What s so Progressive about Progressive Design-Build? Mark Alpert, PE, DBIA CH2MHill & Peter Tunnicliffe, PE, DBIA CDM

Transcription

1 What s so Progressive about Progressive Design-Build? Mark Alpert, PE, DBIA CH2MHill & Peter Tunnicliffe, PE, DBIA CDM

2 Progressive design-build: A better way? Discussion topics: What is progressive design-build? How does it work? Investment in projects, not procurements Schedule advantages Managing project risk as a team Owner Questions to Facilitate Choice of alternate delivery Top ten success strategies for owners

3 Project delivery options Traditional Delivery Alternative Delivery Design-Bid-Build (DBB) Construction Management at Risk (CMAR) Progressive Design-Build (GMP) Lump-Sum Design-Build (LS) Design-Build- Operate/ Finance, etc.

4 Distinguishing design-build delivery options True single contract design-build models offer owners a wide variety of evaluation options, ranging from qualificationsfocused to best value with a lump-sum price Progressive design-build (GMP) Lump-sum design-build (LS) Progressive design-build: Maximum flexibility for owners Lump-sum design-build: Performance-based or Prescriptive

5 Design-build nomenclature Quasi Design-Build: Multiple Entities Design plus CMAR (different engineer and CMAR firm) Design plus Early Contractor Action Design plus GCCM Integrated Delivery Design-Build: One Entity Progressive DB EPCM (Engineer, Procure,Construction) Design-CMAR (same firm) Lump Sum Design Build

6 Progressive design-build: A better way? Key Advantages Investment in projects, not procurements Schedule Progressive estimates address owners challenges Better opportunities for local subcontracting Capital budget management Progressive Design-Build (GMP)

7 Pros and cons of progressive design-build Advantages to Owner Simple, inexpensive, quick procurement process Potential for increased participation Flexibility to complete work based on funding Owner can reject lump sum or GMP without significant project delays Better chance of designing to budget Disadvantages to Owner Construction cost is not known at the time of initial contract signing Cost determined through negotiated and competitive processes May need public education campaign

8 Progressive design-build procurement model Progressive model complies with most state design-build statutes as long as some form of price/cost-related criteria is included in selection Offers owners maximum flexibility/opportunity to collaborate on permitting/ design Owners have an off-ramp in case of permitting issues or if GMP can t be negotiated Very successful evolving model Plan Project RFQ RFP Permits/Design Input Verify DB Performance (Verify) O&M Define Performance Criteria Tech Support Verify GMP Inspection Quals Propose Concept Design/Develop GMP Construction, Startup Warranty Complete Design RFQ defines qualifications criteria; short lists qualified firms Select from qualified firms - selection based on qualifications; may include rates or conceptual/ target price in evaluation LC Agree on GMP - based on collaborative scope and design; pricing may be verified by third party

9 Progressive DB can reduce project complexity and cost... Owner s staff time and additional technical support for procurement Stipends for multiple unsuccessful proposers Industry investment in design for proposal Additional risk included in ultimate project cost (more unknowns = higher contingency) Progressive DB (GMP) Plan Project RFQ RFP Define Performance Criteria $ Lump Sum DB (LS) Tech Support Quals Propose Concept Permits/Design Input Verify GMP Design/Develop GMP Verify DB Performance Inspection Construction, Startup O&M Warranty Complete Design Plan Project RFQ RFP Performance Criteria/Permits/Technical Support $$$$$$+ Quals Design/Price for Proposal Verify DB Performance Verify Design Inspection Complete Deign, Construction, Startup O&M Warranty

10 ... And shorten the procurement schedule Timing: Can procurement process start before all basis of permits are certain? Duration: Does proposal period need to allow time for design/detailed pricing? Potential for delay: How many issues/technical questions might arise? Progressive DB (GMP) Plan Project RFQ RFP Permits/Design Input Verify DB Performance O&M Define Performance Criteria Months Tech Support Quals Propose Concept Verify GMP Design/Develop GMP Inspection Construction, Startup Warranty Complete Design Lump-Sum DB (LS) Plan Project RFQ RFP Performance Criteria/Permits/Technical Support Years+ Quals Design/Price for Proposal Verify DB Performance Verify Design Inspection Complete Deign, Construction, Startup O&M Warranty

