alternative project delivery methods and procurement
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Alternative Project Delivery Methods and Procurement
Board of Airport Commissioners Meeting 2 June 2014
Presented by:
Roger A. Johnson, Deputy Executive Director
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• Project Delivery Method
o The process by which a construction project is designed and constructed
• Project Procurement Process
o The process by which a construction contract is procured
Definitions
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Construction Success Defined
• No compromise on Safety or Quality
• Minimize impacts on airport operations
• Competitively priced (Best Value)
• M/WBE, SBE, and local business opportunities
• Meet schedule and budget commitments
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Step 1 Hire a designer for the least cost
Step 2 Bid the drawings (plans) and specifications
Step 3 Build the project with the least costly design and the contractor who had the lowest bid
Typical Project Procurement and Delivery Process
Design-Bid-Build (DBB)
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Design Bid Build
Project Time
Proj
ect C
ost
Lump Sum Bid
Conceptual Estimate
No Collaboration from Builder
Project Completion
Project Budget
Typical Project Delivery Timeline
Design-Bid-Build (DBB)
Delivery Timeline
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Advantages • Scope is rigidly defined
• Greater degree of owner control since the design team and contractor report to owner
• Most understood and accepted process
Disadvantages • Cost of construction is not determined until bids are received (can lead to
need to redesign, extended schedule, and increased costs) • Contractor is not able to give advice during the design, budget, or planning
phase (no collaboration) • Limited opportunities for schedule improvement • Owner owns design deficiencies • Owner-initiated changes are difficult and expensive to implement
Owner
Designer Builder
Delivery Method Selection
Bottom Line • Good choice for simple projects that are not schedule sensitive
Design-Bid-Build (DBB)
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2. Select the best firms for the projects
1. Work collaboratively to deliver projects
Through a collaborative alternative delivery process
Using a qualifications based selection of designers and contractors
Alternative Delivery and Procurement
Add Tools to the Delivery Toolbox
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Work Collaboratively
Construction Manager at Risk (CMAR)
Owner
Designer Contractor
• Same contractual relationship as typical DBB delivery method
• Contractor is brought on early in the design phase to provide constructability and Value Engineering (pre-construction)
• Owner retains control of design
• Owner retains responsibility for design schedule, completeness, and coordination
• Trade packages and contractor profit are competitively procured
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Construction Manager at Risk (CMAR)
Delivery Timeline
Design
Build
Project Time
Proj
ect C
ost
CMAR Hired
Buyout Complete
Begin Buyout
Conceptual Estimate
Competitive Open-Book
Collaboration (Design Assist)
Project Completion
Project Budget
Work Collaboratively
GMP
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Work Collaboratively
Construction Manager at Risk (CMAR)
<10% Lowest
Ultimate Cost
>90% Competitive Bids
Structure
Excavation / Foundation
Mechanical / Electrical / Plumbing
Finishes
Typical trade packages
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Advantages • Phase overlap is possible allowing for a faster construction schedule
• Changes in design or scope can be more easily accommodated than under DBB or DB
• Owner maintains control of design • CMAR collaborates with designer during design phase on constructability
and Value Engineering
Disadvantages • Owner maintains liability for design deficiencies
• Delivery can be longer than DB
Delivery Method Selection
Bottom Line • Best suited for large projects that are difficult to define, likely to change in
scope, or schedule sensitive • Useful for projects requiring extensive management due to technical
complexity, multi-trade coordination, or multiple phases
Construction Manager at Risk (CMAR)
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Work Collaboratively
Design-Build (DB)
• Single contract between owner and Design-Build entity
• Collaborative design responsibility
• Design-Build entity responsible for design: - Schedule - Completeness - Coordination
• Design fee and contractor profit packages are competitively procured
• Trade packages are competitively bid
