Alternative Project Delivery Methods October 2014

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Presenters

• Albert Thomas

– American Council of Engineering Companies New Mexico

• Elias Archuleta

– New Mexico Department of Transportation

• Adam Triolo

– Associated Contractors of New Mexico

• Robert Ortiz

– American Council of Engineering Companies New Mexico 2

Presentation Outline

• Introduction & Background – Need to Investigate Alternative Project Delivery Methods – Current Procurement Code & Bidding Strategies – Goals & Objectives • Design-Build Method of Project Delivery • CMGC Method of Project Delivery • Job Order Contracting Method of Project Delivery • Next Steps 3

Need for Alternative Project Delivery Methods

• Rising costs of construction • Greater public demands • Current Procurement Code has limitations • Seek opportunities to improve flexibility, cost

effectiveness, and speed of delivery

KEY: Alternative Project Delivery is not intended to prescribe or mandate a particular method as the norm, but offers additional TOOLS to draw upon for unique circumstances.

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Current New Mexico Procurement Code Limitations

• Mandates Low Bid Procurement – No flexibility to use other procurement methods – Award to lowest responsive bid – Lowest bid not always Best Value or Highest Quality • Specifications – Tend to be Prescriptive-Based vs. Performance-Based • Design-Build exempts Highway Construction – Limited experience via Special Legislative Approval • CMAR Procurement for Vertical Construction 5

NMDOT Current Experience with Bidding Strategies

• Lowest Responsive Bid – Bid Alternatives; however limited in applying additive or deductive components – A + B (Value + Time) – Lane Rental – Disincentive (Liquidated Damages) – Incentive (contract time) • Limited Design-Build – 4 Legislative Approved Projects 6

Goals for Alternative Delivery

• Partnership between NMDOT, ACEC NM, and ACNM

to develop a proposal that could be legislated to allow for Alternative Project Delivery Methods in New Mexico’s Transportation Industry

– Becomes an industry initiative not solely a DOT initiative – Not limited to Design-Build; also includes CMGC and Job Order Contracting (JOC) – Offers alternative strategies to be used, not as the norm, but as available tools for unique circumstances – Educate Industry and Governmental Agencies on use of Alternative Project Delivery Methods 7

Design-Build Elias Archuleta NMDOT

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Design-Build

• DB requires Legislative authority • Owner provides Preliminary Design (approx. 30%) • Contractor provides final design and construction

services.

• Criteria for use of DB • Qualifications-based selection process. • Risk transferred from Owner to Contractor – Contractor is responsible for the design of the project as

well as the construction.

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Design-Build

• Two-Step Procurement Process • First Step – Submittal of Statements of Qualifications

(SOQ)

• • • Open to any prospective contractor/design team SOQs are evaluated by the evaluation teams and selection committee Selection committee determines a short list of two to four teams based on the evaluation of the SOQs 10

Design-Build

• Two-Step Procurement Process (continued) • Second Step – Request for Proposals (RFP) • • • • • Short List - Short listed teams are provided with RFP Proposal Development - The DB teams then develop the final design Stipend - A stipend may be provided Evaluation - The proposals are evaluated on qualifications and price separately. Determination - the selection committee makes a determination on a Best Value selection, generally 50% quality and 50% price.

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Design-Build

• When should Design-Build be used? • Projects where the Department can adequately define the project requirements and expectations • Projects with time constraints • Projects with funding/cost constraints • Project constraints conducive to D/B • Location / Size / Performance Requirements • Projects where the Owner can adequately manage and oversee the project • employment of experienced personnel or outside consultants 12

Design-Build

• NM 528 Widening, Rio Rancho •

2.3 mile Urban Widening Project with Drainage and Landscaping Improvements

• Roadway: Widen existing NM 528 to 8 lanes between Coors By-Pass and Sara Rd. and 6 lanes from Sara Rd. to Southern Blvd.

• • • • Drainage: Construct new 96” storm drain to replace the existing open channel Landscaping (funded by Intel): Enhance landscaping throughout the corridor

Project Cost: $21 million

• Public Private Partnership: NMDOT 50%, City of Rio Rancho 25%, Intel 25%

Schedule: Project completed in 10 months

• Project was completed 2 months ahead of original schedule • Design-Build allowed the project to be completed approximately 15 months sooner than traditional Design/Bid/Build • Indirect savings to motorists: Over 1 million hours of vehicle delay with an estimated loss of productive time of $12 million 13

Design-Build

• US 70 Hondo Valley •

37.5 mile Rural/Small Urban Widening Project with Safety and Access Improvements

• Roadway: Widen existing US 70 to 4 lanes through the Hondo Valley (Riverside to Ruidoso Downs) • • • • Safety: Correct deficient roadway geometry, improve intersections, flatten slopes, install barriers Access: Consolidate driveways and improve sight distance conditions at driveways

Project Cost: $130 million Schedule:

• Although the project was delayed due to lawsuits filed by the Valley Community Preservation Committee, the project progressed well once these issues were settled. Innovations such as Programmatic Agreement with SHPO and a modified ROW acquisition process resulted in an expedited project delivery time.

