1. Port of Galveston Parking Structure Delivery Methods
02/27/2010
Pictured: Trinity Well Field 1.5-MG Tank, New Braunfels Utilities
(CMAR Method)
Port of Galveston Parking Structure
Delivery Methods
Board of Trustees Galveston Wharves
Board Meeting February 26, 2019

2. Agenda Parking Garage – 2,000 Spaces Procurement Local Government Code
Construction / Procurement Methods
Competitive Bidding Method
Competitive Sealed Proposal
Construction Manager at Risk
Design Build P3
Key Considerations

3. Overall Port Project Goals
Accommodate on-going operations
During construction and parking structure operations
Improve aesthetics and compatibility with existing context
Green roof, sustainable design
Facades, commercial, retail space
Provide cruise terminal and public parking
Convenience
Reasonable price
Address stakeholder involvement
Accommodate input

4. Other Project Considerations
• Confirmation the site suitability make any adjustments
• Address the significant construction challenges and develop plans during design to minimize or eliminate interruptions to ongoing Port and Cruise Line operations.
• The logistics of the parking structure on cruise days as to entrance and exit of passengers and their vehicles in the critical time window.

5. Current Texas law provides the authority for Port of Galveston to use delivery options
Chapter 2269 of Title 10 Subtitle F TX Government Code A
General Provisions B
General Powers and Duties C
Competitive Bidding Method D
Competitive Sealed Proposal Method E
Construction Manager – Agent Method F
Construction Manager –At- Risk Method G
Building Using Design-Build Method H
Design-Build Procedures for Certain Civil Works Projects I
Job Order Contracts Method J
Enforcement
Chapter 2267 of Title 10 TX Government Code – Public And Private Facilities and Infrastructure
Public Private Partnerships

6. It’s the Board’s choice
Project Delivery Method
advantages
disadvantages
Owners have to carefully consider advantages and disadvantages and the relative priority and weight of each project delivery option and how they match project objectives and expectations.
Select project delivery method with the highest probability to meet owner goals and objectives

7. Design-Bid-Build (DBB) Attributes
Most widely used
Owner engages engineer for design services
Engineer completes 100% design
Owner solicits bids or proposals
Owner engages contractor for construction
Sub- contractors
Vendors
Contractor
Owner
Design Engineer

8. DBB Advantages and Disadvantages
Most understood; owner comfort zone
No legal barriers
Engineer works for owner; owner controls design
Suitable for competitive bidding to get lowest initial price
Selection can be best value and not lowest price
No contractor input to address key Project considerations
Owner warrants design to contractor
Initial low price may not be the final price
Most adversarial process; change order and dispute prone
Quals/Exp to extent of weighting
Don’t know who bids until bid day and what prices are ( 100% design complete)
Best value (with price weighting and “pressure”)
No innovation - “build the design”
Use as default content layout

9. Design-Build-Bid Competitive Sealed Proposals
Competitive Bidding
Selection based 100 % on price- low responsible bidder’s price
“Responsible Bidder” hurdle relatively low
Ties owner inflexibly to price
Owner concerns over lose of control
Competitive Sealed Proposals
Best value: Trade-off between price and non-price considerations
Low price may not be the best value
A higher price is the “premium” you pay for best value

10. CMAR Attributes Two contracts; design and construction
Maintains traditional owner-designer- engineer relationship
Contractor - consultant in design phase, at-risk general contractor in construction phase
Contractor input during design phase (preconstruction services)
Collaboration- distinctive feature
Sub- contractors
Vendors
CMAR
Owner
Design Engineer

11. CMAR Advantages Time and cost-effective procurement process
Maintains control of design
Address key project considerations with collaboration
Reduce design misunderstandings, RFIs and change orders
Estimating and scheduling expertise during design
Accelerated schedule; construction prior to design complete
Earlier cost certainty
Owner control and decision-making in design process
Life-cycle costing, operability and ease of maintenance considerations easily incorporated into design

12. CMAR Disadvantages
CMAR selected on cost elements before project price is known
Owner warrants design to CMAR
Potential new procurement territory by owner; learning curve needed
High level of owner staff involvement during design; may slow design down
Inability to agree on the project cost; use off ramp

13. Design-Build (DB) Attributes
One contract - design and construction
Single point accountability
Design-builder responsible for efficacy of design
Design Engineer (engineer-of-record) is Design-Builder
Owner loses traditional owner-design engineer relationship
Owner can have “technical advisor”
Sub- contractors and Vendors
Sub-
consultants
Design-Builder
Owner
Technical Advisor

