AWWA IMS Leadership Forum Project Delivery Systems June 9, 2016 Phil Sudol Alan Domonoske

Project Delivery Timeline The Master Builder Project Delivery Timeline Programing Programming Design Design Construction Construction Commissioning Commissioning Closeout Regulatory Agencies Maintenance End Users Finance Council Building Department Operations Stakeholders Owner Master Builder Stone Mason Owner Concrete Electrical Mechanical Structural Steel I&C Yard piping HVAC Landscape Architect Electrical Engineer Mechanical Civil Engineer Structural Life Safety Consultant Geo Tech Master Builder Trade Contractors Design Consultants Stone Mason

Collaboration & Communication Core Team Communication Project Team Collaboration & Communication Core Team Communication Stakeholders End Users Regulatory Agencies Council Finance Building Department Maintenance Operations Owner Concrete Geo Tech Builder Designer Structural Steel Life Safety Consultant Subcontractors Subconsultants I&C Landscape Architect Electrical Structural Engineer Mechanical Electrical Engineer Mechanical Engineer Yard Piping Civil Engineer HVAC

Integrate the Collaboration Collaboration & Integration Collaboration is where individuals of the project team regardless of discipline shares information directly with another individual of the project team working toward a common set of project outcomes. Integration is where an individual of the project team regardless of discipline can share the collaborative information in a way that the entire project team can utilize the same information toward a common set of project outcomes. Owner Builder Designer End Users Regulatory Agencies Council Finance Building Department Maintenance Operations Owner Builder Designer Concrete Geo Tech Structural Steel Exceptional Project Outcome Integrate the Collaboration Life Safety Consultant I&C Landscape Architect Electrical Structural Engineer Mechanical Electrical Engineer Mechanical Engineer Yard Piping Project Team Civil Engineer HVAC

Delivering an Exceptional Project Quality Cost

Delivering an Exceptional Project Quality Cost Exceptional Project

Spectrum of Delivery Methods Integrated Project Delivery (IPD) Design-Bid-Build Design-Build (DB) DBO DBFO DBFOO Public-Private-Partnership (P3) CMAR

Industry Trends Suggest Continued Use of IPD

Average Value of New Contracts

Prevalence of Industry Contracts

Reasons Owners Choose Design/Build

Delivery Methods Intergated Delivery Methods Basic Delivery Construction Management at Risk (CMAR) “Progressive” Design-Build (GMP) Fixed-Price Design-Build (FP) Design-Build- Operate/ Finance, etc. Design-Bid-Build (DBB)

Design-Bid-Build (DBB) Method Legend Working Relationship Contractual Relationship Owner Alternate Terminology Competitive Bidding Pricing Structure Fixed Bid Price (LS)

Cost Model Timeline - DBB Contractor Owner Engineer 0% 30% 60% 90% 100% Cost Estimate Cost Update Bid Estimate Lump Sum Bid Design Definition

Construction Manager at Risk (CMAR) Alternate Terminology CM/GC GC/CM Pricing Structure Negotiated GMP Owner Legend Working Relationship Contractual Relationship

Cost Model Timeline – CMAR Owner Engineer 0% 30% 60% 90% 100% Initial Cost Estimate Design Definition GMP Cost Model Development

Design/Build (D/B) Method Owner Legend Working Relationship Contractual Relationship Alternate Terminology Fixed Price Performance-Based Prescriptive-Based Progressive Pricing Structure Fixed Bid Price (LS) or GMP

Fixed-Price Design-Build Owner PM/OA Design/Builder Design Development and Construction Design Definition Execution Procurement FIXED-PRICE

Progressive Design-Build Owner PM/OA Design/Builder Design Development and Construction Design Definition 100% Phase 1 Phase 2 PRICE

Qualifications Based Selection Project Definition Pre-design Final Design Construction Start-up 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

Qualifications Based Selection Project Definition Pre-design Final Design Construction Start-up DISADVANTAGES Is counter to “public low bid” psyche Could be “tough sell” May need to engage a procurement advisor

Price Based Selection ADVANTAGES Project Definition Pre-design Final Design Construction Start-up ADVANTAGES Price certainty at time of proposal submission Detailed technical information provided

Price Based Selection DISADVANTAGES Project Definition Pre-design Final Design Construction Start-up DISADVANTAGES Large time investment in procurement Greater effort to review proposals Owner input only during procurement development Life-cycle cost considerations limited