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Design-Build

• I-40/Coors Interchange Reconstruction, ABQ •

2.0 Miles Urban Interchange with a grade separation of a surface street and pedestrian improvements

• Roadway: Construct three-level interchange of I-40 & Coors Blvd. with multiple ramps and bridges at I-40 and Coors • • • • Grade Separation: Grade separate Coors Blvd. at Ouray Rd.

Pedestrian Improvements: Construct two pedestrian bridges

Project Cost: $90 million

• Project Bid for $85 million and delivered for a cost of $90 million due to additions to the project requested by the City and DOT • Design-Builder’s bid and ideas to modify the interchange design resulted in a savings of $10 million that would likely have been designed and constructed into a typical Design/Bid/Build (low bid).

Schedule: Project completed in 18 months

• Project completed 1 month ahead of original schedule • Indirect savings to motorists: Over 2 million hours of vehicle delay with an estimated loss of productive time of $20 million 15

Design-Build

• New Mexico Rail Runner, Phase II •

18-mile Commuter Train Extension Project, Bernalillo to Santa Fe

• Railway: 18 miles of new rail from bottom of La Bajada Hill to Santa Fe, connecting new rail to existing. Include upgrades to existing track from St. Francis Dr. to the Santa Fe Rail Yard • • • Structural: Construct six new bridges, six load transfer structures, and 1,000 ft. concrete box for rail

Project Cost: $128 million Schedule: Project Completed in 16 months

• On a project of this size, it would normally take about three years to obtain a completed design package that would be ready to be advertised for construction using the Design/Bid/Build process • It would have then have taken about two years to construct the project 16

Design-Build

• I-25/Paseo del Norte Interchange Reconstruction •

Reconstruction of Interchange & Grade Separation of Paseo del Norte

• Roadway: Reconstruct interchange, construct directional ramp, grade separate Paseo from I-25 to rail spur, partial lyreconstruct ramps at San Antonio and San Mateo • • •

Project Cost: $75 million Schedule: Expected Completion, December 2014

• Project on Schedule: Design 99% complete, Construction 50% complete

Changes to Process

• Implemented Alternative Technical Concept process during the RFP stage 17

Construction Manager General Contractor

(CMGC) Adam Triolo ACNM

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CMGC

• What is the delivery method?

CMGC Bid / Explain / Build Client or Owner Bid Build Contractor Designer Phase One: A “Construction Management” consulting contract to help with design.

Phase Two: A “General Contracting” contract to build the project .

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CMGC

• Advantages

Improved team integration Transparent estimating process avoids conflicts later Risks identified and mitigation plans prepared early Cost and schedule certainty CMGC/CMAR BENEFITS Early planning improves ability to resource craft/staff needs Risks assigned to party best suited to manage Improved cost and schedule performance

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CMGC

• Disadvantages • Culture – New process for Client/Owner staff (Open Minded Approach) • History – Still a new method of procurement for heavy civil highway projects • Client – Perception that they are not getting the best price for the work 21

CMGC

• The Procurement Process

PRE-CONSTRUCTION Typical Timeline Representation NEGOTIATION

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CMGC

• Risk Contractors Client/Owners

DBB CMGC DB

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CMGC

• When should this delivery method be used? • Projects with Time or Funding contraints • Many stakeholders involved • Project or design has unique construction elements • Help with phasing, defined schedule, and construction process • Public impact and safety 24

CMGC

• CDOT Example

Opportunity and Obstacles /Project Risk Assessment Discussion Checklists

• Delivery schedule • Project complexity and innovation • Level of design • Cost • Site conditions and investigations • Utilities • Drainage/water quality • Environmental • Staff experience/availability • Level of oversight and control • Competition and Contractor experience 25

CMGC

• Other States – Outcomes • Other states’ DOTs adopting and adapting • Finding successes with procurement model

State Project Shortlist Self Preform % % Proposal % Price AZ FL UT NV WA AK CO WA TX Sky Harbor Orlando Intermodal SR-14 McCarron Sound Transit Tanana Bridge I-70 and Pecos TriMet Tex Rail YES YES NO YES NO NO NO NO YES 45% Defined by CMGC/CMAR 50% 25% 30% 70% 70% Defined by CMGC/CMAR Defined by CMGC/CMAR 100% 100% 70% 100% 60% 85% 60% 70% 75% 0% 0% 30% 20% 20% 15% 20% 30% 25% Interview % 100% Plus/Minus Optional 80% 20% N/A 20% Plus/Minus N/A

