AWWA IMS Leadership Forum Project Delivery Systems June

AWWA IMS Leadership Forum Project Delivery Systems June

AWWA IMS Leadership Forum Project Delivery Systems June 9, 2016 Phil Sudol Alan Domonoske The Master Builder Project Delivery Timeline Programing Programming Design Commissioning Construction End Users Regulatory Agencies Council Stakeholders Finance

Maintenance Building Department Owner Owner Owner Operations Geo Tech Concrete Life Safety Consultant Structural Steel I&C Electrical Trade Contractors Structural Engineer

Master Builder Design Consultants Electrical Engineer Mechanical Civil Engineer Yard piping HVAC Stone Mason Landscape Architect Mechanical Engineer Architect Closeout Project Team

Core Team Communication Collaboration & Communication Stakeholders Regulatory End Users Council Agencies Building Department Finance Maintenance Operations Concrete Geo Tech Su bc on Builder I&C

tr ac to rs Electrical Structural Steel Su bc on su l Designer ta nt s Owner Landscape Architect Structural Engineer Electrical

Engineer Mechanical Yard Piping HVAC Civil Engineer Mechanical Engineer Life Safety Consultant Collaboration & Integration Integration is where an individual of Collaboration is where individuals of the project team regardless of discipline can share the collaborative information in a way that the entire project team can utilize the same information toward a common set of project outcomes. the project team regardless of discipline shares information directly with another individual of the project team working

toward a common set of project outcomes. Owner Regulatory Agencies End Users Council Building Department Finance Maintenance Operations Concrete Exceptional Integrate the Project Collaboration Outcome B

ui ld er Builder Life Safety Consultant Designer D es ig ne r Structural Steel I&C Geo Tech Owner Landscape Architect

Structural Engineer Electrical Electrical Engineer Mechanical Project Team Yard Piping HVAC Civil Engineer Mechanical Engineer Delivering an Exceptional Project Quality Cost 5

Delivering an Exceptional Project Quality Cost Exceptional Project 6 Spectrum of Delivery Methods Integrated Project Delivery (IPD) Design-Bid-Build CMAR Design-Build (DB) DBO DBFO DBFOO Public-PrivatePartnership (P3) 7 Industry Trends Suggest Continued

Use of IPD 8 Average Value of New Contracts 6 3 14 36 <$500 $500-$1M $1 - $10 M $10 -$50M $50M > 41 9 Prevalence of Industry Contracts 3.00% 38.00% 59.00%

Fixed Price Progressive DBO 10 Reasons Owners Choose Design/Build 11 Delivery Methods Basic Delivery Design-Bid-Build (DBB) Intergated Delivery Methods Construction Management at Risk (CMAR) Progressive Design-Build (GMP) Fixed-Price Design-Build (FP)

Design-BuildOperate/ Finance, etc. 12 Design-Bid-Build (DBB) Method Owner Alternate Terminology Competitive Bidding Pricing Structure Fixed Bid Price (LS) Legend Working Relationship Contractual Relationship 13 Contractor Cost Model Timeline - DBB Lump Sum

Bid Design Definition Owner Engineer 0% 30% 60% 90% Cost Estimate Cost Update Cost Update 100% Bid Estimate

14 Construction Manager at Risk (CMAR) Owner Alternate Terminolog CM/GC GC/CM Pricing Structure Negotiated GMP Legend Working Relationship Contractual Relationship 15 Cost Model Timeline CMAR CMAR Cost Model Development

GMP Design Definition Owner Engineer 0% 30% 60% 90% 100% Initial Cost Estimate 16 Design/Build (D/B) Method Owner Alternate Terminology

Fixed Price Performance-Based Prescriptive-Based Progressive Pricing Structure Fixed Bid Price (LS) or GMP Legend Working Relationship Contractual Relationship 17 Fixed-Price Design-Build Owner PM/OA Design/Builder Design Definition Design Development and Construction Procurement Execution

FIXED-PRICE 18 Progressive Design-Build Owner PM/OA Design Definition Design/Builder Design Development and Construction 100% Phase 2 Phase 1 PRICE 19 Qualifications Based Selection Project Definition Predesign

Final Design Construction Startup ADVANTAGES Reduces procurement time and cost Most qualified Design-Builder is selected High degree of Owner control Owner defines/negotiates scope, quality, price and schedule 20 Qualifications Based Selection Project Definition Predesign Final Design Construction Startup

DISADVANTAGES Is counter to public low bid psyche Could be tough sell May need to engage a procurement advisor 21 Price Based Selection Project Definition Predesign Final Design Construction Startup ADVANTAGES Price certainty at time of proposal submission Detailed technical information provided 22 Price Based Selection Project Definition

Predesign Final Design Construction Startup DISADVANTAGES Large time investment in procurement Greater effort to review proposals Owner input only during procurement development Life-cycle cost considerations limited 23 Predesign Performance Based Final Design CONTROL INNOVATION Price Based Selection

Prescriptive Based 24 Performance vs. Prescriptive Performance Based Prescriptive Based Maximum potential for cost savings through innovation Substantial control over project design and O&M costs Maximum transfer of design-related performance risk Proposal selection can emphasize project design build costs Relatively low costs to prepare RFP / Proposal High level of project definition at time contract is signed ADVANTAGES