11 Schedule comparison: Typical vs. fast-tracked procurement Typical Progressive Design-Build Procurement RFQ: 30 days Shortlist: 30 days RFP: 60 days Evaluate: 30 days Contract: 30+ days Issue RFQ SOQs Submitted Issue Shortlist Submit Proposals Award NTP RFQ Response Period Evaluate Qualifications RFP Response Period Evaluate Proposals Contract RFQ: 15 days Fast-Tracked Progressive Design-Build Procurement Shortlist: 15 days RFP: 30 days Evaluate: 15 days Contract: 30+ days 6 months Issue RFQ SOQs Submitted Issue Shortlist Submit Proposals Award NTP RFQ Response Evaluate RFP Response Evaluate Contract months

12 Lump-sum procurements can drag out RFQ: days Shortlist: 60 days RFP: days Pre-proposal Conference Issue RFQ SOQs Submitted Issue Shortlist Proposals Submitted Project Definition and Planning RFQ Response Period Evaluate Qualifications Environmental Process Conceptual or Preliminary Design Prepare RFQ Prepare RFP Documents RFP Response Period Answer Questions/Issue Amendments Evaluation: days Interview: 30 days Selection: 30 days Final Submittal Contract: days Notice of Award NTP Evaluate Proposals BAFO Response Period Evaluate Final Proposals Contract Negotiations/Conformance Request Clarifications/Responses Lump Sum Design-Build Procurements 1+ years

13 Progressive estimates address owners challenges Construction estimating can start very early in design, allowing comparison of specific technical solutions Progressive estimates keep owners informed and support-informed scope adjustment decisions 0% 15% 30% 60% 100% Level of Design Completion First fully detailed estimate can be used to establish a scope baseline. Estimating process is open book Owners can use third-parties to verify cost and go to the hard-bid market if needed (the off-ramp ) Guaranteed maximum price established at the right time: Risk and contingency reduced, schedule needs met

14 Progressive design-build supports regional firms Selection methodology focuses on traditional evaluation criteria Primarily qualifications based Can be tailored to support local expertise/capabilities Proposal preparation significantly less costly Limited design effort to be performed on spec Regional firms can support larger teams with minimal proposal investment More flexibility to use regional subs after design-builder selection Owner can provide input on preferred specialty firms Design packages can be developed after the procurement Does not require as much at-risk capability Subs can participate without taking an at-risk position

15 Risks managed Permitting Land Acquisition and Easements Geotechnical & Utility risk Materials and Equipment escalation Capital Cost Availability

16 Owner interaction benefits Work with one designer do it once, right Allows direct input from Owner Departments Cost analysis of options available as project progresses Land acquisition challenges tackled as a team Scope adjustments resulting from capital constraints

17 Owner questions to facilitate choice of alternate delivery Is capital availability uncertain? Do staff desire to participate in scope advancement? Does project schedule have limited time (less than 9 months) to develop the procurement and enter into contract? Will permitting requirements likely impact the scope of the project?

18 Owner questions to facilitate choice of alternate delivery (cont d) Will land acquisition likely impact the alignment or orientation of project? Does schedule dictate initiation of key project activities before all capital funding available? Do state statutes allow use of alternate delivery?

19 Top ten success strategies for owners 1. Choose the qualified people you want to work with 2. Consider the approach presented by the potential designbuilder 3. Establish a decision-making process for the project to promote rapid decision-making 4. Involve key stakeholders early in design process (e.g.: operations staff) 5. Senior Management (designer-builder and owner)to meet regularly to review project status and issues

20 Top ten success strategies for owners 6. Jointly address permitting issues, track them, and press agencies for action 7. Manage land acquisition as early as possible, including in particular construction easements 8. Communicate capital availability and constraints so they can be integrated into execution plan 9. Incent the project results you wish to accomplish 10. Celebrate interim success milestones

21 Help is available to owners!

22 What s so progressive about Progressive Design Build? Mark Alpert, PE, DBIA & Peter Tunnicliffe, PE, DBIA