Alternative Project Delivery Methods

October 2014

1

Presenters

• Albert Thomas– American Council of Engineering Companies New

Mexico

• Elias Archuleta– New Mexico Department of Transportation

• Adam Triolo– Associated Contractors of New Mexico

• Robert Ortiz– American Council of Engineering Companies New

Mexico

2

Presentation Outline

• Introduction & Background– Need to Investigate Alternative Project Delivery

Methods– Current Procurement Code & Bidding Strategies– Goals & Objectives

• Design-Build Method of Project Delivery• CMGC Method of Project Delivery• Job Order Contracting Method of Project

Delivery

• Next Steps

3

Need for Alternative Project Delivery Methods

• Rising costs of construction

• Greater public demands

• Current Procurement Code has limitations

• Seek opportunities to improve flexibility, cost effectiveness, and speed of delivery

KEY: Alternative Project Delivery is not intended to prescribe or

mandate a particular method as the norm, but offers additional

TOOLS to draw upon for unique circumstances.

4

Current New Mexico Procurement Code Limitations

• Mandates Low Bid Procurement– No flexibility to use other procurement methods– Award to lowest responsive bid– Lowest bid not always Best Value or Highest Quality

• Specifications – Tend to be Prescriptive-Based vs. Performance-

Based

• Design-Build exempts Highway Construction– Limited experience via Special Legislative Approval

• CMAR Procurement for Vertical Construction

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NMDOT Current Experience with Bidding Strategies

• Lowest Responsive Bid– Bid Alternatives; however limited in applying additive

or deductive components– A + B (Value + Time)– Lane Rental– Disincentive (Liquidated Damages)– Incentive (contract time)

• Limited Design-Build– 4 Legislative Approved Projects

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Goals for Alternative Delivery

• Partnership between NMDOT, ACEC NM, and ACNM to develop a proposal that could be legislated to allow for Alternative Project Delivery Methods in New Mexico’s Transportation Industry– Becomes an industry initiative not solely a DOT

initiative

– Not limited to Design-Build; also includes CMGC and Job Order Contracting (JOC)

– Offers alternative strategies to be used, not as the norm, but as available tools for unique circumstances

– Educate Industry and Governmental Agencies on use of Alternative Project Delivery Methods

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Design-Build

Elias ArchuletaNMDOT

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Design-Build

• DB requires Legislative authority• Owner provides Preliminary Design

(approx. 30%) • Contractor provides final design and

construction services.• Criteria for use of DB• Qualifications-based selection process.• Risk transferred from Owner to Contractor

– Contractor is responsible for the design of the project as well as the construction.

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Design-Build

• Two-Step Procurement Process• First Step – Submittal of Statements of Qualifications

(SOQ)• Open to any prospective contractor/design team• SOQs are evaluated by the evaluation teams and selection

committee• Selection committee determines a short list of two to four teams

based on the evaluation of the SOQs

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Design-Build

• Two-Step Procurement Process (continued)

• Second Step – Request for Proposals (RFP)

• Short List - Short listed teams are provided with RFP• Proposal Development - The DB teams then develop the final

design• Stipend - A stipend may be provided• Evaluation - The proposals are evaluated on qualifications and

price separately. • Determination - the selection committee makes a

determination on a Best Value selection, generally 50% quality and 50% price.

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Design-Build

• When should Design-Build be used?

• Projects where the Department can adequately define the project requirements and expectations

• Projects with time constraints• Projects with funding/cost constraints• Project constraints conducive to D/B

• Location / Size / Performance Requirements• Projects where the Owner can adequately manage and

oversee the project• employment of experienced personnel or outside

consultants

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Design-Build

• NM 528 Widening, Rio Rancho• 2.3 mile Urban Widening Project with Drainage and Landscaping

Improvements• Roadway: Widen existing NM 528 to 8 lanes between Coors By-Pass

and Sara Rd. and 6 lanes from Sara Rd. to Southern Blvd.• Drainage: Construct new 96” storm drain to replace the existing open

channel• Landscaping (funded by Intel): Enhance landscaping throughout the

corridor • Project Cost: $21 million

• Public Private Partnership: NMDOT 50%, City of Rio Rancho 25%, Intel 25%

• Schedule: Project completed in 10 months• Project was completed 2 months ahead of original schedule• Design-Build allowed the project to be completed approximately 15

months sooner than traditional Design/Bid/Build• Indirect savings to motorists: Over 1 million hours of vehicle delay with

an estimated loss of productive time of $12 million13

Design-Build

• US 70 Hondo Valley• 37.5 mile Rural/Small Urban Widening Project with Safety and

Access Improvements• Roadway: Widen existing US 70 to 4 lanes through the Hondo Valley

(Riverside to Ruidoso Downs)• Safety: Correct deficient roadway geometry, improve intersections,

flatten slopes, install barriers• Access: Consolidate driveways and improve sight distance conditions

at driveways• Project Cost: $130 million• Schedule:

• Although the project was delayed due to lawsuits filed by the Valley Community Preservation Committee, the project progressed well once these issues were settled. Innovations such as Programmatic Agreement with SHPO and a modified ROW acquisition process resulted in an expedited project delivery time.