14. DB Advantages
Address key Project considerations in a collaborative manner
Time and cost-effective procurement process
Single point of accountability - design and construction; Design-Builder warrants design to owner
Cost certainty known at time GMP is given; i.e. % design complete
Selection of Design-Builder based on qualifications, experience and a cost proposal
Accelerated project schedule; construction prior to design complete
Owner control and decision-making in design process
Life-cycle costing, operability and ease of maintenance considerations easily incorporated into design

15. DB Disadvantages
Design-Builder selected on price elements before GMP is known
Potential new procurement territory by owner; learning curve needed
Owner loses trusted advisor relationship with engineer; Design-Builder is engineer-of-record; loses some control of design
Owner advisor(s) may be needed to assist in RFP procurement, design and project/contract oversight and monitoring
High level of owner staff involvement during design

16. Guaranteed Maximum Price (GMP)
Owner achieves competitive bidding; full transparency of competitive procurement
If bidding results in lower GMP, owner pays lower amount
If bidding results in higher GMP, owner only pays GMP
Savings can be shared- Owner decision
Self-performance by contractor as per TX law, owner flexibility and decision
Owners pay no more than GMP and can share the savings if actual costs are under GMP

17. Construction Initiation Prior to Design Complete
Traditional Approach
Design
Bid & Award
Construction
Design
CMAR and DB Approach
Bid & Award
time and money savings
Construction $

18. Typical Structure for P3
Owner Advisory Team
(Technical. Financial and Legal)
Establish viability, PSC, vfm analysis
Develop and implement procurement
Ongoing monitoring, oversight
Public
Owner
Concession Agreement
Project sponsor
Private equity fund
Other investors- pension funds, pother project participants
Finance
Documents
Equity
Documents
Private Sector
Concessionaire
Commercial banks
Taxable bonds
Private activity bonds
Equity Participants
Equity
Lenders
Debt
Design-Build Agreement
O&M/Facilities Management Services Agreement
Design-Build
Operation and Maintenance
Use as default content layout
P3 Attributes
Design, construction, O&M and financing under a single contract
Transfers project/service delivery rights and obligations to private sector in return for a revenue stream
Negotiated agreement with significant risks and responsibilities and control to private sector

19. P3 Advantages Monitor and oversee performance
Payment only if performance is received
Could include design- construction-finance and O&M (one stop shopping)
Strong performance guarantees
Port could receive an up- front concession fee
Maximum ability to transfer risk
Revenue risk and debt repayment key risks
Less administrative burden

20. P3 Disadvantages
Significant time and cost to establish viability, procure and contract
Lose of control
Revenue stream and rates in play
Not a timely solution to achieve parking structure
No contractor input to address key Project considerations
City still retains accountability to public and City and other stakeholders
Repayment of concession fee at a higher cost of capital
Cost and time to “unwind”
Ongoing oversight and monitoring
Design, construction and O&M efficiencies need to overcome higher cost of capital

21. Recommendation – Design-Build
Provides for the highest probability of the Port achieving its Project expectations.
Ability for the Port to react in the most time and cost-efficient manner to deliver this Project.
Ability to develop a Project cost that provides the best value with regards to scope and quality for the available funds.

22. Recommendation – Design-Build
Optimum ability
to confirm site suitability in collaborative manner or make adjustments
to address construction challenges and develop plans during design to minimize or eliminate interruptions to ongoing Port and Cruise Line operations.
to consider the logistics of the parking structure on cruise days as to entrance and exit of passengers and their vehicles in the critical time window.

23. Recommendation – Design-Build
Potentially reduce schedule and costs with contractor input during design
Achieve better project cost certainty earlier the design process
Provide for single point of accountability and responsibility for design and construction
Ability to initiate construction prior to design
Ability to best control design and estimating to allow the budget not to be exceeded

24. Thank you for your time Questions Douglas Herbst

25. Why Consider CMAR and DB?
Could Attain Benefits if procured and implemented right!
Faster delivery time (on time or ahead of schedule)
Better and sooner price certainty
Address key Project considerations
More cost-effective final price; potential for cost savings (capital and O&M) (on budget or under budget)
Minimal disputes; increased collaboration and not confrontation
Better risk management (DB better than CMAR)
Better life cycle costing potential
Use as default content layout

26. Costs -The Value Proposition
Value for money (Vfm)
Public Sector Comparator (PSC)
P3 Concession

27. Design Services – Collaboration is Key
Owner in control of decision-making
Collaboration with designer, builder, owner and its technical advisor
Design to budget flexibility
Time and cost-efficient design from construction perspective
Project
Kickoff
30% Price
and Schedule
60% Price
90% Price
(sounds a lot like CMAR)
GMP typically at 60%, but flexible

28. Fundamental Questions
What project delivery method?
What procurement method?
What contract format?
Select project delivery method with the highest probability to meet owner goals and objectives… and
Do it right!

