Transcript Innovative Contracting

Innovative Contracting
UDOT
Director of Construction
and Materials
Kris Peterson
Innovative Contracting Works
to Improve the Process
Reduce impact to public
Reduce overall project time
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Limits Schedule Growth
Reduce overall project cost
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Limits Cost Growth
Types of Innovative
Contracting
Contract Manager / General Contractor
(CMGC or CM@Risk)
Design-Build
A + B Bidding
Lane Rental
Warranties
Incentives
Performance-based
Timeline Comparison
Advertise
Select
CMGC
Open Bid
Negotiate
NTP
Design
Bid
Build
Advertise
Select
NTP
Advertise
Select
NTP
Design Build
B2
B1
Bn
CMGC/DB
Advertise Open Bid
Select Negotiate
NTP
Design Phase
Open Bid
Negotiate
NTP
Open Bid
Negotiate
NTP
Construct Phase
Why Innovative Contracting
CMGC Roles
Plan
UDOT
Design
Design
Consult
Contractor
Negotiate
UDOT
Build
Bid
Build
Contractor
Lessons Learned
CMGC Benefits
UDOT Controls Design
UDOT Selects Innovation
Why Innovative Contracting
Other CMGC Benefits / Risks
Benefits
Reduces design time
and design errors
Improves
constructability
Identifies and
reduces risk
Early procurement
Lower cost
Risks
Sole source contract
 Bid price needs to
be 10% of EE or
below
Negotiation skills
Reduce Risk to
Reduce Cost &
Increase Profit
Risk
Contractor Risk
Owner Risk
DBB
DB
CMGC
Why Innovative Contracting
Selection Strategy
Select complex projects
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That benefit from contractor input
With third-party risk
That need innovation
Need early procurement
Select projects with a budget emphasis
Take time for design
CMGC Requires Approval
Experimental Process - SEP 14
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12 Federal Projects per year
12 State Projects per year
Justification required
Project Development approves
FHWA must also approve federal
projects
Contracting Process
Develop RPF
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Selection Criteria
Price components
Advertise
Selection team
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Complex participants
Region participants
AGC and ACEC representatives
Select & Award
Processing Time
Design Phase
Acquire Designer
9-10 weeks
Select
Contractor
14-16 weeks
No
Indepen
dent ?
Plan Project
Phases
3-5 weeks
Region recommends
Multiple phases to
Project Development
Yes
Yes
Designers &
Contractor
Design Phases
Multiple
Phases
No
Designers &
Contractor
Design Project
Price Benefits
Brings cost accountability to the table
Brings cost competition to the table
Brings cost innovation to the table
Provides validation of good price for
public trust
Where are we going?
Price in CMGC RFP
Price
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Continue to use the average target
 Most realist cost
Approach to Price
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Emphasize during pre-proposal
Change the format
Where are we going?
Utah CMGC Projects (State)
Where are we going?
Utah CMGC Projects (Federal)
Design Build
Plan
UDOT
Design
Design
Consultant
Contractor
Build
Build
Phase 1 Phase 2
Build
Phase n
Design-build
Benefits
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Faster Design/Construction
Smaller cost growth
Smaller schedule growth
Innovation (Contractor controlled)
Risks:
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Design-build is built for speed
Contractor owns the design
Design Build Advertising
Process
Letter of Intent (Interest) LOI
RFQ
RFP
Low-Bid
Best-Value
Checklists
Located on the 2008 Standards /
Checklists website
http://www.udot.utah.gov/Inside UDOT/Project
Development/Standards and Specifications
/2008 Standards/2008 Project Checklists
Selection Committee
SO
Selection Official
(Projects above $100M)
PEB
Proposal Evaluation
Board
PEB Consists of:
Program Manager (Chair)
Project Manager
Region Functional Manager
Central Construction
Innovative Contracting Engineer
CMG
Contracts Management
Group
TEB Consists of:
Project Manager (Chair)
AGC Representative (if available)
ACEC Representative (if available)
TEB
Technical Evaluation
Board
TA
Technical Advisors
PET
Price Evaluation Team
Reduce Time on Project
A+B Bidding
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Contractors bid the
time to complete the
project and a dollar
amount for work
items
Award to lowest
combinations of time
and cost
Lane-Rental
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Minimize the time
lanes are closed
Contractors are
charged a fee for
closing lanes and
shoulders
Focus on time the
public is affected
A + B Bidding
Benefits:
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Improved coordination between prime and sub-contractors
Reduced construction time minimizes impacts to users
Contractors are required to put together a well conceived
schedule
Drawbacks :
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Contract changes are magnified; too many changes nullify
the advantages of A+B
Acceleration techniques may require more resources for
contract administration
More hours and over-time budget required from Region
staff
Negotiations for additional work are more intense since
time is a bigger issue
A+B Candidates
Good:
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Interstate Projects
Mill and Overlays
Projects with Detours
Bridge Painting
Intersection upgrades
New Construction/Reconstruction
Bad:
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Third-party delays
Rehabilitations
Lane Rental
Benefits:
– Better coordination of prime and sub-contractors
– Minimized impact to traveling public
– Better public perception due to fewer un-utilized lane
closures
Drawbacks:
– Extra effort by staff to monitor lane rental
– Negotiating lane rental adjustments can be difficult with
contract changes
– Potential added costs to the project
Lane Rental Candidates
Good:
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Mill and Overlay (2-lane roads with flagging
ops. or intersection impacts)
Safety projects
(guardrail/signing/striping/bridge painting)
Bad:
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New construction
Long-term projects
Warranties
Guarantee all or portions of a
construction project
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Free of defects in material
Workmanship
Time Period
Correct deficiencies during warranty
period
Warranty Pros and Cons
Benefits
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Quality and durability
guaranteed
Longer acceptance
time
Less inspection
needed
Drawbacks
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Owner must ensure
warranty
Warranty may not be
collectable
Staffing to monitor
warranty
Incentives - Disincentives
Paid for early completions
Penalized for late completions
I & D Pros and Cons
Benefits
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Reduced
construction time
May lower contract
admin costs
PI benefits
Control of project
acceleration
Drawbacks
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May require
additional funding
Contract changes
may lead to disputes
Pay-for-Performance
Pay is dependent upon final outcome
Measured against performance criteria
Set by contract
Pay withheld for poor performance
Corrective action required
PFP Pros and Cons
Benefits
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Eliminates blame
Shifts risk to
contractor
Higher quality
Drawbacks
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Time to measure
performance
Long project closeout
Monitoring is timeconsuming
Contractor may have
to finance a portion
Innovative Web Site
www.dot.state.mn.us/const/tools/docm
ents/Guidelines.pdf
Dec 2005