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Did you say design-build?

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  1. Did yousay design-build? Michael Kenig mkenig@holder.com Holder Construction Company November 5, 2009

  2. Overview • Framework: The Four Stops • Which “Design-Build”? • Comparison of Design-Build Options • What else is different? • Design-Build Discussion “Checklist”

  3. 2. Definitionsof the each of the Delivery Method Options 3. Selectingthe appropriate Project Delivery Method 4. Implementingthe chosen Project Delivery Method The Four Stops on the Road To Alternative Project Delivery 1. Ability to Use an Alternative Project Delivery

  4. Fastest Project Delivery Method? Fast-Tracking Process Planning Design Construction Occupancy NEED Traditional Linear Process Planning Design Bid Construction Occupancy

  5. Understanding Your Options “Which Delivery Method?” • Ability to Fast Track • Open book approach • Ability to pre-qualify • Contractors involved early in the process • Collaborative (not an adversarial) process • Experts are involved early in the process • Focus is on the project’s best interests • Early cost feedback • Rewards performance • Early construction input in the design phase • Higher quality product • Better risk management • Fewer claims/lawsuits • Customer-oriented focus • Low cost growth (fewer change orders) • Based on trust among all participants • Potential savings are returned to the Owner

  6. Planning Design Construction Design/Build Team Occupancy Typical Design/Build NEED

  7. Definition: Design/Build “Defining” Characteristic(s): (uniquely defines it from other methods) • Single Point of Responsibility “Typical” Characteristics: • Fast-Tracking Design/Construction • Preconstruction Services • Guaranteed Maximum Price/ Schedule

  8. “Which” Design-Build?!

  9. Four Primary Types of Design-Build • Design-Build, Low Bid • Design-Build, Best Value Bid • Design-Build, Best Value Fees • Design-Build, Qualifications Based Selection

  10. Balance of Other Project Costs Total Project Cost What is “Price”? (must define!) By “PRICE” do they mean… • Design and Contractor’s Fees and / or General Conditions? • Fees only? • Total Design and Construction Costs? • Cost of Work (COW) • General Conditions • Contractor’s Fee Total Construction Cost • Design and Soft Costs Total Design & Construction Costs

  11. Typical Selection Types: Industry! 2A. Best Value “Bid” • Total Design & Construction Cost is a weighted selection criteria. • (Total Construction Cost weighted between 0% & 100% ) 1. Low Bid • Total Design & Construction Cost, is theonly selection criteria. (Total Construction weighted 100% ) 2B. Best Value “Proposal” • Fees and/or General Conditions are weighted; but Total Design & Construction Cost is not a weighted selection criteria • (Fees and/or General Conditions weighted between 0% & 100% ) 3. Qualifications Based Selection • Price isnot a selection criteria. • (Price weighted 0% )

  12. The Delivery Method Matrix (Stop 2) “Price” Definition Design/Build 1 contract SELECTION TYPES Qualifications? Total Design & Construction Cost 1. Low Bid No Design-Build Low Bid “Price” andother criteria in the final selection Design-Build Best Value Bid? Total Design & Construction Cost 2A. Yes Competitive Sealed Proposal - Best Value Fees, General Conditions, Contingency, Etc. “Price”= Fees / General Conditions, etc. Design-Build Best Value Proposal? 2B. Yes Qualifications Based Selection “Price” isnot a factor in the final selection criteria 3. Design-Build QBS No Yes

  13. Selection Types (GSA) 1. Sealed Bid Total Design & Construction Cost, is theonly selection criteria. (Total Construction weighted 100% ) 2A. Best Value Source Selection • Total Design & Construction Cost is a weighted selection criteria. • (Total Construction Cost weighted between 0% & 100% ) 2B. Best Value Source Selection (fees) • Fees weighted; but Total Design & Construction Cost is not a weighted selection criteria • (Fees and/or General Conditions weighted between 0% & 100%) • Note: In some cases GMP or ROM –rough order of magnitude - provided for confirmation, treated as a “pass/fail”, but not weighted as a “bid” in final selection 3. Qualifications Based Selection • Price isnot a selection criteria. (Price weighted 0%) • Note: Generally not allowed, but may be done under “Research or Prototype”

  14. GSA Delivery Options (varies by region) SELECTION TYPES (Must be Per CICA – Competition & Contracting Act) Design- Builder 1 combined contract Designer & Contractor 2 separate contracts “Price” Definition Sealed Bid “Price” only criteria for final selection Total Construction Cost D-B Sealed Bid Firm Fixed Price D-B-B Sealed Bid Firm Fixed Price 1. “Price” andother criteria in the final selection; Price = TCC Total Construction Cost (TCC) D-B-B Source Selection Firm Fixed Price D-B Source Selection Firm Fixed Price 2A. Best Value Source Selection “Price”= Fees / Genl Conditions (GMP confirmation or ROM – rough order of magnitude) Fees (or GMP confirmation or ROM – not “bid”) CMc Source Selection GMP ROM D-B Source Selection GMP 2B. CMc Source Selection GMP Qualifications Based Selection* “Price” isnot a factor in the final selection criteria*Generally not allowed - Research or Prototype only? 3. ? (Source Selection) ? D-B Source Selection No Price

  15. Design-Build: Fastest Project Delivery Method Source: Sanvido & Konchar, 1997 Design/Build “Fastest”?... Not always! …It depends on which “Design-Build”!?

