HomeMy WebLinkAbout07. Follow-up discussion to May 10, 2016 presentation from District Counsel Kent Alm on implementing a design-build process, and alternative delivery methods for Central San 7.
UPDATE ON DESIGN-BUILD AND
ALTERNATIVE DELIVERY MFOR
CENTRAL SAN
SENATE BILL 785 (2014)
Engineering and Operations Committee
June 6, 2017
Presented by
Kent Alm, District Counsel
. __, , Jean-Marc Petit, Director of Engineering
and Technical Services
ow WNW
DESIGN- BUILD METHOD
• Anew design-build law (DB) became
effective January 1 , 2015, pursuant to
Senate Bill (SB) 785. It is located in Public
Contract Code sections 22 1 60-221 69
which is applicable to special districts
including Central San.
• SB 785 repeals most of the previously
existing laws that may have authorized DB
for local agencies under specific
circumstances.
BENEFITS OF DB
• Possible benefits of DB contracting, over the traditional
design-bid-build approach. These benefits potentially include:
Greater flexibility in the contract award (low bid or best value).
M A single point of accountability (eliminates designer and
contractor conflicts).
A Ability to attract higher quality construction work on specialty or
atypical projects.
Fewer change orders and claims.
Faster project completion.
Increased cost certainty.
More opportunity for innovation.
DISADVANTAGES OF DB
• The owner may not have the comfort and control of having its
design engineer act as its agent during the project. Even if Central
San has an independent design engineer involved in oversight of
the project, its design engineer will not have as much control or
insight into the design details.
• As such, with DB, Central San will lose some control of the design
process. Design is managed through approval of design
documents and submittals during both the design and construction
process. While some design elements may be specified, typically
the DB contractor is given flexibility in design.
• DB construction method may not be as competitive.
• Contract management is more challenging as well. Contract
administration overall requires more collaboration. Absence of
effective collaboration may result in less than satisfactory project
results.
SB 785 OVERVIEW
• Agency must develop an organizational conflict of interest
policy and then prepare documents setting forth the scope
and estimated price of the project.
• The scope documents may include desired design
characteristics, performance specifications covering
materials and equipment, preliminary plans or layout, or
"other information deemed necessary to describe
adequately the local agencies need.'
• Agency may prequalify proposers through Request for
Qualifications (RFQ) process before inviting those
prequalified proposers to submit proposals in response to a
Request for Proposal (RFP).
• Allows agency to award a contract on the basis of the "best
value" to the agency, which requires the establishment
objective criteria including at a minimum, price, technical
design and construction expertise, and life cycle costs over
15 or more years.
• The dollar threshold under SB 785 is minimum $1 million.
------------M M
c C fel
PRE QUALIFICATIONS
• During the prequalification process, local agencies are now authorized to
either formally prequ lify proposers or shortlist proposers.
• This provides useful flexibility in that shortlisting allows an agency to
determine how many proposers will be allowed to participate in the proposal
process after the statements of qualification have been submitted and
reviewed. In other words, the agency has the discretion to create a large or
small shortlist depending on the quality of the qualification statements
submitted.
• The alternative is a true prequalification process where an objective
qualification standard is established in the RFQ document, which must then
be applied to advance all proposers that have met that standard even if the
number of proposers is larger or smaller than ideal.
EWTRtL COIN' AtO7
RFP PROCESS
The RFQ must include each of the following
elements:
• Basic scope of the project
• Expected cost range
• Methodology that will be used to evaluate
� proposals
• Procedure for final selection
• Significant factors that agency will consider in
evaluating proposals
• Standard template for Statement of Qualifications
.,r1,
CONFLICTS
• There is significant guidance regarding organizational conflicts of interest.
The local agency must adopt written guidelines.
• These guidelines should be drafted carefully and should address potential
conflicts between the District staff and Board Members and entities that
may seek to propose. Ideally, the guidelines should include a screening
process at the outset of the procurement in conjunction with the
prequalification process. Another concept which must be addressed is
dealing with conflicts between District retained consultants and DB
proposers.
• The basic principal is that where a firm has a role in assisting the District
with planning or developing a project during its initial stages, it is barred
from competing for the DB contract or other subcontracts for the DB firm.
• This prohibition could include a consultant preparing an environmental
review, and would include an engineering consultant that seeks to
participate on the DB team after assisting the agency in the development of
the initial design concepts. _
DESIGN- BUILD-OPERATE PROHIBITED
• SB 785 now expressly prohibits the award of a contract
for design-build-operate services, except for operations
during a training or transition period. (Public Contract
Code section 22164(a)(2).)
• If the District desires to award a contract that includes an
operation component after a new facility is constructed, it
must use other contracting authority, such as under the
Infrastructure Financing Act applicable to fee producing
infrastructure facilities. (Government Code section 5956-
5956. 10) or the Energy Conservation Contract statutes
(Government Code section 4217. 1 0-4217. 18.)
OTHER REQUIREMENTS
•
SIB 785 includes a new requirement for DB contractors to provide an
"enforceable commitment" to use a "skilled and trained workforce" at
the RFQ stage of the process. (Public Contract Code section
22164(c).) Alternatively, there must be a project labor agreement in
place meeting stated requirements.
•
SIB 785 requires a payment bond in an amount not "less than the
performance bond." (Public Contract Code section 22165(a).)
• Finally, the agency must issue a written statement in conjunction with
the contract award setting forth the basis of the award. (Public
Contract Code section 22164(f)(5).)
REALITY HECK : DB
IST
DIDEAL FOR
EVERY PROJECT
• DB may not be ideal for every project. For instance, where an agency seeks
close control over design details, design-bid-build may be a better choice,
because the agency will be able to monitor, revise and fine tune the design
before the project is put out to bid. Similarly, where an agency wants to keep the
initial conceptual designer on board to complete the design, DB is not an option
because organizational conflict of interest rules preclude the initial designer from
participating on the final project.
• It is also important to note that the prequalification process extends the time to
contract award by several months. However, the time spent prequalifying and
ranking proposals carefully may be reflected in a higher quality DB contractor,
which in turn may lead to higher quality and more efficient work.
• There is a ramp-up required in terms of educating internal staff and
management as to how the process works. For the agency's first DB project,
additional effort will be required to prepare new RFQ and RFP documents and
procedures that comply with SB 785. Where the design work is relatively simple
and DB would not result in significant efficiencies, the time and effort involved in
the ramp-up may not be worth it.
• For certain projects, DB may be a significant improvement over design-bid-build,
and might well enhance the way Central San proceeds with certain capital
projects going forward.
_e
S9
COMMENTS AND QUESTION
� t
EltmL.ti owat'i 54 l! o
F
IPF"-, wow ME