Best Value Business Model

Supplemental Pre-Proposal Information Video

RFP 2013-0045: Part ADesign-Build St. Joseph’s College Residence

This presentation is being provided for educational purposes only

Please refer to the RFP for specific instructions

If there are any inconsistencies, the RFP and Amendments shall take precedence over this

presentation

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Best Value Model

Part A – Phase 1Part B – Phase 2

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Best Value Model

Contract Award

Part A – Phase 1Part B – Phase 2

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Best Value Objectives• Client outsourcing to experts based on performance & value

• Minimize risk of non-performance– Leverage Proponent expertise to optimize project delivery– Highest value for cost– High performance and client satisfaction

• Minimize the need for client management, direction, and decision making. – Ability to lay out optimal project plan– Lay out what you need from the Client

• In return, the vendors can maximize profit by being more efficient

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Best Value Model - Selection

Part A – Phase 1

Selection Objectives – Part ASelection based upon Proponent Expertise:

Ability to understand the project & plan your approach

Identify & mitigate risks to the project

Add value to optimize project

Criteria Committee Rating

Numerical Value

Project CapabilityRisk AssessmentValue AddedPast Performance InformationInterviews

Evaluation Criteria – Part A

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Selection Steps – Part A

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VendorVendor

STEP 1: RFPSTEP 1: RFP

Project CapabilityRisk Assessment

Value Added PPI VendorVendor

STEP 2STEP 2

Interviews

VendorVendor

STEP 3STEP 3Prioritize

forShort List

VendorVendor

STEP 4STEP 4

Move forward to Part B

3 Written Submittals – Part A

Risk Assessme

nt

Risk Assessme

nt

Value Added

Value Added

ProjectCapability

ProjectCapability

SimpleSimple, conciseconcise, actionable plans

= risks you don’t control

= capability to meetrequirements

= additional expertise beyond requirements

Allows Vendors to differentiate themselves based upon their ability to identify and minimize risks to the project.

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Project Capability• Differentiate capability to meet the requirements of the

project.

• Identify potential problems you see (technical concerns that you control)

• Describe your plan or approach.– Describe how it is minimized with your expertise & your

project approach.

• Include documented performance of your firm and/or key people

– Where you have successfully implemented similar solutions on past projects

– Supporting documentation may be requested

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Project CapabilityTemplate

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Risk Assessment• Identify major project risks the Proponent DOES NOT

control• Concerns that you have to the project being

successful• Explain why the risk is a risk• Should be a risk specific to the current project

• Identify solution to avoid / minimize the risk• Lay out your plan to avoid or minimize each risk

from impacting the project• Prioritize in order of importance

Risk Assessment

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Template

Value AddedProvide ways to maximize value within budget

– Provide more scope or more service within the GMP• Maximize value above & beyond Statement of Requirements

– Understand the need better than the University can specify

• Options or alternates that may or may not be invoked

• If no cost (within GMP)= $0• If an additional cost impact = approx, RoM, Range

Value Added

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Template

Examples

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Project Capability

• Plan 1 – We will use our 20 years of experience in working with

mechanical systems to provide an optimal heating and cooling system design.

• Plan 2– We have identified the design of the heat/cooling system as a

risk. We have bid using best rated mechanical contractor in the area (rated at 9.8 out of 10.0, next best rated 9.1)

– The mechanical contractor has installed mechanical systems on three DB projects with similar scope requirements.

– The Mechanical system will be provided by one manufacturer, and will be commissioned by the manufacturer, contractor, and general contractor.

– We will ensure that the system performance and installation is verified in the pre-award period.

Example of SolutionsExample of SolutionsRisk: Risk: Design of Heating/Cooling SystemDesign of Heating/Cooling SystemType: Project CapabilityType: Project Capability

• Plan 1 – We will work with the owner to ensure our cooling &

dehumidication process meets acceptable tolerances. – The owner can be assured all risks associated with

cooling & dehumidication will be eliminated because we offer the benefit of a highly qualified project team.