29. Project Delivery Under Texas Law
Current Texas law provides authority for Local Governmental Entities to use various methods
Need to confirm legal authority for Port to use TX Government Code Chapter 2269 and 2267
Port is “within City” and City appears to have such authority
There are different and additional legal requirements and limitations for each method
There are flexibilities and choices
Under Chapter 2269
Determine option that provides best value for any method other than competitive bidding.
Address delegation of authority - “governing body may delegate”.

30. Competitive Sealed Proposals and Collaborative Project Delivery
Use Competitive Sealed Proposals when……
Use Collaborative Project Delivery when…..
You want to select your contractor on other factors than just low price
Your project is complex and/or has construction challenges
You want a project price before you select the contractor
You value contractor input and believe you will get better project results because of it
You want to minimize change
You value collaboration and not confrontation
Your project schedule is sensitive or critical and/or your budget is absolute
You want more control over design decisions based on life cycle costing, schedule, operability and other considerations on areal time basis
Use as default content layout

31. Fundamental Questions
What project delivery method?
What procurement method?
What contract format?
Select project delivery method with the highest probability to meet owner goals and objectives… and
Do it right!

32. Project Delivery Options Available
Traditional Delivery
Collaborative Delivery
(Public Private Partnerships) Partnerships)
Multiple Contracts
Single Contract
Project Delivery
Project/Service Delivery
DBB-1
DBB -2
CM-a
CMAR DB
DBO
DBOF
DBOOF
Design 
N/A
Construction
O&M
Finance
Ownership
Notes:
DBB-1 = Design-Bid-Build, Competitive Bidding
DBB-2 = Design-Bid-Build, Competitive Sealed Proposals
CM-a = Construction Management Agent
CMAR = Construction Management at Risk
DB = Design Build
DBO = Design Build Operate
DBOF = Design Build Operate Finance
DBOOF = Design Build Operate Own Finance
Owner
Decides
Best
Option

33. DBB Has Its Drawbacks Very time consuming
Adversarial relationship can develop between owner, engineer, and contractor (if bid price = cost to build)
Can lead to unsatisfactory results - cost, schedule, and quality
Can lead to change orders and disputes
No input from contractor during design
Constructability considerations can impact cost and schedule
Use as default content layout

34. CMAR and DB Comparison Key Difference Similarity Project Attribute
Procurement Selection
Qualifications or qualifications and cost parameters
Qualifications and cost parameters
Contracts
2 contracts- design and preconstruction and construction
1 contract- design and construction
Contractor involvement during design
Yes along with significant owner involvement
Initiation of construction
Prior to 100% design complete
Owner control of Design
Yes; owner contracts with trusted advisor/ engineer of record
No; engineer of record on design build team; owner can use technical advisor
Design Risk
Owner
Design Builder
Project Price
GMP *
Price Transparency
Yes
Potential to share in cost savings
* Owner flexibility to convert to lump sum; at owner’s discretion
Key Difference
Similarity

35. Example: Project Objectives Matrix to Rank Delivery Options
Project Objective/ Delivery Option
(Score 1 to 5; 5being the best to meet objective)
Weighting (100% total)
DBB CB
DBB CSP
CMAR DB P3
Design and construction schedule i.e., on schedule or sooner
On or below budget
Collaboration amongst owner team and Stakeholders
Develop design and construction plan to meet goals
Beneficial “builder input”
Minimize shutdowns and public inconveniences
Construction coordination with urban environment and traffic control plans
Construction sequencing and staging
Construction easements
Appropriate project risk allocation and management
Ability for early procurement of materials
Others
Use as default content layout
multiple criteria decision making matrix

36. Parking Structure Project Objectives
Design and construction schedule
i.e., Need for parking structure is “immediate”
Determine optimum budget
Collaboration and concurrence amongst Port, City and other Stakeholders on project scope
Develop design and construction plan to meet goals
Design to accommodate on-going operations and peak demands
Beneficial “builder input”
Minimize cruise operations, Port operations and public inconveniences
Address construction constraints with site logistics plan
Construction sequencing and staging
Appropriate project risk allocation and management
Ability for early procurement of materials and early initiation of construction
Use as default content layout

37. P3s
Design-Build

38. 3 months, $30,000
P3s
Design-Build
27 months; $65 million

39. P3s Design-Build 3 months, $30,000 27 months; $65 million