Lessons Learned by a Design Build General Contract

Report
Lessons Learned by a Design-Build General
Contractor: Johnston Construction
Trey Johnston, PE, DBIA, President & CEO and
Mike Geissler, PE, DBIA, Design-Build Manager
Who is Johnston Construction?
Johnston Construction Company
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Multi-trade Engineered Construction since 1976
Regionally focused, full service design-build environmental
general contractor
Integrated design-build partner with experience from raw
to finished water & influent to effluent
Treatment plant construction accounts for 80% of our
work with other related construction accounting for the
balance
Johnston Construction Company:
Differentiating Capabilities
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Fully Integrated Design-Build (small projects)
Team Approach to Design-Build (majority of projects)
Professional Certifications including PE & DBIA
Full Self Perform Capabilities (excavation, concrete,
mechanical)
Vast Design-Build Experience (since 1980s)
An Academic Perspective: Performance
Evaluation of Design-Build vs. Design-Bid-Build
for Water and Wastewater Facilities
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Research Study Directors
 Susan Bogus Halter, PhD, PE (Univ. of New Mexico)
 Keith Molenaar, PhD, DBIA (Univ. of Colorado)
 Jennifer Shane, PhD (Iowa State Univ.)
Research Study Objectives
 Develop a statistically-significant data set of municipal water and
wastewater infrastructure projects
 Quantify the relative cost, schedule, and quality differences
 Provide an overall evaluation of design-build and design-bid-build
delivery methods
Funded by the Water Design-Build Council
Key Study Findings: Performance Evaluation of
Design-Build vs. Design-Bid-Build
for Water and Wastewater Facilities
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The median schedule growth after contract award for design-build
projects is half as large as the schedule growth for design-bid-build
projects;
Design-build projects finish on or below contract price twice as
often as design-bid-build projects;
The average intensity (value of work completed per month) of
design-build projects is more than double that of design-bid-build
projects;
Contracts using guaranteed maximum prices (GMPs) are more
likely to have no schedule or cost growth as compared to projects
with lump-sum contracts; and
There is no significant difference in constructed quality between
design-build and design-bid-build projects.
Lessons Learned:
Design-Build Cost Advantages
Lesson Learned: DesignBuild Cost Advantages
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Design-Build RFPs provide project costs from
multiple teams prior to the owner investing in the
project
Minimal expense is incurred in developing the
RFPs
Sole source responsibility minimizes owner’s risk
Benefit from not having to adhere to Spearin
Doctrine (owner warrants plans and specs)
which does not apply to design-build
Lesson Learned: DesignBuild Cost Advantages (con’t)
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Change orders result from changes in scope
(not design omissions)
Standard bidding documents are not required
The common practice is for the design to comply
with standard specification and details
The owner should plainly state the specific
features wanted in the RFP
Lesson Learned: The Fast Track
Requires Team Commitment
Team Challenges of
Fast Tracked Projects
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Preliminary design, equipment selection and pricing are
performed concurrently during the RFP and proposal
stage.
The owner should provide direction on the acceptability
of the major equipment selection when the proposal is
accepted.
The design is finalized around specific equipment
manufactures rather than specifications.
Equipment may be procured and shop drawings may be
reviewed while the final design is being completed.
Lesson Learned: Use Cost Information
to Guide the Design
Use Cost Information to
Guide the Design
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General Contractors have the unique perspective of
working with many engineers and seeing different
approaches to similar projects – they frequently think
outside the box
Constructability issues can be identified and corrected
early - before costs are incurred
General Contractors may offer the most economical
construction means and methods during the preliminary
design phase.