• Plan 2– On two previous projects totaling $74.6M where cooling

& dehumidification were required during construction, the projects’ schedule deviation rate was (-6.3%), the contractor change order rate was 0%, and the projects received an overall customer satisfaction rating of 100%.

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Example of SolutionsExample of SolutionsRisk: Risk: Weather Protection (cooling & dehumidification)Weather Protection (cooling & dehumidification)Type: Project CapabilityType: Project Capability

MARKETING INFORMATION

• Project Manager Experience– The proposed Project Manager and Pre-Construction

Manager have put in place $87.4M in design-build construction projects in the past five years.

– The team’s schedule deviation is (-1.5%), their contractor generated change order rate is 0%, and their overall customer satisfaction rating is 98%.

• Roofing Subcontractor– We have selected a roofing contractor who surveyed 8

past clients on completed jobs worth $750,000 and received a customer satisfaction rating of 10 out of 10.

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Example of SolutionsExample of SolutionsRisk: Risk: Documented PerformanceDocumented PerformanceType: Project CapabilityType: Project Capability

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• Plan 1 – We will work with the user to minimize the impact of

noise from demolition.

• Plan 2– We have planned to demolition during off hours and

weekends. This will have a slight impact on our cost (less than 1%), but the impact to customer satisfaction justifies this.

– We will also install rubber sheets on the floors to diminish noise and vibrations.

– Both solutions can be performed within your budget. – Both solutions have been used on multiple previous

projects w/ high levels of customer satisfaction (9.4/10).

Example of SolutionsExample of SolutionsRisk: Risk: Noise from DemolitionNoise from DemolitionType: Project CapabilityType: Project Capability

Examples

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Risk Assessment

• Plan 1 – We will work with the owner to ensure design reviews are

handled in a timely manner to minimize schedule impacts.

• Plan 2– We propose the owner must review critical design submittals

within five (5) business days to meet the proposed schedule. – During the Pre-Award phase we will provide a submittal

schedule showing what submittals are critical and when the owner will receive the submittals. This will be coordinated with all key stakeholders to ensure up front schedule agreement.

– Once submittals are provided, a weekly log will be distributed to track the review status.

– If the review goes longer than five (5) days, the critical submittal item will be added to the weekly risk report.

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Example of SolutionsExample of SolutionsRisk: Risk: Owner Design ReviewsOwner Design ReviewsType: Risk AssessmentType: Risk Assessment

Plan 1:• We will work closely with the Owner to minimize all risks associated with

program development and our team can be very innovative in developing alternative design solutions for different building needs

Plan 2: • The work will commence with a “Core and Shell” approach to the building• Recommend a planning approach that works with a space “budget” at this point.

The adjacencies and specific room requirements can be developed at the “tenant fit-up” stage of the project.

• Will obtain an understanding of all user and breakdown of space at least one month prior to the first visioning session.

• Should the time line require fast decisions, the team may require that the planners responsible for the chosen occupants provide their “best judgment” to the design team and refine that data as the process continues. The Design Architect will serve as the primary line of communication in such a situation.

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Example of Solutions Example of Solutions Risk: Risk: Program Development – Design Program Development – Design Type: Risk Assessment

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• Risk Solution 1 – Coordination with [water company] is critical. We will

coordinate and plan with [water company] as soon as the award is made to make sure that we get water to the site to irrigate the fields.

• Risk Solution 2– We will coordinate and schedule the water with [water

company]. However, based on past experience there is a high risk they will not meet the schedule (the water company does not meet schedule over 90% of the time).

– We will have temporary waterlines setup and ready to connect to the nearby fire hydrant to irrigate until [water company] is ready.

– We will also have water trucks on-site if there is problems with connecting the lines.

Example of Solutions Example of Solutions Risk: Risk: Getting water to the site (utilities)Getting water to the site (utilities)Type: Risk AssessmentRisk Assessment

Examples

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Value Added

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• Item 1: Structural Approach to support Mechanical Equipment

• Why is it a Value Add?– We propose to design and construct an independent

structure within the existing building to support mechanical equipment.