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Design-Build

• I-40/Coors Interchange Reconstruction, ABQ• 2.0 Miles Urban Interchange with a grade separation of a surface

street and pedestrian improvements• Roadway: Construct three-level interchange of I-40 & Coors Blvd. with

multiple ramps and bridges at I-40 and Coors• Grade Separation: Grade separate Coors Blvd. at Ouray Rd.• Pedestrian Improvements: Construct two pedestrian bridges

• Project Cost: $90 million • Project Bid for $85 million and delivered for a cost of $90 million due to

additions to the project requested by the City and DOT• Design-Builder’s bid and ideas to modify the interchange design

resulted in a savings of $10 million that would likely have been designed and constructed into a typical Design/Bid/Build (low bid).

• Schedule: Project completed in 18 months• Project completed 1 month ahead of original schedule• Indirect savings to motorists: Over 2 million hours of vehicle delay with

an estimated loss of productive time of $20 million

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Design-Build

• New Mexico Rail Runner, Phase II• 18-mile Commuter Train Extension Project, Bernalillo to Santa

Fe• Railway: 18 miles of new rail from bottom of La Bajada Hill to Santa Fe,

connecting new rail to existing. Include upgrades to existing track from St. Francis Dr. to the Santa Fe Rail Yard

• Structural: Construct six new bridges, six load transfer structures, and 1,000 ft. concrete box for rail

• Project Cost: $128 million• Schedule: Project Completed in 16 months

• On a project of this size, it would normally take about three years to obtain a completed design package that would be ready to be advertised for construction using the Design/Bid/Build process

• It would have then have taken about two years to construct the project

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Design-Build

• I-25/Paseo del Norte Interchange Reconstruction• Reconstruction of Interchange & Grade Separation of Paseo del

Norte • Roadway: Reconstruct interchange, construct directional ramp, grade

separate Paseo from I-25 to rail spur, partial lyreconstruct ramps at San Antonio and San Mateo

• Project Cost: $75 million• Schedule: Expected Completion, December 2014

• Project on Schedule: Design 99% complete, Construction 50% complete

• Changes to Process• Implemented Alternative Technical Concept process during the RFP

stage

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Construction Manager General Contractor

(CMGC)

Adam TrioloACNM

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• What is the delivery method?

CMGC

Client or OwnerBid / Explain / Build Bid Build

Contractor Designer

Phase One: A “Construction Management”

consulting contract to help with design.

Phase Two: A “General Contracting” contract to

build the project .

CMGC

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• Advantages

CMGC

Early planningimproves ability toresource craft/staff

needs

Improved cost and scheduleperformance

Risks assigned toparty best suited to

manage

Cost and schedulecertainty

Transparentestimating process

avoids conflicts later

Risks identified andmitigation plansprepared early

Improved teamintegration

CMGC/CMARBENEFITS

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• Disadvantages• Culture – New process for Client/Owner staff (Open Minded

Approach)

• History – Still a new method of procurement for heavy civil highway projects

• Client – Perception that they are not getting the best price for the work

CMGC

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• The Procurement Process

CMGC

RFP

/ R

FQ

Shor

tlist

Inte

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w

Sele

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n

30%

Des

ign

&

Itera

tive

Pric

ing

60%

Des

ign

&

Itera

tive

Pric

ing

Beg

in P

re-C

onst

ruct

ion

Adv

ance

Wor

k Pa

ckag

esPRE-CONSTRUCTION NEGOTIATION

LOI

90%

Des

ign

&G

MP

GM

P –

Con

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tN

egot

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Full

NTP

- C

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Typical Timeline Representation

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• Risk

CMGC

Contractors

Client/Owners

Contractors

Client/Owners

DBB CMGC DB

RIS

K

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• When should this delivery method be used?• Projects with Time or Funding contraints

• Many stakeholders involved

• Project or design has unique construction elements

• Help with phasing, defined schedule, and construction process

• Public impact and safety

CMGC

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• CDOT ExampleOpportunity and Obstacles /Project Risk Assessment Discussion Checklists • Delivery schedule• Project complexity and innovation• Level of design• Cost• Site conditions and investigations • Utilities• Drainage/water quality • Environmental• Staff experience/availability• Level of oversight and control• Competition and Contractor experience

CMGC

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• Other States – Outcomes• Other states’ DOTs adopting and adapting • Finding successes with procurement model

CMGC

State Project Shortlist Self Preform % % Proposal % Price Interview %

AZ Sky Harbor YES 45% 100% 0% 100%

FL Orlando Intermodal YES Defined by CMGC/CMAR 100% 0% Plus/Minus

UT SR-14 NO 50% 70% 30% Optional

NV McCarron YES 25% 100% 20% 80%

WA Sound Transit NO 30% 60% 20% 20%

AK Tanana Bridge NO 70% 85% 15% N/A

CO I-70 and Pecos NO 70% 60% 20% 20%

WA TriMet NO Defined by CMGC/CMAR 70% 30% Plus/Minus

TX Tex Rail YES Defined by CMGC/CMAR 75% 25% N/A

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Job Order Contracting(JOC)