Complete estimates can be done along with conceptual
designs
Lessons Learned: Key Tenets of a
Successful RFP
Lesson Learned: Key Tenets of
a Successful RFP
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Clearly define the project objective
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Be upfront about the level of owner control required
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Identify regulatory deadline
Upgrade plant while maintaining operation
Increase capacity
Submittal review & approval authority
Compliance with standard specifications and details
Identify plant specific items that must be included in the project
Use descriptive form (prescriptive only as needed)
Clearly define the evaluation criteria
RFP Format: General –
Descriptive
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A general RFP has a descriptive style
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Gives Design-Build team maximum flexibility and owner least control
Owner will realize the greatest cost and time savings
Owner should be comfortable with the lack of control or problems will arise during the
project
Recommendation: The design-builder should include a detailed scope of work with
clarifications in the proposal
Not recommended if the owner has strong preferences for equipment, materials and
finishes
Highly recommend an allowance/contingency format to allow the owner to add
upgrades or additional scope
Examples
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Preference for maximum thickness slabs
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Preference for FRP panels instead of gypsum board
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The addition of wash down stations for maintenance personnel
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Additional spare parts and extended warranties
RFP Format: Specification Prescriptive
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A Specification-based RFP has a prescriptive style
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Gives Design-Build team limited flexibility and owner greatest
control
Owner limits cost and time saving opportunities
Owner retains maximum control
Design creativity is limited as a result of specified equipment
and finishes
May expose owner to liability for performance and delivery
issues
Lesson Learned: Design-Build Offers
Flexibility in Proposal Evaluation
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Low Bid – price only
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Once prequalified, assume qualifications are equivalent
Frequently followed on smaller projects where a qualification proposal is
not warranted
The RFQ process is typically by invitation only based on the owner’s past
experience with Design-Builders
Experience & Price
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A point system can be developed for evaluating proposals
Experience and price proposals submitted in separate envelopes
Qualifications are rated before opening and evaluating price proposal to
avoid influencing the qualification evaluation.
Example: Clearly Defined Evaluation Criteria (next slide)
Example: Clearly Defined
Evaluation Criteria
Lesson Learned: A Successful Project
Requires Design-Build Process
Design-Build Processes
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Importance of specific design-build process is often
overlooked
Traditional processes must be reinvented to handle
typical characteristics of design-build
Design-build is often fast paced
Design-build often includes concurrent design &
construction
Design-build teams operate from many locations
Success requires a well organized, documented
process
Team experience with design-build is critical
Submittals Require Effective
Distribution & Clearly Defined
Direction
Submittals Require Effective
Distribution & Clearly Defined
Direction
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The process must evolve as technology moves forward to
encourage usage and participation
Encourages collaboration from all team members from
various design disciplines, maintenance groups and
operations personnel
Remote offices are included as if they were on-site
Communication is faster, easier and more efficient
The project will stay organized from procurement
through startup and training when comments are
organized and the comment history is maintained
Lesson Learned: Successful DesignBuild Teams are Aligned
A Design-Build Philosophy Guides the Team
to Make Decisions that Advance the Project
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JCC leads project throughout the entire process to ensure there are
zero accidents and project is on time and below cost
JCC will deliver value to the owner while containing costs and
maximizing profits
JCC accepts the additional risks that come with design-build but is
attracted to the opportunities to utilize our strengths in personnel,
processes, and knowledge base to achieve exceptional client
satisfaction
JCC will proactively address issues that threaten the safety of the
project participants, conformity with project schedule, and economic
return of the team
JCC will manage employees, subcontractors, vendors, suppliers, design
professionals, quality control professionals, owner representatives,
regulatory agencies and all other extended team members that
influence the project success
Lesson Learned:
Build Great Design-Build Teams
Design-Build Team Basics
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The best teams are built to offer the best value to owners
Trust and cooperation will determine the success of the
project
The reputation of team members is an important selection
criteria
 Integrity
 Quality
 Safety
The Design-Build Contractor and Engineer will protect their
quality reputation
Design-Build Team Success Factors
Can the team demonstrate a history of
success on past projects?
 How have they handled difficult situations on
past projects?