Owner
Design/
Builder
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Design-Build (DB)
Delivery Timeline
Design
Build
Project Time
Proj
ect C
ost
Design to
Budget
Begin Buyout
Conceptual Estimate
Buyout
Collaboration
Project Completion
Project Budget
GMP
Work Collaboratively
Buyout Complete
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Advantages • Owner, designer, and contractor work collaboratively during all phases of
the project • Owner has a single point of contact throughout the work • Guaranteed Maximum Price can be established early in the process • DB entity assumes all risk for design deficiencies • Significantly faster schedule than DBB and slightly faster than CMAR
Disadvantages • Owner can lose design control without clearly identified project
requirements • Not as responsive to scope change as CMAR
Bottom Line • Most useful in time-sensitive projects and those that have specialized or
technically complex scope
Delivery Method Selection
Design-Build (DB)
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Optimization of Time and Cost
Design
Build
Project Time
Proj
ect C
ost
Lump Sum Bid
Begin Buyout
Conceptual Estimate
Buyout
Collaboration
Time Optimization
Cost Optimization Project
Completion
Project Budget
Opportunity for quality, schedule , and cost savings
Design-Bid-Build (DBB)
Design-Build (DB) / Construction Manager at Risk (CMAR)
Buyout Complete
Design Bid Build
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• Design-Bid-Build (DBB):
o Use the Competitive Sealed Proposal (CSP) selection process • Design-Build (DB) and Construction Manager at Risk (CMAR):
o Use the Lowest Ultimate Cost process
2. Select the best firms for the projects
Procurement
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• Contractor submits Qualifications and Technical Proposal
• Firms with the highest scores are invited to interview
• Following interview, the most qualified firms are invited to submit sealed cost proposals
• Project is awarded to firm with the lowest cost proposal
Procurement
Design-Bid-Build*
* Using Competitive Sealed Proposal (CPS) Selection Process
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Procurement
Construction Manager at Risk / Design-Build
Lowest Ultimate Cost Process
Efficiency Points*
• Firms submit statement of qualifications and technical proposals
• Firms with the highest scores are invited to interview
• Following the interviews, the most qualified firms are invited to submit cost proposals
• Firm with “Lowest Ultimate Cost”
- CMAR Cost Proposal Preconstruction services and proposed fee (%) on total estimated construction cost
- DB Cost Proposal Design fees + preconstruction services and proposed fee (%) on total estimated construction cost
Cost Proposal = = Lowest Ultimate Cost
* Total points from written proposal and interview
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• Under DB and CMAR delivery, the contractors are limited to
10-30% self-performance
o Self-performance work is performed at cost
• All trade work is competitively bid in an open book process
Construction Manager at Risk / Design-Build
Lowest Ultimate Cost Process (Cont)
Procurement
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Design-Build (DB) Central Utility Plant Replacement (2010) Terminal 4 Connector (2013)
Construction Manager at Risk (CMAR) Bradley West Core and Gates (2009) Construction of Central Terminal Area Improvements (2012) TBIT Renovation, Aprons, and Concourse Demo (2013) Second Level Roadway Repair / New Face of the CTA (2014)
LAWA Alternative Delivery Experience
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Design-Build (DB) Barren Ridge Renewable Transmission Project (Ordinance 182950 – DWP)
Haiwee Power Plant Penstock Replacement Project (Ordinance 182940 – DWP) Sylmar AC/DC Filters Replacement Project (Ordinance 182593 – DWP) Scattergood Generating Station Unit 3 Repowering Project (Ordinance 182292 – DWP) Haynes Generating Station Units 5 and 6 Repowering Project (Ordinance 181220 – DWP) Pine Tree Wind Project (Ordinance 178229 – DWP) Security and Surveillance System Projects (Ordinance 176744 – Harbor) Underground Storage Tanks Upgrades (Ordinance 175590 – DWP) San Francisquito Power Plant 2 Redevelopment Project (Ordinance 175027 – DWP) Castaic Power Plant Condition Assessment & Modernization Project (Ordinance 174206 – DWP)
Construction Manager at Risk (CMAR) Sixth Street Viaduct Replacement Project (Ordinance 182353 – DWP)
Silver Lake Reservoir Complex Storage Replacement Project (Ordinance 181639 – DWP)
Other City Departments’ Alternative Delivery Ordinances
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