– An added benefit of this is to create full interstitial space above the main floor. All future maintenance work can be accessed via the interstitial level and eliminates disruption of the facility below.

– The independent structure is constructed of load bearing steel studs with joists that minimizes space taken up by structure.

• Cost Impact:– $0

Value Added ExampleValue Added Example

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Example: Value Added Items

• Reroofing this building will not stop all water leaks. The majority of the leaks are caused by cracks in the parapet walls, broken/missing glass, and poor caulking. For an additional $10K and 3 weeks in schedule we can replace and repair all of these items.

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We are Looking for Proponents Who Can Think Ahead…

……And Act In And Act In The Client’s Best The Client’s Best InterestInterest

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Things to Avoid• Marketing Information:

– Our company is known worldwide as a leader in online education.

– We will use our long history to make sure the project is a success.

– We will use state-of-the-art process to make it a success.

• Transferring risk back to client:– We will work with the owner to resolve issues– We will have team meetings / partnering meeting with the owner

• General risks and/or general solutions:– We will plan ahead to coordinate activities– We will plan ahead to get classes scheduled and created

• Overly Technical data:– The system we propose has 200% increase in PRX bandwidth

modularity.

Submittal RequirementsSubmittal Document Maximum Page Length

Project Capability Two (2) pages

Risk Assessment Two (2) pages

Value Add Plan Two (2) pages

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• Must NOTNOT contain ANY identifying information (names, company names, project names, product names, etc.)

• Must use the provided template (can submit as many risks as fit within the 2 page limits of each submittal)

• List Risks in order of priority

Selection Steps – Part A

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VendorVendor

STEP 1: STEP 1: RFPRFP

Project CapabilityRisk Assessment

Value Added PPI VendorVendor

STEP 2STEP 2

Interviews

VendorVendor

STEP 3STEP 3Prioritize

forShort List

VendorVendor

STEP 4STEP 4

Move forward to Part B

Past Performance Information

Collected For:Company / Firm

Key Personnel

The Proponent picks their own references

The Proponent collects all surveys

Close out ratings at the end of the contract will be used to update PPI scores going forward at UofA

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Past Performance Information

Collected For:Company / Firm

Key Personnel

The Proponent picks their own references

The Proponent collects all surveys

Close out ratings at the end of the contract will be used to update PPI scores going forward at UofA

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PPI Survey / Questionnaire

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PPI Process

• The Proponent is responsible for sending out a survey questionnaire to each of their past clients.

• The survey must be faxed/emailed back to the Proponent

• The Proponent will submit all surveys to the Owner with their submittal.

Setup and send Survey Forms

Past Client Evaluates and Returns

VendorVendorPast ClientPast ClientVendorVendorProponentProponent

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Example Survey (Firm and Individuals)

Proponent

Past ClientProponent

Past Client

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The Evaluation Process

Submittal

Evaluation Members

Proposal Form(1 page)

Proposal Form, $, & Other Documentation

Proposal Form(1 page)

Risk Plans

Total Score

ContractingOfficer

ContractingOfficer

Selection Steps – Part A

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VendorVendor

STEP 1: STEP 1: RFPRFP

Project CapabilityRisk Assessment

Value Added PPI VendorVendor

STEP 2STEP 2

Interviews

VendorVendor

STEP 3STEP 3Prioritize

forShort List

VendorVendor

STEP 4STEP 4

Move forward to Part B

Shortlisting

• If necessary short listing will be conducted prior to interviews (depending on the number of Proponent)

• Interviews:– Pre-Construction Manager & Project

Manager– Design Architect & Structural Engineer

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Interview Format• Q&A Interview, NOT a presentation

• Individuals will be interviewed separately.

• A standard set of questions will be generated and asked to each individual.

• Typically interview times will last about 15-30 minutes per individual

• No substitutions will be allowed.