 Have the Construction PM & Design PM
worked cooperatively in the past?
 Will the Construction PM and Design PM
work well together?
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Lesson Learned: Efficiency and Speed
in Execution
6th Street Water Treatment Plant
Completion of the project within regulatory deadlines
required a fast-tracked construction schedule with close
coordination between team members
6th Street Water Treatment Plant
A fast-tracked project was required to accommodate treatment of a new raw
water source
Black & Veach Construction, Inc. worked with United Water to permit and
procure the selected equipment while selecting a design-build contractor
The design-build approach saved time over preparing 100% drawings and
specifications before contractor selection
Quantico Mainside Treatment
Plant Upgrade
A previous upgrade that had not addressed all treatment
requirements and left the plant unable to meet permitted
discharge limits. The design-build approach was selected
under a special fast-tracked contract method to identify key
issues and correct them quickly and economically.
Quantico Mainside Treatment
Plant Upgrade
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RFP presented a brief engineering report highlighting areas
which needed improvement
The successful team was to provide the most value for the
available funds
The project includes design, permitting, construction and
commissioning of improvements, such as:
Procurement was accelerated - shop drawings were requested
within one week of contract execution based on contingent
orders and verbal commitments.
Owner Control – various equipment scope changes increased
the time required to procure some equipment. These issues
were incorporated into the procurement plan quickly; however,
funding issues put strain on the schedule.
Quantico Mainside Treatment
Plant Upgrade (Chlorine Contact Tank)
Quantico Mainside Treatment
Plant Upgrade (UV Channels)
Lesson Learned:
Collaboration/Innovation
Amber Meadows Pump Station
The design-build approach yielded creative solutions to
seemingly impossible issues facing the upgrade of an existing
station with confined space issues, adjacent property
boundary constraints and bypass requirements.
Amber Meadows Pump Station
(Before)
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Station located inside 20ft sewer
easement
No right-away flexibility
Adjacent roadway & apartment
complex
Amber Meadows Pump Station
(After)
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Utilize suction lift pumps in lieu of
submersibles
Utilize existing wetwell
Minimize bypass pumping
Eliminate confined space issues
Little Patuxent WRF –
Dreyer’s Ice Cream
The additional of a major ice cream manufacturer in the service area
required the fast-tracked upgrade of the treatment process to handle
high organic loading. CMAR was chosen to incentivize the team to
provide a successful fast-tracked construction project in a
collaborative setting during the design and construction of the project.
Little Patuxent WRF –
Dreyer’s Ice Cream
Collaboration using an Alternate Delivery Method, CMAR, allowed the
project to progress through design, permitting and construction with
maximum input from all personnel
An open book approach was taken to cost estimating with owner and
owners representative participating directly in the building of the
estimate. An off-ramp was available if a price could not be negotiated
successfully.
Lesson Learned: Sole Source
Advantages
BIMC Sanitary & Storm
Pump Station
The single source responsibility of design-build and a clear
and concise proposal allowed the maintenance contractor
to upgrade aging infrastructure quickly.
BIMC Sanitary & Storm
Pump Station
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A small scope should not deter an owner from pursuing designbuild
Maintenance projects can be completed quickly – without major
permitting
Design, specification, and drawing preparation are minimized
A few projects were priced, not all were funded, and the
owner/maintenance contractor did not pay anything in design fees
Deer Path Woods Pump Station
Small pump station project performed for a repeat client.
The use of design-build reduced the overall project cost by
taking advantage of single source responsibility and
eliminating duplication found in a traditional design and
construction project.
Deer Path Woods Pump Station
Small
projects are well
suited to design-build
Design costs can be
minimized when a team has
a history of working
together
Cost savings are achieved
when drawings are
prepared by the installing
contractor
Lesson Learned: Effective
Use of Expertise
Northrop Grumman AIMS
Pretreatment Plant
JCC and Siemens teamed to turnkey the pretreatment plant for a new printed
circuit board manufacturing process. Selection of team members provided the
ability to fast track a specialized facility.
