Design-Build Procurement Approaches
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DESIGN-BUILD PROCUREMENT APPROACHES
John D. Doller, P.E. Carollo Engineers, Inc.
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Agenda
• Procurement Goals
• Evaluation Options
• Types of Procurement
• Considerations for Selection of Procurement Type
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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
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Evaluation Options
Qualifications Cost
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Evaluation Options
Qualifications Cost
Qualifications Based Selection
Price Based Selection Best Value Selection
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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
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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
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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
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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
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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
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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
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Price Based Selection
ADVANTAGES
• Price certainty at time of proposal submission
• Detailed technical information provided
Project Definition
Predesign Final Design
Construction Startup
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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
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Price Based Selection
Predesign Final Design
Performance Based Prescriptive Based
INNOVATION CONTROL
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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
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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
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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
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Best Value Selection
Cost Qualifications
DISADVANTAGES • Large time investment in procurement
• Greater effort to review proposals
• Life-cycle cost considerations limited
Best Value Selection
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Weighting Costs and Quals
Progressive D-B
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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)
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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”)
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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
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Considerations for Selecting Procurement Approach
• Project Goals and Objectives
• Legal Feasibility
• Level of Design Definition
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www.waterdesignbuild.org
www.awwa.org
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