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Alternative Project Delivery Mechanisms
The J. K. Spruce Experience
Katherine YatesAssistant General Counsel
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Overview
• J.K. Spruce #2 planned as early as 1986. • Authorized to proceed without permit in
2004.• Chose Design-build methodology.• Issued Two Phase RFP.• Two Offerors Responded/Awarded July
2005.• Issued LNTP’s in August 2005 and full
NTP in April 2006.• Provisional acceptance expected no later
than March 2010.
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Traditional Process
• Chapter 252 of Local Gov. Code governed procurement activities.
• Design-Bid-Build was only available method.
• Bids advertised, opened and awarded publicly.
• Award based on Lowest responsible bidder.
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New Processes
• Chapter 271, Subchapter H added in 2001.
• Authorized “best value” determination.• Five new methods for project delivery:
– Competitive sealed proposals– Design-build– Construction manager-agency– Construction manager-at-risk– Job-order contracting
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Design-Build process
• Single entity provides design and construction.
• Two phase procurement process:– Phase One RFQ based on
qualifications, references, past experience.
– Phase Two RFP based on schedule, implementation plan, technical approach, cost.
• Award to best value offeror.
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Design-Build Advantages
• Fast-track schedule and construction
• Single point of contact.• Cost savings due to value
engineering.• Less owner administrative burden
during construction phase.• Potential for minimization of
change orders.
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Initiation of CPS Energy Process
• Board Resolution selecting “best value” process.
• Engage Owner-Engineer to develop Design Criteria Package.– Functional specification and conceptual layout.– Desired equipment margins.– Quality and performance guarantees.– Transmission access.– Geotechnical and environmental information.
• Engaged the services of a surety consultant• Joint development of RFPP/RFP and evaluation
matrices.• Pre pre-bid meeting held with interested parties.
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Phase One-RFPP
• RFPP advertised and sent to attendees.• Pre-bid meeting held with Site visit.• Evaluation criteria:
– Ability to bond penal value of $250 million.– Financial status.– Reputation in industry.– Past experience.– Resumes of proposed project team. – References.
• Two offerors qualified to proceed to Phase Two.
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Phase Two
• Offerors given the RFP.• Agreement to reimburse losing entity of
up to $1 million for preparation costs.• Evaluation criteria:
– costs– Implementation plan– Project schedule– Safety record– Workforce and training plans– Costing methodology– Initial Design drawing and schematics
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(con’t.) Phase Two
• Interviews conducted to clarify exceptions and technical response.
• Offerors asked to resubmit responses based on discussion and to provide pricing to remove exceptions.
• Signed agreement “fixing” responses for evaluation.
• Evaluation and recommendation of selected offeror.
• Negotiations with selected offeror and award based on reaching satisfactory contract.
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Post Award
• Limited Notices to Proceed:– LNTP #1- Early planning and engineering for
procurement of long lead time items.– LNTP #2- Vendor engineering.– LNTP #3- Preparatory site construction work– LNTP #4- Material and Equipment purchase
release– LNTP #5- Controls upgrade
• Full Notice to Proceed upon issuance of permit.
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Keys to Success
• Clear and comprehensive Design Criteria package.
• Effective integration of proposed Design-Build Team.
• Full and consistent communication. • Owner involvement.
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Commercial Considerations
• Testing and commissioning done by third party.
• Contract price.• Payment and performance bonds.• Construction risks.• Bidding stipend.• Bonus for early completion.• Payment of prevailing wage.• Use of a Local Government Corp.