Northrop Grumman AIMS
Pretreatment Plant
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team provided the owner with a high quality turnkey solution
Siemens is a leader in pretreatment technology for the printed circuit board
segment and provided a system from their standard catalogue of products.
This provided a high confidence level in the ability of the system to perform
and allowed us to quickly progress the design
JCC is a quality, regional design-build contractor with the ability to provide
sole source responsibility and self perform all trades
Frederick Solids
Handling Upgrade
JCC and Buchart-Horn teamed to upgrade the digesters to accommodate ENR loading
and restore usage after complete failure of the covers occurred. The team had prior
knowledge of the digesters and plant operations and they had done a design-build
project to improve digester mixing on one of digesters previously.
Frederick Solids
Handling Upgrade
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The design-build team each brought significant
expertise to the project to benefit the owner
WSSC Energy Conservation Measures
Building a team of specialists, JCC and BG&E, partnered to
provide an energy performance project which upgraded failed
equipment without using the capital or operating budget.
WSSC Energy Conservation Measures
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Constellation Energy Division of BGE has the expertise to perform innovative
energy performance projects which self fund
JCC
provided the expertise to price many Energy Conservation Measures (ECMs)
based on conceptual estimates for evaluation by the owner
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procurement method had not been applied to waste water treatment in the past
- teamwork overcame those barriers
Sidebar: Design-Build Opportunities
in Energy Performance Contracting
Energy Performance Contracting
Provides Design-Build Opportunities
“Energy represents the largest controllable cost of
providing water or wastewater services to the public. Most
facilities were designed and built when energy costs were
not a major concern. With large pumps, drives, motors, and
other equipment operating 24 hours a day, water and
wastewater utilities can be among the largest individual
energy users in a community.” (Ensuring a Sustainable
Future: An Energy Management Guidebook for Wastewater
and Water Utilities)
Opportunities: Find the Low Hanging
Fruit – Energy Usage is an Easy Target
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Accounts for 3% of the TOTAL electric load in the US (CEE, 2007)
Eighty percent of water treatment plant energy consumption goes to pumping –
raw water, high service, backwash, and distribution system boosters (EPRI 2002)
Drinking water and wastewater treatment consume up to 35 percent of a
utility’s operating budget (Jacobs, Kerestes, and Riddle 2003/WRF)
Energy costs for water and wastewater can be 1/3 of a municipality's total
energy bill (Ensuring a Sustainable Future: An Energy Management Guidebook for
Wastewater and Water Utilities)
Electricity is the 2nd largest operating cost at WWTPs, ~25 to 40% of the total
operating budget (PGE, 2003)
Loads expected to increase by 20% in next 15 years due to increased
populations and more stringent regulations (Ensuring a Sustainable Future: An
Energy Management Guidebook for Wastewater and Water Utilities)
Electricity accounts for ~80% of all water processing and distribution costs at
WTPs (EPRI, 2002)
Action Areas
Takeaway: Opportunities
for Action
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Changes in regulations, aging infrastructure and new technology provide
potential opportunities
Energy efficiency investments often have outstanding rates of return and
can reduce costs at a facility by 5%, 10%, 25%, or more (Ensuring a
Sustainable Future: An Energy Management Guidebook for Wastewater and
Water Utilities)
Upgrades will SELF FUND though FUTURE ENERGY SAVINGS
Additional projects may be incorporated using the excess cost savings
Suggest Incorporating ECMs into the strategic plan
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ECMs often go hand-in-hand with increased efficiency
ECMs often include increased capacity
ECMs often include increased ability to meet effluent limitations
ECMs often reduce O&M requirements
ECMs result in reduced energy costs
Questions?
Trey Johnston, PE, DBIA, President & CEO and
Mike Geissler, PE, DBIA, Design-Build Manager

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