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Design–Build ContractsDesign–Build Contracts
G. Hardy AcreeDirector of Airports
Sacramento County Airport System
AdvantagesAdvantages
ofof
During Turbulent TimesDuring Turbulent Times
Collaborative Solutions/Tools for Controlling CostCollaborative Solutions/Tools for Controlling Cost
Contract Pricing Based Upon 100% DocumentsContract Pricing Based Upon 100% Documents
GMP Establishes Target Budget for Project TeamGMP Establishes Target Budget for Project Team
Deferred EncumbranceDeferred Encumbrance
Owner Takes Advantage of Material PricingOwner Takes Advantage of Material Pricing
Sufficient Competition to Qualify for FAA FundingSufficient Competition to Qualify for FAA Funding
Shared RiskShared Risk
AgendaAgenda
Dewatering Volumes Exceeded PermitDewatering Volumes Exceeded Permit
Teams Worked Together to Find Solutions With Minimal Impact to Cost and Schedule
Tug Tunnel Phasing & CostTug Tunnel Phasing & Cost Phasing Modification Was Agreed Upon
Design Revision Saved $2,000,000.00
Delete Hotel From Landside GMPDelete Hotel From Landside GMP
Collaborative Solutions/Tools for Controlling CostCollaborative Solutions/Tools for Controlling Cost
Opportunity to Incorporate VE Items Prior to Final PriceOpportunity to Incorporate VE Items Prior to Final Price NegotiationsNegotiations
Contractor had Incentive to Identify VE ItemsContractor had Incentive to Identify VE Items
DBC Accrues 25% of Savings
Encumbrance Occurs when Packages are AuthorizedEncumbrance Occurs when Packages are Authorized
Budget Tracking by Work PackageBudget Tracking by Work Package
VE on Airfield Pavement Based on Field InformationVE on Airfield Pavement Based on Field Information
Changed from Base Assumption Based on Field Investigation
Results:Results: $5,000,000.00 Reduction from BAFO (from GMP)
Contract Pricing 30 – 100% DocumentsContract Pricing 30 – 100% Documents
GMP Became the Target BudgetGMP Became the Target Budget
Owner Contingency Held in ReserveOwner Contingency Held in Reserve
Contractor Had Incentive to Stay Within GMPContractor Had Incentive to Stay Within GMP
Design Team Used GMP to Make DecisionsDesign Team Used GMP to Make Decisions
The GMP Drove Value Engineering DecisionsThe GMP Drove Value Engineering Decisions
GMP Establishes Target BudgetGMP Establishes Target Budget
Airside Deferred Encumbrance ScheduleAirside Deferred Encumbrance Schedule
Landside Deferred Encumbrance ScheduleLandside Deferred Encumbrance Schedule
Postponed Bond Issuance Until Market ImprovesPostponed Bond Issuance Until Market Improves
Deferred EncumbranceDeferred Encumbrance
IntroductionIntroduction
LandsideLandside
DeferredDeferred
EncumbranceEncumbrance
ScheduleSchedule
Landside Deferred Encumbrance Schedule
$-
$50,000,000.00
$100,000,000.00
$150,000,000.00
$200,000,000.00
$250,000,000.00
$300,000,000.00
FY 09 - 1st FY 09 - 2nd FY 10 FY 11 FY 12
Original Program Budget Deferred Encumbrance Schedule
AirsideAirside
DeferredDeferred
EncumbranceEncumbrance
ScheduleSchedule
Airside Deferred Encumbrance Schedule
$-
$20,000,000.00
$40,000,000.00
$60,000,000.00
$80,000,000.00
$100,000,000.00
$120,000,000.00
$140,000,000.00
$160,000,000.00
$180,000,000.00
$200,000,000.00
FY 09 - 1st FY 09 - 2nd FY 10 FY 11 FY 12
Original Program Budget Deferred Encumbrance Schedule
Drop in Price of Stainless SteelDrop in Price of Stainless Steel
20% Cost Reduction for Landside Roof Material
Drop in Price of Structural SteelDrop in Price of Structural Steel
10% Cost Reduction for Landside Structural Steel
Cost Reduction in Mechanical & Electrical EquipmentCost Reduction in Mechanical & Electrical Equipment
Landside & Airside Savings Exceed $1,000,000.00
Owner Takes Advantage of Material PricesOwner Takes Advantage of Material Prices
Pre-Qualification of Prime ContractorPre-Qualification of Prime Contractor
Pre-Qualification of Sub-Contractor AssociatesPre-Qualification of Sub-Contractor Associates
Submittal of Initial Bid Included Pre-Qualified Prime & SubsSubmittal of Initial Bid Included Pre-Qualified Prime & Subs
Scoping to Clarify ScopeScoping to Clarify Scope
Best and Final Offer Price ProposalBest and Final Offer Price Proposal
Final Selection Based Upon Qualification & PriceFinal Selection Based Upon Qualification & Price
Sufficient CompetitionSufficient CompetitionQualifies for FAA FundingQualifies for FAA Funding
Overcoming FAA’s Resistance to Design-Build
Contractor Submitted GMP Based Upon 30% DocumentsContractor Submitted GMP Based Upon 30% Documents
Owner/Contractor Held Scoping Sessions to Clarify ScopeOwner/Contractor Held Scoping Sessions to Clarify Scope
Owner Negotiated a Contingency Amount in the DBC GMPOwner Negotiated a Contingency Amount in the DBC GMP
To Protect the Contractor from Cost Increases
To Cover Items Missed During GMP Preparation
To Cover Design Development
Use of Escrow Bid Documents to Confirm Pricing AssumptionUse of Escrow Bid Documents to Confirm Pricing Assumption (Hotel is an example of where the County Benefits)
Contractor Included Qualification in Contract AgreementContractor Included Qualification in Contract Agreement (Allowed DBC to do this due to lack of clarity – dewatering is an example)
Shared RiskShared Risk
Questions?Questions?
Thank YouThank You
Designer & Contractor(2 separate contracts)
Design/Builder(1 combined contract)
Low BidTotal Construction Cost is
sole criteria for final selection
Best Value BidTotal Construction Cost and other criteria are weighted factors in the final selection
Qualifications Based
SelectionTotal Construction Costs are
not a factor in the final selection criteria
# of CONTRACTS
SELECTION TYPES
Delivery Method Options – Stop 2 (with Selection Types)