Project Delivery Options in the California Construction Market CSI Fresno Chapter - February 16,...

Project Delivery Options in the California Construction MarketCSI Fresno Chapter - February 16, 2010

PROJECT DELIVERY OPTIONS in the

CALIFORNIA CONSTRUCTION MARKET

Presentation forConstruction Specifications Institute, Fresno

ChapterBy

Rick Barton, LEED AP


Overview

• During this Presentation we’ll…• Review goals towards project success• Review why various delivery methods exist• Explore various delivery methods


Goals for Project Success


Delivery Methods Overview

Agency Construction Management

Lease-Leaseback


Traditional Design-Bid-Build

• Characteristics• Detailed plans and specifications prepared in advance of bidding• Contractor bids on completed construction documents• Price-based contractor selection• Publicly funded projects governed by Public Contract Code • Most successfully used with Agency CM for large/complex projects

• Application• Traditional public sector delivery• Prescriptive scope requirements• Widely understood methodology


Traditional Design-Bid-Build

• Benefits• Clear-cut division of responsibility and accountability• Public sector comfortable with process/methodology• Well defined and detailed design• Lower cost at bid day• Owner controls change order contingency

• Drawbacks• Minimal to no control over contractor or subcontractor selection• Difficult to gain time through fast-tracking or phasing• Contractor has no incentive to contain change order costs• Potential for adversarial relationships due to conflicting goals


CM-Multiple Prime

• Characteristics• CM fulfills GC role – Agency relationship• Scope is segregated into prime packages• Owner holds contracts with prime

contractors

• Application• Common in K-12 education projects• Clear trade segregation• High concentration of one (or few) trade(s)• Sparse or hostile GC market


CM-Multiple Prime

• Benefits:• CM is an advocate for the Owner• Reduced contractor fees• Affords fast tracking of design and construction• Continuous on-site supervision for Owner

• Drawbacks:• Owner assumes more risk• Typically low bid contractor selection• More administration for multiple packages


CM At-Risk

• Characteristics• CM/GC early involvement• CM/GC typically holds subcontracts• Guaranteed Maximum Price (GMP) established at bidding• GMP typically includes change order contingency• Often open book

• Application• Popular private sector delivery• Public sector application dependent on legislation

- K-12- UC- CSU- AOC


CM At-Risk

• Benefits:• CM at Risk selection typically qualifications-based• Provides cost containment• Reduces Owner’s risk exposure• Owner-CM/GC-Designer collaboration potential• Shared savings potential

• Drawbacks:• Could result in overall increased construction cost• Owner could experience loss of advocacy once GMP is established• Requires a GC with strong in-house conceptual estimating and

management skills and experience in CM at Risk approach


Lease-Leaseback

• Characteristics• Similar to a builder-developer delivery• Owner leases property for $1/year – Builder-developer delivers project

& leases back the improvements• Quasi-private work

• Application• K-12 - Ed Code Section 17406• CCD – Ed Code Section 81335• Fee generating facilities – Gov Code 5956


Lease-Leaseback

• Benefits:• Increased control over subcontractor selection• Flexible project financing options• Flexible delivery options• Cost containment through establishing a GMP• Reduces Owner’s financial risk exposure• Shared savings potential

• Drawbacks:• New delivery – not widely understood by the industry• Highly flexible LLB statutes could lead to faulty contractual practices• More time required to develop and negotiate the LLB contracts


Design-Build

• Characteristics• Owner contracts with a single entity for design and construction• Project requirements defined through design criteria & outline

specifications• Owner may develop bridging documents through schematic design

phase

• Application• Private sector – no restrictions• Public sector

- Redevelopment Agencies- Counties- Through LLB

• Straight forward scope- Parking structures- Storage facilities


Design-Build

• Benefits• Single point of responsibility and accountability• Owner shielded from most disputes between architect and contractor• Accommodates accelerated project delivery• Early establishment of fixed cost and limited potential for change orders• Promotes non-adversarial team environment• Heavy contractor involvement and freedom to recommend construction

efficiencies and innovations

• Drawbacks• Success is contingent upon Owner’s ability to clearly define design

criteria• Owner may have less control over the end result


• Characteristics• Program manager acts as extension of Owner’s staff• Typically used in carrying out multi-project capital programs• PM establishes program-wide budgets, schedules, standards, etc.• PM assists Owner in hiring consultants – typically in a prequalified

resource pool• Individual projects are delivered in a variety of ways

• Application• Multi-project capital programs

Program Management


Program Management

• Benefits• Provides needed assistance to Owners with limited staff, expertise or

time• Provides specialized management tools, systems and skills to enable

sound decisions early• Can set design standards to achieve consistency• Can coordinate and accelerate project delivery• Owner can realize economies of scale through combining smaller

projects• Lessons learned from one project more easily transfer to subsequent

projects

• Drawbacks• Perception of additional cost of PM fees; although, must be compared to

maintaining owner staff positions


Integrated Project Delivery (Lean)

• Characteristics• Joint Owner-Architect-Contractor

agreement• Shared risk-reward• Modeled after Toyota mfg processes• Early subcontractor involvement• Decentralized decision making• Heavy use of technology – BIM• Maximize prefabrication

• Application• Emerging private sector delivery• Current bidding laws limit public sector

application

Integrated Agreement for Lean Project Delivery Between Owner, Architect & CM/GC RD_____

AGREEMENT made as of the ___ day of ________ in the year Two Thousand and _____

Architect:

Telephone:_______________

Facsimile:________________

CM/GC:

Telephone:______________

Facsimile:_________________

Owner:

Telephone:_______________

Facsimile:_______________

Integrated Agreement for Lean Project Delivery Between Owner, Architect & CM/GC RD_____

AGREEMENT made as of the ___ day of ________ in the year Two Thousand and _____

Architect:

Telephone:_______________

Facsimile:________________

CM/GC:

Telephone:______________

Facsimile:_________________

Owner:

Telephone:_______________

Facsimile:_______________


Integrated Project Delivery (Lean)

• Benefits• Highly collaborative• Shared risk-reward creates performance incentives• Innovation encouraged

• Drawbacks• New delivery – Not well understood• Interdependent lines of responsibility• Limited public sector application

M/E/P

Cluster Leaders

Structure

Landscape

Material Handling

Vertica

l Transp

Site Improvements

Interior/ Finishes

Building Envelope


Q & A

Project Delivery Options in the California Construction Market CSI Fresno Chapter - February 16,...

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