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DESCRIPTION
John Doller of Carollo Engineers discusses the procurement process as it relates to design-build projects at the American Water Works Association's ACE13 Annual Conference & Exposition.
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DESIGN-BUILD PROCUREMENT APPROACHES
John D. Doller, P.E. Carollo Engineers, Inc.
Agenda
• Procurement Goals
• Evaluation Options
• Types of Procurement
• Considerations for Selection of Procurement Type
Procurement Goals
• Attract the best competition from the qualified DB teams
• Obtain an acceptable market price for DB services
• Obtain acceptable contract terms to meet Owner’s project objectives with acceptable risk allocation
Evaluation Options
Qualifications Cost
Evaluation Options
Qualifications Cost
Qualifications Based Selection
Price Based Selection Best Value Selection
Design-Build Procurement Approaches
Design-Builder is selected based on Qualifications
alone.
RFQ A price for the project is developed
at a specified level of design and could be GMP or Lump Sum
Qualifications Based Selection
Design-Build Procurement Approaches
Design-Builder is selected based on price alone
(i.e. lowest responsive price)
RFP
(requires some level of design)
Qualifications Based Selection
Price Based Selection
Design-Build Procurement Approaches
Design-Builder is selected based on a
combination of qualifications and
price
RFP or RFQ&RFP
Qualifications Based Selection
Price Based Selection
Best Value Selection
Qualifications Based Selection
ADVANTAGES • Reduces procurement time and cost
• Most qualified Design-Builder is selected
• High degree of Owner control
• Owner defines/negotiates scope, quality, price and schedule
Project Definition
Predesign Final Design
Construction Startup
Qualifications Based Selection
DISADVANTAGES
• May not be legally permissible
• Is counter to “public low bid” psyche
• Could be “tough sell”
• May need to engage a procurement advisor
Project Definition
Predesign Final Design
Construction Startup
Qualifications Based Selection
QUALITATIVE CONSIDERATIONS * Qualifications * Experience
* Technical Approach * Management Approach
* Risk Allocation * Key Personnel
* Team Organization * Schedule Control
* QA/QC Approach * Insurance / Bonding
Project Definition
Predesign Final Design
Construction Startup
Price Based Selection
ADVANTAGES
• Price certainty at time of proposal submission
• Detailed technical information provided
Project Definition
Predesign Final Design
Construction Startup
Price Based Selection
DISADVANTAGES
• Large time investment in procurement
• Greater effort to review proposals
• Owner input only during procurement development
• Life-cycle cost considerations limited
Project Definition
Predesign Final Design
Construction Startup
Price Based Selection
Predesign Final Design
Performance Based Prescriptive Based
INNOVATION CONTROL
Performance vs. Prescriptive
Predesign Final Design
Performance Based Prescriptive Based
INNOVATION CONTROL
Performance Based Prescriptive Based
• Maximum potential for cost savings through innovation
• Maximum transfer of design-related performance risk
• Relatively low costs to prepare RFP / Proposal
• Substantial control over project design and O&M costs
• Proposal selection can emphasize project design build costs
• High level of project definition at time contract is signed
ADVANTAGES
Performance vs. Prescriptive
Predesign Final Design
Performance Based Prescriptive Based
INNOVATION CONTROL
Performance Based Prescriptive Based
• May result in higher O&M costs
• Proposal evaluation and selection is more complex
• Potential for decreased participation due to higher preparation costs
• Limited Owner input into design after proposal is accepted
• Procurement duration is longer
• RFP preparation is more costly due to high level of design
• Design risk not clearly assumed by the Design- Builder
DISADVANTAGES
Best Value Selection
Cost Qualifications
ADVANTAGES
• Price certainty at time of proposal submission (maybe)
• Detailed technical/qualifications information provided
• Depending upon cost component – collaboration can still exist
Best Value Selection
Best Value Selection
Cost Qualifications
DISADVANTAGES • Large time investment in procurement
• Greater effort to review proposals
• Life-cycle cost considerations limited
Best Value Selection
Weighting Costs and Quals
Progressive D-B
Progressive Design-Build In a progressive design-build procurement, the design-builder is selected primarily based on qualifications before substantial design is completed. Together, the owner and the design-build team advance the design, incorporating the details desired by the owner and providing the owner with cost input regarding options the owner is considering. This open-book approach enables the owner to make well-informed decisions on the overall quality of the project. (Chapter 3, page 25)
Progressive Design-Build
Design/Builder
Design Development and Construction Design Definition
Owner
PM/OA
100% Guaranteed maximum price established at the right time: Risk and contingency reduced, schedule needs met
Construction estimating can start very early in design, allowing comparison of specific technical solutions
First fully detailed estimate can be used to establish a scope baseline. Estimating process is “open book”
“Progressive” estimates keep owners informed and support-informed scope adjustment decisions
Owners can use third-parties to verify cost . . . . . . and go to the hard-bid market if needed (the “off-ramp”)
Progressive Design-Build
Design/Builder
Design Development and Construction Design Definition
Owner
PM/OA
100%
• Investment in projects, not procurements
• Offers owners maximum flexibility/opportunity to collaborate on design/permitting
• Minimizes overall schedule
• Owners have an “off-ramp” in case of permitting issues or if GMP can’t be negotiated
• Very successful evolving model
Considerations for Selecting Procurement Approach
• Project Goals and Objectives
• Legal Feasibility
• Level of Design Definition
www.waterdesignbuild.org
www.awwa.org
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