For owners considering collaborative delivery approaches for water and wastewater projects, such as progressive design-build (PDB) or construction management at-risk (CMAR), one of the biggest impediments to acceptance is the perception that the final cost of the project would be larger than a traditional design-bid-build and cannot be controlled. Based on our research, there are two primary reasons this stumbling block exists. One relates to the owner’s belief that their initial cost estimates are correct and that the project can be designed and constructed within their budget. A second, and perhaps more important issue, is that many owners still do not understand how the collaborative process evolves and how to reach a final acceptable price on the project, primarily because they are only familiar with the design-bid-build pricing process that uses the low-bid approach.
The questions most often raised by utilities or agencies who want to pursue design-build delivery for their pending project range from “What are the decisions I need to make in the procurement process?” to “How do I prepare my organization to make the right decisions about the best collaborative delivery approach for my project?” Answers to these questions, which were addressed recently in an education session with a large metropolitan utility, also provide the opportunity for us to share the results of WDBC’s 2017 research on what public officials say they have learned from pursuing a design-build project.
Upper Trinity Regional Water District’s (UTRWD) Riverbend Water Reclamation Plant (WRP), located in north central Texas near the city of Aubrey, needed to increase its capacity from 2 million gallons per day (mgd) annual average daily flow to 4 mgd with a peak flow rate of 16 mgd. This expansion was required to keep up with the economic growth occurring to the north of the Dallas-Fort Worth metroplex. In order to increase capacity, a new influent pump station, new screening and grit removal headworks, a new sludge pump station building, modification of sequential batch reactor basins to conventional aeration basins with ballasted activated sludge, and new secondary clarifiers were required.
Topics: Water Infrastructure
The water design-build industry defines collaborative delivery methods as approaches to procuring and delivering a capital project that involve close collaboration among the owner, the designer, and the contractor—from design through completion. These include construction management at-risk(CMAR), both fixed-price and progressive design-build, design-build-operate (DBO), and public-private partnerships (P3).
One of the questions frequently asked by owners is how and when to use “earned performance fees” in water and wastewater design-build projects. In this context, earned performance fees are defined as monetary benefits established to attain a specific achievement or goal.
The use of earned performance fees with any delivery method can be a powerful tool that helps both the owner and design-builder to better align accomplishing the project objectives. However, in a design-bid-build project, the intent of earned performance fees is often to drive innovation, collaboration, schedule, and cost savings, which are all hallmarks of design-build delivery. This begs the question: Why use earned performance fees for design-build delivery projects? One of the answers is: When earned performance fees are used with a design-build delivery project, it further stimulates maximizing innovation, collaboration, schedule, and cost savings – well beyond what can occur in the limited design-bid-build process, since much of the contractual arrangements are already locked in once the project goes out to bid.
Topics: Collaborative Project Delivery
The visible power of collaboration in a design-build delivery is never more evident than in the final phase of the project -- the startup and commissioning. Raise your hand if you can share a story about a startup that went wrong in a design-bid-build (DBB) contract—I bet most of you have your hands up!
Several of our industry’s best collaborative-delivery methods—particularly CMAR and progressive design-build—rely on an open-book process for developing cost and pricing during preconstruction. This process is used to achieve agreement on cost and then a price for the construction effort to proceed. In turn, the price is typically implemented either as a guaranteed maximum price (GMP) or a fixed-price contract provision.
Topics: progressive design-build
The success of collaborative project delivery methods, especially progressive design-build, is due in large part to the immediate engagement of an owner’s operation and maintenance (O&M) teams— specifically during design development and preconstruction. While this approach may appear difficult to execute, it’s actually quite simple when completed systematically.
Topics: Collaborative Project Delivery
Allowances and contingencies are often confused with one another, but understanding their differences is crucial to successfully executing project contracts.
In April 2016, the design-build team of Foley Company and Black & Veatch was awarded the Blue River WWTP Odor Control Phase 1 design-build contract for Kansas City, MO, Water Services Department. The proposal submitted contained two parts: 1) technical proposal and 2) lump sum fixed price with a 20-year life cycle cost analysis. The criteria for selecting the design-build team was a point system developed to evaluate the team’s technical background, experience, project approach, lump sum fixed-price construction and engineering work, and the life cycle operation and maintenance cost analysis.