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)