Best Value Interviews:Identifying Expertise

Examples of questions asked:

1. Why were you selected for this project?

2. How many similar projects have you worked on? Individually and as a Team?

3. Describe a similar project you have developed/worked on to the current project.

4. What is different about this project from other projects that you have worked for?

5. Draw out the process for this project by major milestone activities.1. Identify, prioritize, and how you will minimize the risks of this project.2. What risks don’t you control? How will you minimize those risks?3. What do you need from the client and when do you need it?

6. How are you going to measure your performance during the project?

7. What value do you bring to the project in terms of differences based on dollars, quality, expertise, or time?

8. Other questions regarding the RFP requirements

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Selection Steps – Part A

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VendorVendor

STEP 1: STEP 1: RFPRFP

Project CapabilityRisk Assessment

Value Added PPI VendorVendor

STEP 2STEP 2

Interviews

VendorVendor

STEP 3STEP 3Prioritize

forShort List

VendorVendor

STEP 4STEP 4

Move forward to Part B

Simple Scoring Methodolgy

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Vendor A Vendor B Vendor C Vendor A Vendor B Vendor C1 Proposal Cost 250 57,000$ 65,000$ 55,000$ 241 212 2502 Interview Rating 350 8.5 5.1 5.1 350 210 2103 NTR Rating 150 9.5 6.5 5.1 150 103 814 TC Rating 100 9.1 9.5 9.9 92 96 1005 VA Rating 100 5.0 8.5 5.0 59 100 596 PPI Rating 50 9.8 9.8 9.9 49 49 50

941 770 749

RAW DATA FINAL POINTSCRITERIA WEIGHTSNO

Selection Steps – Part A

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VendorVendor

STEP 1: STEP 1: RFPRFP

Project CapabilityRisk Assessment

Value Added PPI VendorVendor

STEP 2STEP 2

Interviews

VendorVendor

STEP 3STEP 3Prioritize

forShort List

VendorVendor

STEP 4STEP 4

Move forward to Part B

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Selection Process – Part B• Short listed firms

• Separate Evaluation Criteria

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Best Value Model

How to Clarify a PlanWhat is it / Why is it important?

• Period of time allotted before work begins for the Proponent to:

– Present their project/service plan

– Set a plan for its delivery / clarify that their plan is accurate

– Identify the risks and issues that could cause the plan to deviate

• Identify what you don’t know and when you will know it and how the plan could change based upon what you discover

• Set plans to minimize those risks from occurring• Address all the concerns and risks of the client

How to Clarify a Plan What is it / Why is it important?

• Period of time allotted before work begins for the Proponent to:

– Identify what you need from the client and have a plan for getting it

– Have completely aligned expectations between all parties so everyone knows what is going to transpire and what they are supposed to do

– Coordinate the schedule

Clarification / Preplanning Period

Sta

rt

Very High Level

Cost Verification

Included in Proposal

Excluded from Proposal

Major Assumptions

Major Client Risks/Concerns

High Level

Project Work Plan

Client Risks/Concerns

PA Schedule

Uncontrollable Risks

Response to all risks

Roles and Responsibilities

Value Added Ideas

Coordination

Review Functionality

Technical Level

Performance Reports / Metrics

Additional Documentation

Technical Details

Project Schedule

High level demos

PA Document

End

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Clarification / Preplanning Period

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Best Value Model

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Weekly Risk Report• Excel Spreadsheet that tracks unforeseen risks that impact the

project

• Client will setup and send to vendor once the Award is issued. ASU will provide additional training.

• The final project rating will be impacted by the accuracy and timely submittal of the WRR

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Unforeseen Risks

PERFORMANCE SUMMARY• Vendor Performance• Client Performance• Individual Performance• Project Performance

RISK MANAGEMENT PLAN• Risk• Schedule

WEEKLY REPORT• Risk• Unforeseen Risks

Measurement of Deviation from the ExpectationMeasurement of Deviation from the ExpectationManagement by Risk MinimizationManagement by Risk Minimization

Questions?

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Chris MillerContracting Specialist

chris.miller@ualberta.ca Phone: (780) 492-2250

Fax: (780) 492-0607