25 Performance vs. Prescriptive Performance Based Prescriptive Based May result in higher O&M costs Procurement duration is longer Proposal evaluation and selection is more complex RFP preparation is more costly due to high level of design Potential for decreased participation due to higher preparation costs Design risk not clearly assumed by the Design-Builder Limited Owner input into design after proposal is accepted DISADVANTAGES

26 Best Value Selection Qualifications Cost Best Value Selection ADVANTAGES Price certainty at time of proposal submission (maybe) Detailed technical/qualifications information provided Depending upon cost component collaboration can still exist 27 Best Value Selection Qualifications Cost Best Value Selection DISADVANTAGES Large time investment in procurement Greater effort to review proposals Life-cycle cost considerations limited

28 Overview of Selection Process 2. 1. Identify Project Goals/Drivers Determine Suitable Delivery Methods 3. Define Criteria and Assign Weighting 4. Evaluate SELECT DELIVERY METHOD 29 Step 1: Identification of Project Package Drivers and Goals

Typical Questions to Ask to Understand Drivers/Goals Does schedule need to be accelerated? Allocation of design risk to contractor? When is cost certainty required? Qualifications-based selection of contractor? Contractor involvement during design a benefit? Project complexity and level of unknowns? Low-bid required/desired? Operations contract? Financial return on investment potential (investor interest)? Early equipment procurement required? Would project benefit from contractor flexibility/innovation? 30 Step 2: Determine Suitable Delivery Methods D/B Drivers Schedule Risk Allocation Control Cost Certainty Qualifications-Based Selection DBB PD/B DBO

Improved Efficiency Collaborative Design Development Minimization of Change Orders Early Equipment Identification Contractor Flexibility/Innovation Suitable Delivery Methods to Evaluate 31 Step 3a: Define Evaluation Criteria Level of Control Schedule Delivery Method Cost Risk Allocation 32

Step 3b: Obtain Stakeholder Input to Determine Relative Importance of Evaluation Criteria Risk Allocation Cost Level of Control Schedule % Level of Control/Innovation 24 Schedule 26 Cost 30 Risk Allocation 20

TOTAL 100 33 Step 4: Utilization of Evaluation Matrix to Select Preferred Delivery Approach Weighting DBB Factor Rank Score LEVEL OF CONTROL 24 4 96 SCHEDULE 26 2 52 COST 30 3 90 RISK ALLOCATION 20 2 40 Total Points

100 278 CM/GC Rank Score 4 96 4 104 4 120 3 60 380 D/B Rank Score 3 72 5 130 4 120 4 80 402 PD/B Rank Score

4 96 4 104 4 120 5 100 420 1 = Least Favorable; 2 = Less Favorable; 3 = Neutral; 4 = Favorable; 5 = Most Favorable OR LEVEL OF CONTROL O&M Considerations Sustainability Level of City Control Project Quality City Resources Weighting DBB Factor Rank Score 24 --4.8 4.8 4.8 4.8

4.8 5 4 5 2 2 25 20 25 10 10 CM/GC Rank Score --4 3 4 4 3 20 15 20 20 15 D/B

Rank Score --2 2 2 3 4 PD/B Rank Score --- 10 10 10 15 20 4 3 3 5 3 20 15 15 25 15

SCHEDULE 26 ------COST 28 ------RISK ALLOCATION 22 ------Total Points 100 278 380 402 1 = Least Favorable; 2 = Less Favorable; 3 = Neutral; 4 = Favorable; 5 = Most Favorable ---- ---420 34 Metro Wastewater Reclamation District Northern Treatment Plant $450M Total Program Costs 7-mile gravity interceptor (DBB) Treatment plant site restoration (PDB) 24 mgd treatment plant (PDB) Northern Treatment Plant Project Largest PDB (W & WW) to-date; largest new WWTP currently in U.S.

Greenfield satellite facility (60 mgd build-out) Intricate regulatory conditions; advanced treatment Daily TIN < 10 mg/L, Total P < 0.1 mgd, high-level disinfection Community amenities (e.g., visitors center, effluent wetlands/ponds, odor control) Complex project with high public + political visibility Carollo/Jacobs Serving as Owners Advisor (Years 2010 to 2016) 35 Benefits Realized by the District Using PDB Approach 1. Best Value Selection of Suppliers, Subcontractors Competitive (market) pricing + other best value criteria 2. Early Cost Certainty with High-Level Design Control Owner involvement in design progression Interim milestones: 30%, 50%, 70% Flexibility to make mid-stream adjustments to meet budget Early bidding of suppliers, subs (50% design) Negotiated Stipulated Price at 70%

3. Open Book Cost Model Provided accounting of all costs Ensured self-performance competitiveness via 3 rd party validation (concrete, mechanical, yard piping, I&C) Reduced risk and escalation contingencies 36 NTP Facilities Cost Trending History (Total Project Cost) $450,000,000 $400,000,000 $350,000,000 $300,000,000 19% Reduction $311,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 $- 37

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