Price Based Selection INNOVATION CONTROL Performance Based Pre-design Final Design Performance Based Prescriptive Based

Performance vs. Prescriptive Performance Based Prescriptive Based ADVANTAGES 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 Performance Based Prescriptive Based INNOVATION CONTROL Pre-dsign Final Design

Performance vs. Prescriptive Performance Based Prescriptive Based DISADVANTAGES 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 Performance Based Prescriptive Based INNOVATION CONTROL Pre-design Final Design

Best Value Selection ADVANTAGES Cost Qualifications Best Value Selection 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 DISADVANTAGES Cost Qualifications Best Value Selection DISADVANTAGES Large time investment in procurement Greater effort to review proposals Life-cycle cost considerations limited

Overview of Selection Process 1. Identify Project Goals/Drivers 2. Determine Suitable Delivery Methods 3. Define Criteria and Assign Weighting 4. Evaluate SELECT DELIVERY METHOD

Step 1: Identification of Project Package Drivers and Goals Typical Questions to Ask to Understand Drivers/Goals Does schedule need to be accelerated? Allocation of design risk to contractor? When is cost certainty required? Qualifications-based selection of contractor? Contractor involvement during design a benefit? Project complexity and level of unknowns? Low-bid required/desired? Operations contract? Financial return on investment potential (investor interest)? Early equipment procurement required? Would project benefit from contractor flexibility/innovation?

Step 2: Determine Suitable Delivery Methods Suitable Delivery Methods to Evaluate DBO DBB PD/B D/B Drivers Schedule Risk Allocation Control Cost Certainty Qualifications-Based Selection Improved Efficiency Collaborative Design Development Minimization of Change Orders Early Equipment Identification Contractor Flexibility/Innovation

Step 3a: Define Evaluation Criteria Delivery Method Level of Control Cost Risk Allocation Schedule

Step 3b: Obtain Stakeholder Input to Determine Relative Importance of Evaluation Criteria Level of Control % Level of Control/Innovation 24 Schedule 26 Cost 30 Risk Allocation 20 TOTAL 100 Risk Allocation Schedule Cost

Step 4: Utilization of Evaluation Matrix to Select Preferred Delivery Approach   Weighting DBB CM/GC D/B PD/B Factor Rank Score LEVEL OF CONTROL 24 4 96 3 72 SCHEDULE 26 2 52 104 5 130 COST 30 90 120 RISK ALLOCATION 20 40 60 80 100 Total Points 278 380 402 420 1 = Least Favorable; 2 = Less Favorable; 3 = Neutral; 4 = Favorable; 5 = Most Favorable OR   Weighting DBB CM/GC D/B PD/B Factor Rank Score LEVEL OF CONTROL 24 -- O&M Considerations 4.8 5 25 4 20 2 10 Sustainability 3 15 Level of City Control Project Quality City Resources SCHEDULE 26 COST 28 RISK ALLOCATION 22 Total Points 100 278 380 402 420 1 = Least Favorable; 2 = Less Favorable; 3 = Neutral; 4 = Favorable; 5 = Most Favorable

Metro Wastewater Reclamation District Northern Treatment Plant $450M Total Program Costs 7-mile gravity interceptor (DBB) Treatment plant site restoration (PDB) 24 mgd treatment plant (PDB) Northern Treatment Plant Project Largest PDB (W & WW) to-date; largest new WWTP currently in U.S. “Greenfield” satellite facility (60 mgd build-out) Intricate regulatory conditions; advanced treatment Daily TIN < 10 mg/L, Total P < 0.1 mgd, high-level disinfection Community amenities (e.g., visitor’s center, effluent wetlands/ponds, odor control) Complex project with high public + political visibility Carollo/Jacobs Serving as Owner’s Advisor (Years 2010 to 2016)

Benefits Realized by the District Using PDB Approach Best Value Selection of Suppliers, Subcontractors Competitive (market) pricing + other best value criteria Early Cost Certainty with High-Level Design Control Owner involvement in design progression Interim milestones: 30%, 50%, 70% Flexibility to make mid-stream adjustments to meet budget Early bidding of suppliers, subs (50% design) Negotiated Stipulated Price at 70% Open Book Cost Model Provided accounting of all costs Ensured self-performance competitiveness via 3rd party validation (concrete, mechanical, yard piping, I&C) Reduced risk and escalation contingencies

NTP Facilities Cost Trending History (Total Project Cost) 19% Reduction $311,000,000