuccessful clients. How does money figure in? 40

41 Profit Motive v. Cost Avoidance Max P R O F I T $0 Jul Public Sector Private Sector Oct Jan Apr 41

42 Profit Motive v. Cost Avoidance Contractor has 3 opportunities for profit GMP/Bid/Quote Allowance Change Orders Public has 3 opportunities for cost avoidance Pre contract negotiations Unused allowance Constructive change orders 42

43 Will APDM save you money? Difficult to quantify Open book GC walks in with profit established Some fees difficult to see Selection of subs Detailed Schedule of Values Time = Money Change Order avoidance 43

44 Palomino Elementary Case Study Situation: Palomino Elementary School has over 1,200 K-6 students. The area is growing rapidly, but there is no land to build a new school. There is an undeveloped city park across the street from the school 44

45 Palomino Elementary Case Study Task: New Construction 77,486 sf 2 story (nonprototypical) design on active playground Renovate 62,500 sf existing building (over summer break) Build playground on city park site (IGA) Demolish and remove public roadway Open for school August

46 Time Lines Begin construction Summer 02 Renovation Spring/Summer 03 Close/Demolish 30th Street July 03 Open new schools August 03 46

47 Palomino Elementary Case Study The nature of the project made a good strategy Complexity required pre-construction services Time Design Coordination Operational limitations Budget constraints Unknown issues with renovation Unknown issues with city collaboration 47

48 Palomino Elementary Case Study The project was on time and dramatically under budget because: General Contractor selection based on proven ability Early collaboration Value engineering Very accurate Guaranteed Maximum Price Open book review and GMP Continuous Value Engineering Enhanced trust among team members Partnering reduced General Conditions 48

49 Palomino Elementary Case Study Category Pinnacle Liberty Palomino Procurement DBB DBB Square Ft 80,279 79,434 77,486 Project Bid/GMP $8,352,000 $7,341,560 $8,546,617 Less site work ($1,599,317) ($1,171,611) ($1,791,100) Inflation adj (3%) $ 202,580 $ 185,098 na Less 2d story cost na na ($ 200,000) Less renovation cost na na ($ 579,141) Adjusted const cost $6,955,263 $6,355,047 $5,976,376 Adjusted Cost sq ft $86.64 $80.00 $

50 Alternative Project Delivery Methods A Three legged stool Owner Design Professional Contractor The stool will fail if any leg is too short, wobbly or missing 50

51 Alternative Project Delivery Method What it is Contractor selection based on value Opportunity for reduction of errors Opportunity for time & cost savings What it is NOT A guarantee of success Insurance against fraud, waste or abuse For those who do not want to stay involved 51

52 Stuff you should remember It ain t new. Many school districts have used CMAR and Job Order Contracting successfully for years. Resources are available. The new procurement rules are out and pretty easy to use. Don t cut corners. It doesn t take any longer to do it right than to do it wrong. You are not alone. Help is only a phone call away. 52

53 Stuff You Should Remember All construction issues look pretty much the same once the contractor is selected No construction procurement method is fool proof you must stay involved Owners can help contain costs by: Good communications Comprehensive scope and specifications Clear vision no changes/good ideas 53

54 Keys to Success 1. Reduce/eliminate changes Clear scope of work Pre-construction involvement 2. Enhance team work Business partnership Develop team over time Establish trust 54