How to Estimate and Bid Design Build ProjectsSeptember 13, 2016

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Agenda

Description of Central 70 Project Who are Kiewit-Meridiam Partners Description and benefits of the Design-Build Delivery

Method Guiding principles, tools and processes for estimating Group exercise - mock estimate/bid Bid results Bidding strategies and philosophies Design Management / Review Process KMP process moving forward

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Description of Central 70 Project

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Central 70 Project

Wideningw/ mill and overlay

Quebec to Chambers~5 Miles

Colorado to Quebec~2 Miles

Brighton to

Colorado~1.5 Miles

I-25 toBrighton

~1.25 Miles

Full ReconstructLowered SectionRestripe

O&M Limits Beyond

Construction

Chambers to Tower~2.2 Miles

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Who are Kiewit-Meridiam Partners

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Team Organization

Equity MembersDeveloper

Project Agreement

Lead Contractor

Lead Engineer

Lead Operator

DB Contract O&M Contract

Interface Agreement

Design Sub

Life cycle responsibilities

60%

40%

Self-Perform

Design Contract

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Who is meridiam?

Meridiam: A global investor and asset manager Has a business model built exclusively on

equity financing of projects Meridiam develops, finances, builds and

manages various types of projects:• Transport infrastructure• Social infrastructure• Public buildings• Utility networks and services

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Who are PB, Jacobs and Jorgensen

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Who is Kiewit?

One of North America’s largest and most admired engineering and construction companies

Consistently among the top 10 of Engineering News-Record’s Top 400 Contractors

FORTUNE 500 company with revenues over $9billion

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International Presence but Locally Centered

Central District

Heavy Civil• Mass grading• Drainage• Bridge construction• Paving• Rail

Current Local Projects• I-225 Rail Line• Denver VA Medical Center• US 34 Permanent Repairs• WISE Water Treatment• RiNo IC Contract

Kiewit Building Group

Commercial Buildings• Medical Office Buildings• Special Use Facilities• Higher Education• Office

Current Local Projects• I-225 Rail Line• Denver VA Medical Center• Olde Town Transit Hub• SCL Hospital Aurora• SCL Hospital Northglenn• UCCS

Mass Electric

Transit /Light Rail • Signal, overhead contact

systems (catenary)• Traction power• Communications systems

Current Local Projects• I-225 Light Rail• RTD On Call Services

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Description and Benefits of the Design-Build Delivery Method

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Why Do a Workshop?

Market is trending towards Design-Build Project Delivery Method

87% of Kiewit’s current backlog of work are Design-Build Projects

We need subs/suppliers to work with us on these projects

We want to provide training to help small subcontractors build capacity to become more competitive

We have received feedback that subs/suppliers are not comfortable with Design-Build estimating

Goal - Understand the Design-Build estimating and bid process

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What is a DBFOM?

Overview• DBFOM: Design Build Finance Operate and Maintain • CDOT maintains ownership of the Project

• All aspects of procurement are transferred to the private sector

• During Construction, the Developer is paid milestone payments for a portion of construction costs

• Over the remaining life of the Project, the Developer is paid performance payments (i.e. fixed yearly fee)

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What is a DBFOM?

Benefits• Single point of procurement• Budget certainty for the State: CDOT knows exactly how

much the payments are for the life of the Project • Workforce Opportunities: The Developer will utilize many

services from local businesses and provides hundreds of jobs over the 30 year term

• Cost Certainty: The Developer has increased responsibilities for design, construction, maintenance, and rehabilitation limiting the risk of cost overrun

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Team Organization

Equity MembersDeveloper

Project Agreement

Lead Contractor

Lead Engineer

Lead Operator

DB Contract O&M Contract

Interface Agreement

Design Sub

Life cycle responsibilities

60%

40%

Self-Perform

Design Contract

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Types of Project Delivery Methods - DBB

Traditional - Design Bid Build• Separate design and construction firms• Projects are fully designed before released for bid• Bids are on known scope of work• Construction schedule already determined

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Types of Project Delivery Methods – DB

Design-Build• Design-Build: a single entity is responsible for both designing

and building the project• Projects are designed to initial levels usually 30%• Bids are made on projected design• Construction schedule determined as design is developed

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Why Do Owners Use Design Build?

Benefits Risk/DisadvantageTraditional Design-Bid-Build

• Orderly progression of work• Multiple, competitive procurements• Substantial design control by Owner

• Increased project delivery time• Final total cost uncertainty• Multiple contracts managed by Owner

Design-Build

• Faster completion schedule• Project risks assumed by design-

builder • Innovation through designer /

constructor cooperation•Cost savings - constructability and

value engineering• Improved Quality and Project

Performance – schedule and budget

• Limited design control by Owner• Fixed project definition early

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Guiding Principles, Tools and Processes for Estimating

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Design-Build Estimate – Tools / Processes

Know what you are estimating Have the plans and a clear understanding of the scope Have your estimating data ready

• Direct labor costs / labor escalation• Staff / overhead / office – storage • Insurance / contingency / bonding• Material pricing / escalation / sales tax• Risk analysis• Equipment pricing / taxes• Fuel / taxes• Other subcontractors

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Group Exercise

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Estimating / Bid Exercise

Estimating Wall at 30% Design• As a team develop estimate• Drawings and takeoffs provided• Pre-Bid Meeting after 15 minutes• Use provided sample estimating reference information• Submit Bid in 55 minutes!

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Estimating / Bid Exercise

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Bid Results

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RFC Drawing Review / Estimate Review

What additional/different questions would you have asked at the pre-bid conference?

Did you miss something?Did you include items you did not need?Did you include the appropriate amounts for

• Contingency• Escalation• Profit

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Bidding Strategies and Philosophies

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Bidding Strategies / Philosophies

Bid from accurate past costs Best value vs. low price Risk sharing Escalation – tied to applicable indexes Early procurement of materials or equipment Knowing the market

• How much fee to apply• How many other bidders there are• Who is your competition

Bring your Resume – sell yourself• Safety record• Quality program• Schedule performance history• Tenure of team• Level of commitment to job

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Design Management / Review Process

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Design Management / Review Process – Post Bid

Design review process Constructability reviews Attend pre-bid meetings and open houses Attend task force meetings with Designer+Owner+City+GC

• Provide input that will facilitate your work Provide comments on drawings and specification

progress packages at 60% and 90% Review quantity takeoff of drawings to ensure design

growth is controlled Review specified products to ensure you budgeted for

them Provide pricing for change orders

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KMP process moving forward

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CDOT’s Current Project Schedule

Financial Proposals Due, July 2017

Technical Proposal Due, May 2017

Final RFP, March 2017

ROD, January 2017

Fourth Draft RFP,October 2016

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KMP’s Projected Timeline