Innovative Contracting Construction Management Association of America Seminar May 17, 2013 California Department of Transportation

Traditional Project Delivery  Design-Bid-Build (DBB)  Specified by Public Contract Code  Design must be complete  Awarded to the lowest responsible bidder

Why Use Innovative Methods?  Faster Delivery  Cost Certainty  Constructability  Better Partnering  Risk Transfer  Innovation

Innovative Contracting Effort Hired Trauner Consulting Services, Inc. to:  Identify methods used by others  Identify the pros and cons of each method  Assist in developing policy, procedures, and processes for selected methods  Assist in developing training

Innovative Contracting Report Identified 27 methods divided into the following categories:  Project Delivery Systems  Procurement Practices  Contract Management Methods

Project Delivery Systems Caltrans Experience  Design-Bid-Build  Design-Sequencing Additional Methods  Indef. Delivery/ Indef.Quantity  Agency-CM  CM at-Risk  Design-Build  Early Contractor Involvement  Project Alliancing  Contract Maintenance

Procurement Practices Caltrans Experience  Cost-Plus-Time (A+B) Bidding  Low Bid  Lump Sum Bidding Additional Methods  Multi-Parameter (A+B+C) Bidding  Alternate Design  Alternate Bid  Additive Alternates  Best-Value  Reverse Auction  Bid Averaging

Contract Management Methods Caltrans Experience  Incentive/Disincentive  Lane Rental  Flexible Notice to Proceed  Warranties Additional Methods  Liquidated Savings  Active Management Payment Mechanism  No Excuse Incentives  Shared-Risk Contingency Fund

Design-Build

A delivery method where a contract for both the design and construction of a project is awarded to a single entity.

Design-Build

Legislation – Senate Bill 4  Allows 15 design-build projects  10 Caltrans  5 Local  California Transportation Commission must authorize  Prequalification versus shortlisting  Allows “Low Bid” or “Best Value” awards  Sunsets January 1, 2014

Authorized Projects Awarded Projects  LA 10/110 – Express Lanes$ 72 million  Mad 99 – Rehabilitate Roadway$ 23 million  SM 101 – Install Ramp Metering System$ 11 million  Fre 180 – Construct Braided Ramps$ 41 million  LA 10/605 – Construct EB 10/SB 605 Connector$ 46 million  SD 805 – I-805 North HOV/BRT$ 72 million  LA 710 – Gerald Desmond Bridge$650 million  SBd 15/215 – Devore Interchange$208 million  Riv 91 – HOV Lanes$633 million Projects Currently in Procurement  Cajon Pass$140 million  North Region Bridge Deck Rehabilitation$ 58 million

Why Use Design-Build?  Faster Delivery  Cost Certainty  Constructability  Risk Transfer  Innovation

Alternative Technical Concepts Alternative Technical Concepts (ATC) are proposed changes to the Department’s supplied basic configurations, design criteria, or construction criteria which provide a solution that is equal to or better to the requirements in the Request for Proposals.

Alternative Technical Concepts (ATCs) ATCs submitted – 206 Value of ATCs submitted – $967 million ATCs approved – 109 Value of ATCs approved – $502 million ATCs incorporated – 29 Value of ATCs incorporated – $142 million

Devore Interchange Project  Deliver project 18 months earlier  Secured $108 M SHOPP funding for the project  Improved design, I-15 NB continuity  Reduced right of way take (10 parcels)  Reduced environmental impacts  $40 M savings

Construction Manager-General Contractor

Construction Manager / General Contractor (CM/GC) A delivery method that allows an owner to engage a construction manager to provide input during the design process. At an agreed upon point, the owner and construction manager negotiate a price for construction of the project and the construction manager becomes the general contractor.

CM/GC Process

Preconstruction Services  Constructability Reviews  Verify Quantities  Estimate Alternatives  Value Analysis  Risk Analysis  Construction Phasing  Project Scheduling

Authority  Assembly Bill 2498 (Gordon)  Signed September 2012  Added Section 6700 to Public Contract Code  Authorizes up to 6 projects by Caltrans  Must be administered by Caltrans  5 projects greater than $10 million  Effective January 1, 2013  No sunset date

Why Use CM/GC?  Faster Delivery  Cost Certainty  Constructability  Risk Mitigation  Innovation

Next Steps  Develop processes and contract templates  Industry outreach  Project selection  Begin procurements

Useful Links Innovative Procurement Practices Report: rocurementPractices.pdf Alternative Procurement Guide: rocurementGuide.pdf

Useful Links Design-Build Demonstration website: FHWA’s Design-Build Effectiveness Study d.pdf

Useful Links CMGC Pilot Program website: NCHRP Synthesis 402: Construction Manager-at-Risk Project Delivery for Highway Programs 02.pdf

For More Information Contact: Raymond S. Tritt Chief, Office of Special Projects California Department of Transportation (916)