Water Design-Build Council Blog

How a Hybrid Procurement Approach was Successfully Used for an $800 Million Regional Wastewater Treatment Program

Posted by Reno Fiorante, P.Eng., PE, Senior Vice President, Water - Stantec on Fri, Apr 20, 2018 @ 10:24 AM

image1-3The Capital Regional District (CRD), located in Victoria, British Columbia, Canada, is currently in the process of implementing a major wastewater treatment program that includes construction of a new 108-ML/d secondary wastewater treatment plant, two major pumping stations, two large diameter force mains, a 20-km residuals pipeline, a wet weather attenuation tank, and biosolids resource recovery facility. This program culminates a five-year effort in which technical planning was completed by Stantec and district representatives.

The planning process for the CRD’s program centered on a re-evaluation of a previous plan developed for the district proposing the construction of five to seven smaller wastewater treatment plants located in various sections of the city. The new plan developed in partnership with the CRD now features one centralized plant that processes all flows within the CRD core service area, together with other project enhancements, resulting in cost savings of ~$400 million over the previously developed concept.

Capital costs, schedule, affordability, and a procurement strategy were the key challenges within the overall program. Determining the most appropriate procurement method took into consideration various risk allocation and transfer scenarios, together with a business case evaluation for the different program components. The business case evaluations determined that an optimal mix of procurement strategies for each of the program’s components could be delivered using an overall hybrid procurement model. This model would be able to achieve the best delivery method to optimally deliver the various program components while adhering to local market conditions. The delivery approach selected includes:

  • Procurement of the conveyance system through the use of design-bid-build delivery.
  • The use of fixed-price design-build delivery with short-term financing to procure the McLoughlin Tertiary Wastewater Treatment Plant.
  • Construction contracts for the two major pumping stations that have been procured through a fixed-price design-build delivery method.
  • Construction contracts for the biosolids resource recovery center that will be procured through a design-build-operate-finance-maintain (P3) contract with a 20-year operating period.

This hybrid approach to procurement, using multiple delivery types based on best fit for each project, enables the program to be delivered in a much shorter period than previously anticipated while at the same time optimizing risk transfer.

In 2017, construction on the wastewater treatment plant and a major pumping station began; with construction of the biosolids treatment facility commencing the spring of 2018. All conveyance packages will be procured in 2018 with total completion of the whole program projected by December 2020. The construction program including procurement is being delivered in only four years, a much quicker process as compared to that of a design-bid-build delivery.

What were lessons learned?

Selecting the correct project delivery method is not always straightforward and often a hybrid model specifically designed for the owner’s project is the best approach. In this instance, the selected hybrid procurement model, using multiple delivery types based on best fit for each project, enables the program to be delivered in a much shorter period than previously anticipated. The selection of the appropriate delivery model for any project must carefully consider technical, financial, risk, and local market conditions.

Reno Fiorante is a senior vice president with Stantec leading the delivery of APD projects across North America. Reno has been involved in the delivery of projects by non-traditional methods for over 25 years, including the 315 mgd Tesla Water Treatment Facility in San Francisco and the $700 million PCCP Pumping and Canals Closure Project in New Orleans. He has been the technical director for Stantec on the planning and procurement of the Capital Regional District’s Wastewater Treatment Program since 2009. Reno can be contacted by email at reno.fiorante@stantec.com

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