  16. Comparison of Approaches-Schedule (assuming planning is doneand using a “typical” approach) Planning NEED D-B-B Low Bid or Best Value Bid Design Bid Construction Bid Bid Bid Bid Design-Build Low Bid Complete design Design Design Design-Build Best Value Bid Design/Construction Construction Construction Complete design Design-Build Best Value (fees) or QBS

  17. Comparison of Approaches-Schedule (assuming planning is done and design is through design development) Planning NEED D-B-B Low Bid or Best Value Bid Design Bid Construction Bid Bid Design-Build Low Bid or Best Value Bid (Bridging) Design Design-Build Best Value (fees) or QBS Design/Construction Design/Construction

  18. Design-Build by Procurement Source: Michael J. Horman, John I. Messner & Marwa El Wardani Penn State University, 2004

  19. Design-Build by Procurement ? Source: Michael J. Horman, John I. Messner & Marwa El Wardani Penn State University, 2004

  20. Comparison of Approaches-Schedule (assuming planning is doneand using a “typical” approach) Planning NEED D-B-B Low Bid or Best Value Bid Design Bid Construction Bid Bid Bid Bid Design-Build Low Bid Complete design Design Design Design-Build Best Value Bid Design/Construction Construction Construction Complete design Design-Build Best Value (fees) or QBS

  21. Design-Build by Procurement √ √ √ ? Source: Michael J. Horman, John I. Messner & Marwa El Wardani Penn State University, 2004

  22. Design-Build: Procurement Matters! Source: Michael J. Horman, John I. Messner & Marwa El Wardani Penn State University, 2004

  23. “Design-Build”: What else is different based on the selection type?

  24. Bridging

  25. Best Value: “Solution” Based vs. “Cost” Based

  26. Best Practices for Best Value Selections Item No. #2927(digital download available at www.agc.org)

  27. Fast Tracking vs. Flash Tracking (“Warp Speed”) Planning Design Construction Occupancy NEED Fast Tracking Planning Flash Tracking Design Construction Occupancy

  28. Comparison of Design-Build “What else is different?” Planning NEED Design-Build Low Bid Complete design Bid Bid Bid Design-Build Best Value Bid Complete design Design Design Design-Build Best Value (fees) or QBS Design/Construction Construction Construction

  29. “Design-Build”: What else is different based on the selection type? Process, required information, contracts, administration, relationship, open book vs. closed book, quality inspection…

  30. Planning Bid Bid Bid Design Prepare Bridging Construction Design Construction Fastest?: D-B Bridging vs. CMc (CMR) NEED D-B Bridging Occupancy Planning CMc (CM at-Risk) Occupancy

  31. DBIA Projection Source: Design-Build Institute of America website, www.dbia.org

  32. Primary issues surveyed include role of A/E and ‘C’, collaboration, commissioning, sustainability, and delivery methods 6th Annual FMI/CMAA Survey of Owners

  33. 6th Annual FMI/CMAA Survey of Owners

  34. 6th Annual FMI/CMAA Survey of Owners

  35. 6th Annual FMI/CMAA Survey of Owners

  36. Total Revenue by Project Delivery Source: ENR Top 100 Firms Ranking

  37. Camp Williams: Over $1 Billion D-B Bridging vs. ECI Bid Bid Complete Design Construction Design Construction Occupancy NEED D-B Bridging Prepare Bridging 2012 ? 2013? August, 2009 1Q 2010 Occupancy ECI (CM at-Risk) July, 2011

  38. A Checklist: Design-Build?...things to consider • Fast-Tracking? (Yes or No?) • Bridging? (Yes or No) • Entity? (Integrated, Contractor or Designer Led?) • Selection Type?! (Low Bid, Best Value Bid, Best Value Fees or QBS)

  39. Design-Build, Low Bid? • Design-Build, Best Value Bid? • Design-Build, Best Value Fees? • Design-Build, Qualifications Based Selection? Which Design-Build?!

  40. Design Build Textbook Figure 9.2.1 Page 171

  41. Did yousay design-build? Michael Kenig mkenig@holder.com Holder Construction Company November 5, 2009

  42. Comparison of Approaches-Schedule D-B-B Low Bid or Best Value Bid Planning NEED Design Bid Construction Design-Build Low Bid or Best Value Bid (Bridging) Bid Bid Bid Bid Bid Design Design-Build Best Value (fees) or QBS Construction Design Design/Construction Design/Construction Multi-Party IPD QBS Precon