Robert OrtizACEC NM

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• What is Job Order Contracting• Alternative to the traditional DBB method of project

delivery• Best Value Quality Based Selection Process• Indefinite Delivery/Indefinite Quantity Contract

– One or more offerors– One year or multiple years

• Job Orders issued on On-Call, As-Needed basis• Alternative Procurement Method to get small,

routine, and commonly encountered construction projects under contract easily and quickly

• Close Owner/JOC Contractor working relationship• Innovation• Timely project completion

Job Order Contracting

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• What is Job Order Contracting (continued)• IDIQ Contract (Base Contract)

• General Scope of Services with minimum dollar amount• Includes a Unit Price Book of Items priced by Owner• Contractor submits a Price Coefficient (multiplier)• Contracts can include multiple Price Coefficients

• Work within a District• Work within a County• Rural/Urban Locations• Work during normal working hours/night work

• Owner Issue Job Orders• Construction, Design, PreConstruction Services• Job Orders – initiates the work on an On-Call basis

Job Order Contracting

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• Why Use Job Order Contracting?• Saves Time - JOC enables Owners to initiate and complete

routine construction projects quickly by eliminating the time to bid each project

• Decreases project duration and cost• Potential to Increase Quality

• QBS Selection Process• JOC Contractor/Owner relationship developed

• Better use of Owner resources in procuring services

Job Order Contracting

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• Contractual Relationship

Job Order Contracting

Job Order Contract Job Orders

Owner

JOC ContractorConstruction, Design,

Pre-ConstructionServices

JOC Contractor JOC Contractor

DesignerDevelops Job Order

ContractIn-house/Consultant

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• When is JOC Used• Owner’s needs include

• Repetitive and routine jobs and situations• Small, routine, and commonly encountered construction

processes• Projects requiring minimal design effort• Projects with a minimal risk of unknowns

• Examples of Highway Construction Projects• Minor Construction, Mill and Inlay Projects, Bridge Rehab

Projects, Bridge Deck Overlays, Pavement Preservation Projects, Highway Maintenance Projects

• These types of projects can be done quickly and easily• Best suited for routine work with well-defined work items and

governing standard specifications

Job Order Contracting

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• JOC Procurement Process – Two Phase Process• Selection Team Appointed• Phase 1 – Request for Qualifications (RFQ)

• Qualifications-Based Selection Process• Offeror must self-perform 50% at minimum• Evaluate RFQ’s and compile Short List

• Phase 2 – Request for Proposals (RFP) and Interviews• Evaluate RFP’s – Best Value (Quality and Price)• Conduct Interviews• Score and Rank• Recommend Award

Job Order Contracting

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• Procurement Process

Job Order Contracting

Need IdentifiedScope, Location, Quality &

Design Criteria

Selection CommitteeDefine Selection Criteria

Job Orders IssuedOn-Call, As-Needed Basis

RFQQuality Based

RFQ Evaluation & Short List

RFPBest Value Selection

Quality and Cost

Interview and Rank

Selection and AwardSingle or Multiple

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• Advantages• Reduces Project Delivery Time• Quality of work equal to or higher than traditional procurement

methods• Qualifications-based selection process, not low bid• Long-term relationship established between Owner and

Contractor• Job Orders can be issued quickly

• Construction starts quickly; within 20 CD of need• Saves time and money in procurement process

• Minimizes staff and resources required to procure construction services on a project by project basis

• Contractor can provide design services and other pre-construction services as provided in contract

Job Order Contracting

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• Disadvantages

• Not conducive to large, detailed projects• Method does not accommodate work outside of original scope

well• Culture Shift –

• New process for NMDOT and Contractors

Job Order Contracting

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• Is JOC Being Used Now• Used extensively for water, wastewater, building, and site

maintenance work• Pennsylvania Turnpike and Arizona DOT

• Pavement preventative maintenance projects• Bridge deck overlay projects

• New Mexico – uses a form of JOC• Price Agreements in Hwy Maintenance• JOC allows for design or pre-construction services in

support of routine projects

Job Order Contracting

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Closing Remarks/Next Steps

• Task Force (ACNM/ACEC/NMDOT)– Continue to work on and refine Alternative Project

Delivery Information– Educational Program

• Host Alternative Project Delivery Symposium– Involve affected Industry Groups & Stakeholders

• Continue New Mexico Outreach – Regionally

• Draft Legislation Language

KEY: Alternative Project Delivery is not intended to prescribe or

mandate a particular method as the norm, but offers additional tools to draw upon for unique circumstances.

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Closing Remarks/Next Steps

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Thank You

• Questions?

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