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Job Order Contracting (JOC) Robert Ortiz ACEC NM

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Job Order Contracting

• What is Job Order Contracting • Alternative to the traditional DBB method of project delivery • Best Value Quality Based Selection Process • Indefinite Delivery/Indefinite Quantity Contract – – One or more offerors One year or multiple years • Job Orders issued on On-Call, As-Needed basis • Alternative Procurement Method to get small, routine, and commonly encountered construction projects under contract easily and quickly • Close Owner/JOC Contractor working relationship • Innovation • Timely project completion 28

Job Order Contracting

• What is Job Order Contracting (continued) • IDIQ Contract (Base Contract) • • • • • • • • General Scope of Services with minimum dollar amount Includes a Unit Price Book of Items priced by Owner Contractor submits a Price Coefficient (multiplier) Contracts can include multiple Price Coefficients Work within a District Work within a County Rural/Urban Locations Work during normal working hours/night work • Owner Issue Job Orders • • Construction, Design, PreConstruction Services Job Orders – initiates the work on an On-Call basis 29

Job Order Contracting

• Why Use Job Order Contracting? • Saves Time - JOC enables Owners to initiate and complete routine construction projects quickly by eliminating the time to bid each project • Decreases project duration and cost • Potential to Increase Quality • QBS Selection Process • JOC Contractor/Owner relationship developed • Better use of Owner resources in procuring services 30

Job Order Contracting

• Contractual Relationship Owner Designer Develops Job Order Contract In-house/Consultant JOC Contractor Construction, Design, Pre-Construction Services JOC Contractor Job Order Contract Job Orders JOC Contractor 31

Job Order Contracting

• When is JOC Used • Owner’s needs include • Repetitive and routine jobs and situations • • • Small, routine, and commonly encountered construction processes Projects requiring minimal design effort Projects with a minimal risk of unknowns • Examples of Highway Construction Projects • Minor Construction, Mill and Inlay Projects, Bridge Rehab Projects, Bridge Deck Overlays, Pavement Preservation Projects, Highway Maintenance Projects • These types of projects can be done quickly and easily • Best suited for routine work with well-defined work items and governing standard specifications 32

Job Order Contracting

• JOC Procurement Process – Two Phase Process • Selection Team Appointed • Phase 1 – Request for Qualifications (RFQ) • Qualifications-Based Selection Process • Offeror must self-perform 50% at minimum • Evaluate RFQ’s and compile Short List • Phase 2 – Request for Proposals (RFP) and Interviews • Evaluate RFP’s – Best Value (Quality and Price) • Conduct Interviews • Score and Rank • Recommend Award 33

Job Order Contracting

• Procurement Process Need Identified Scope, Location, Quality & Design Criteria Selection Committee Define Selection Criteria Job Orders Issued On-Call, As-Needed Basis RFQ Quality Based RFQ Evaluation & Short List RFP Best Value Selection Quality and Cost Interview and Rank Selection and Award Single or Multiple 34

Job Order Contracting

• Advantages • Reduces Project Delivery Time • Quality of work equal to or higher than traditional procurement methods • Qualifications-based selection process, not low bid • Long-term relationship established between Owner and Contractor • Job Orders can be issued quickly • • Construction starts quickly; within 20 CD of need • Saves time and money in procurement process Minimizes staff and resources required to procure construction services on a project by project basis • Contractor can provide design services and other pre construction services as provided in contract 35

Job Order Contracting

• Disadvantages • Not conducive to large, detailed projects • Method does not accommodate work outside of original scope well • Culture Shift – • New process for NMDOT and Contractors 36

Job Order Contracting

• Is JOC Being Used Now • Used extensively for water, wastewater, building, and site maintenance work • Pennsylvania Turnpike and Arizona DOT • Pavement preventative maintenance projects • Bridge deck overlay projects • New Mexico – uses a form of JOC • Price Agreements in Hwy Maintenance • JOC allows for design or pre-construction services in support of routine projects 37

Closing Remarks/Next Steps

• Task Force (ACNM/ACEC/NMDOT) – Continue to work on and refine Alternative Project Delivery Information – Educational Program • Host Alternative Project Delivery Symposium – Involve affected Industry Groups & Stakeholders • Continue New Mexico Outreach – Regionally • Draft Legislation Language

KEY: Alternative Project Delivery is not intended to prescribe or mandate a particular method as the norm, but offers additional tools to draw upon for unique circumstances.

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Closing Remarks/Next Steps

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Thank You

• Questions?

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