Design-Build Lessons Learned

1. Design-Build Lessons Learned 2009 Raleigh Seminar – December 17

2. National Bridge Inventory • Over 150,000 bridges structurally deficient or functionally obsolete • ≈ 3,000 added annually • Over 130,000 bridges currently recommended for replacement - $70B+ • Approximately ¼ of the US Inventory needs rehab or replacement

3. Design-Build / PPP Experience • California: SR 125 • Open to traffic Fall 2007 • Milwaukee: 6th Street • Open to traffic • North Carolina: US 17 Washington Bypass • Under construction • Calgary: Ring Road • Under construction • Edmonton: Ring Road • Under construction • Virginia: Gayton Road • 80% design

4. Design-Build / PPP Experience • Florida: I-595 PPP • Win • Virginia: Hwy 460 • Short listed, RFP stage • Texas: North Tarrant • Negotiating contract • Texas: NTTA SH161 • Negotiating contract • Texas: Trans-Texas Corridor (TTC-35) • Hwy 130; Design in progress • Pennsylvania: Turnpike • Team selected, project dropped

5. Any change, even a change for the better, is always accompanied by drawbacks and discomforts Arnold Bennett

6. Innovative Contracting Fast-Track Construction • Design-Build & PPP • Cost + time strategies • Risk Assessment • Partnering • Quality Control / Assurance • Innovation

7. Advantages of Design / Build • Enhanced Constructability • Design development coupled with the Contractor’s “over-the-shoulder” review • Development of “means & methods” that match the Contractor’s past experience, ability, and available equipment • Delivery of large, complex, schedule-driven projects faster • Contractor’s enhanced control over schedule (at-risk option) • Allows the Owner and D/B Team to react to unforeseen obstacles by making adjustments prior to 100% design completion

8. Good Candidates for D/B • Projects that can have a well defined scope for all parties • Projects with low risk of unforeseen conditions - with low possibility for significant change during all phases of work. • Projects that have room for innovation in the design and/or construction effort. • Projects with well-defined, non-complex environmental permitting requirements. • Projects that require minimum right of way acquisition and utility relocation. • Projects that demand an expedited schedule and can be completed earlier.

9. Poor Candidates for D/B • Urban construction/reconstruction with major utilities, major subsoil problems, major R/W requirements, complex environmental permitting requirements, or other major unknowns. • Major bridge rehab/repair with significant unknowns • Rehabilitation of movable bridges

10. Innovative Financing Advanced Project Scheduling and Estimating Techniques • Expanded use of electronic project scheduling, estimating tools • Cost sharing strategies • Tolling mechanisms • Contractor financing • Leveraging techniques • Credit assistance • Cost management & containment concepts

11. Ensuring Success – Advice for Owner • Do your homework. . . • Well prepared RFQ/RFP • Clear, concise, project-specific – not a “cut & paste” • Define evaluation factors and weighting criteria • Share Information • Provide surveys, geotechnical, and environmental data up front • Understand project costs - realistic budget • Don’t expect D/B bids to be lower than those of projects using traditional design-bid-build process. • Expect a normal number of change orders, although the resulting cost may be lower as details may be reworked prior to 100% plans • Plan for a reasonable contingency.

12. Ensuring Success – Advice for Owner • Do your homework (con’t) . . . • Clear scope of work expectations • Poorly defined – overly defined • Only get what you include? • Assemble your best team • Experienced Personnel • Adequate Manpower • Must get comfortable with a less “hands-on control” approach • Less formal design oversight and reviews by Owner • D/B Team designer is “Engineer of Record” • Be flexible and responsive (time is money)

13. Ensuring Success – “Hands Off” • Innovation • Alternate Technical Concepts • Take advantage of designer-contractor working together to develop economic/efficient designs • Earthwork • Constructability (traffic control) • Bridge design features • Alternative materials • Proven means/methods from other states • Don’t be more committed to established processes, procedures, or individual agendas than to the overall success of the project. • Performance based vs. standard prescriptive specifications • Realize that there are different interpretations

14. Ensuring Success – Commitment • Technical Proposal • Considered a “Book of Promises”, i.e., deviations require consequences • Do not include “flowery” or “non-descriptive” commitments • Owner should seek clarification during Q&A • Innovation does not typically include revisions to AASHTO criteria or Owner specifications and policies. • Perception is designers are “designing on the edge” • Reason for non-acceptance other than “That’s not how we normally do it” • Performance based specifications

15. Ensuring Success • Partnering • Make it real, not an exercise (Ownership) • Well- defined communication process • Quick resolution with decisions made at the lowest possible level • “Corporate “ buy-in to on-site commitments • Escalation ladder • Include 3rd party stakeholders early • Whether stakeholders or not, uncommitted or uninterested third parties can damage a project through their actions or inactions • Trust • Open & honest communication • Takes time (starts Day 1)

16. Managing Risk • Assign “Risk” responsibility to appropriate stakeholder that can best manage the risk • Avoid pass-through costs • Major price component in contractor’s bid (contingencies – consider cost allowances) • Typical risk items • Governmental – potential for delays, modifications, withdrawals, scope changes, or additions from multi-level Federal State and local participation and sponsorship • Regulatory – RR, environmental permits, 3rd parties • Construction – reliance on reference drawings, differing site conditions, hazardous material remediation, interim drainage, traffic control, public access, weather, etc. • R/W and utilities – unknown costs, time delays, condemnation • Post-construction – public liability, meeting stipulated performance standards

17. Managing Quality • Clear, detailed QC/QA program by Owner • Required approvals (all parties) • Inspection should be consistent with traditional delivery projects (don’t expect perfection) • Contractor performs inspection, sampling, and testing • Contractor CEI? – too many layers • Owner or independent inspection and verification • Clean slate every day • Consider the cost-effectiveness of warranties or operation requirements - consideration of life-cycle costs • Independent “Peer Review” for major project components • DOCUMENTATION • Document all actions and decisions

18. Designer Specific Concerns • Proposal costs – stipends • Conflict of Interest • Pre-RFP work for the Owner • Compensation from both the Owner & Contractor, i.e., CEI and design • Level of design • 10% to 15% for Proposal effort • Best value determination • Selection should include quality component • Bidding of professional services • Owner requirement for team commitment

19. Designer Specific Concerns • Quantity Risk • Limitation of liability • Consequential damages • Contractor initiated changes • RFIs versus plans modifications • Dispute resolution • DRBs • Back charges versus Retainage Be proactive not reactive

20. Questions?