Alignment of State of Colorado Procurement Process with Industry Best Practices June 6, 2014

AGC Colorado  AGC is a national organization with 92 chapters and 30,000 members  AGC Colorado is a commercial building chapter with 400 members  55 General Contractors and 150 Specialty Contractors  Active AIA/AGC/ACEC Committee

Capital Construction & Controlled Maintenance Funding  AGC has been the main private group advocating for increased general funds  Controlled Maintenance increased from $10M to $45M (FY 12 to FY 14)  Capital Construction increased from $11.4M to $143.1 (FY 12 to FY14)  CC & CM for FY15 is $273M  Collaboration with Universities on FY Conditional Funding for 8 projects - $135M

CM GC Task Force  3 years ago AGC started discussing best practices for procuring construction & design services  CM GC Task Force formed by the Board of Directors with task to develop a BP recommendation  AGC invited AIA and ACEC to join in the task force  Task force identified the State of Colorado IPD (CM/GC and D-B) as a good system to build on

Task Force Member Companies Adolfson & Peterson Construction Bennett Wagner & Grody Berich Masonry, Inc. Calcon Constructors, Inc. Cator, Ruma & Associates Concrete Frame Associates, Inc. Drahota Commercial Dynalectric GE Johnson Construction Co. GH Phipps Construction Companies Golden Triangle Construction Haselden Construction, LLC Heath Construction Hensel Phelps Construction Co Howell Construction Hyder Construction Inc. J. R. Butler, Inc. JE Dunn Construction Kiewit Building Group, Inc. Ludvik Electric Co. MKK Consulting Engineers, Inc. Mortenson Construction Nunn Construction, Inc. OPUS Design Build, LLC PCL Construction Services, Inc. Prof. Management Consultants Rider Levett Bucknall Saunders Construction, Inc. Starker Construction Co. Swinerton Builders The RMH Group Turner Construction Weitz Company

Our Vision is Bigger Than Just “State of Colorado” Projects

10 Minute Round Table  Describe the characteristics or attributes of the “Best” projects you have been a part of.  Describe the characteristics or attributes of your “Worst-Most Frustrating” projects.

How Do We All Get More Of The “BEST” Project Outcomes?

“CHANGE”  Insanity – Doing the same thing over and over and expecting different results. “Albert Einstein”  Not likely to improve or get more “Best Outcomes” without adjusting some things.

Best Project Outcome  Given your feedback on the best-worst projects, one predictor of best project outcome’s is:  Pick the right team members  How do we accomplish this?  Improve the team selection process

Vendor Procurement  AGC-AIA-ACEC Committee has been studying “Best Practices” for 3 years  Received feedback from multiple states and industry organizations  State of Colorado process is one of the best local processes  AGC-AIA-ACEC Committee started with State Process to align with “Industry Best Practices”  Minor changes to “State of Colorado” process - then model to private sector

Changes Proposed  Help evaluation teams understand industry procurement Best Practices to ensure better consistency when implementing State Selection Process  Use a forced ranking of vendors when scoring qualifications of vendors

Best Practices  Identify appropriate selection criteria  Determine importance (weighting) of each criteria  Use a forced ranking process to score each criteria  Hold Round Table discussion after interviews to clarify questions and build consensus  Keep cost proposals confidential until interview scoring is complete

Best Practices  Provide transparent feedback of results to all competing firms  Do not interview more than firms  List selection criteria and weighting in RFP  Do not assume all cost proposals are true “Apples to Apples”  If big deltas, ask “Why”  Verify assumptions of different vendors

Forced Ranking

Why Forced Ranking  History of past projects – shows minimal differentiation when using “Ratings”  Minimal differentiation on qualifications leads to a primarily cost-based selection  Vendors – are smart and recognize these trends; therefore, vendors overly focus on “winning” cost points  Leads to “poor-boying” staffing  Under staffed projects - a leading indicator to bad project outcomes  Forced ranking will help reduce this behavior and outcomes

Why Change?  Creates better project outcomes by selecting best value vendor.  Stay aligned with industry best practices.  Forced ranking creates more differentiation to insure a true “qualifications” based selection.  Makes the selection process easier for interviewers.  Better process will attract better vendors.

Actions Forward  _______________________________