2011-06-09 Work Session Kodiak Island Borough
Assembly Work Session
Thursday, June 9, 2011 7:30 p.m., Borough Conference Room
Work Sessions are informal meetings of the Assembly where Assembly members review the upcoming regular meeting agenda
packet and seek or receive information from staff. Although additional items not listed on the work session agenda are discussed
when introduced by the Mayor, Assembly, or staff, no formal action is taken at work sessions and items that require formal
Assembly action are placed on regular Assembly meeting agenda. Citizen's comments at work sessions are NOT considered part of
the official record. Citizen's comments intended for the "official record" should be made at a regular Assembly meeting.
CITIZENS' COMMENTS (Limited to Three Minutes per Speaker)
ITEMS FOR DISCUSSION — None.
PACKET REVIEW: Resolution No. FY2011 -28 Adopting the
PUBLIC HEARING None. Comprehensive Economic Development
UNFINISHED BUSINESS Strategy (CEDS) 2011.
Direction to Proceed With the Alaska Resolution No. FY2011 - 29 Supporting
Waste Proposed Roll Cart Service Establishment of Port and Harbor Set -Aside
Expansion Areas. Funding in the Civil Works Program, Army
NEW BUSINESS Corps of Engineers, Pacific Ocean Division.
CONTRACTS Resolution No. FY2011 - 30 Implementing
Contract No. FY2011 - 30 Between the Alternative Delivery Methods for the Kodiak
Kodiak Island Borough and the Kodiak High School Renovation and Addition
Chamber of Commerce of Kodiak, Alaska Project With the Approval of Alaska
for Economic Planning and Project Department of Education and Early
Development Within the Kodiak Island Development.
Borough for FY2012. ORDINANCES FOR INTRODUCTION
Contract No. FY2010 -30A Amendment No. Ordinance No. FY2011 -17 Rezoning a
1 to the Solid Waste Collection Services Portion of Tract G and Tract H, Bells Flats,
Alaska Subdivision From PL— Public Use
Contract. Zone To RR1 -Rural Residential One.
Contract No. FY2011 - 34 Janitorial Services Ordinance No. FY2012 - 02 Submitting The
for the KIB Administrative Building. Question of the Adoption of a Sales Tax to
Contract No. FY2011 - 35 Janitorial Services the Qualified Voters of the Borough at the
for the Kodiak Fisheries Research Center. October 4, 2011 Regular Election.
RESOLUTIONS
*Resolution No. FY2011 -27 Approving OTHER ITEMS
the Village of Karluk and Its Native Village Confirmation of the Assembly Appointment
Council to Participate in the FY2012 to the Personnel Advisory Board.
Community Revenue Sharing Program.
MANAGER'S COMMENTS
CLERK'S COMMENTS
MAYOR'S COMMENTS
ASSEMBLY MEMBERS COMMENTS
KODIAK
_ = CHAMBER
_ _ OF COMMERCE
100 E. Marine Way, Suite 300, Kodiak Alaska 99615 • (907) 486 -5557 • FAX: (907) 486 -7605
www.kodiak.org • Email: chamber @kodiak.org
June 9,2011
Kodiak Island Borough
710 Mill Bay Road
Kodiak, AK 99615
Dear Mr. Mayor and Borough Assembly Members,
I apologize for not being able to be with you this evening to answer questions on Contract No. FY2011-
30. As you know the Chamber of Commerce and Kodiak Island Borough have partnered in Economic
Development for many years and this contract is a continuation of that partnership. The Board of
Directors and Employees of the Chamber understand the difficulties in balancing budgets and cutting
expenses. We also feel that Economic Development is extremely important in guaranteeing the
economic prosperity of this community. Please note that the base amount of this contract hasn't
changed since 2003 and we are confident that we will continue to achieve or exceed our goals at this
funding level. Last year the city and borough requested that the Chamber of Commerce attend NPFMC
meetings on their behalf and the Chamber agreed to do that with a small increase of $2,000 to the
contract. We will continue to attend these meeting on your behalf as long as you need us too, in fact I
am leaving Saturday morning to attend the June meeting and look forward to updating you on that
meeting at a future date.
As you heard during my presentation on May 19` the current economic indicators are fairly positive for
Kodiak and the Chamber of Commerce takes pride in the economic stability of our community at a time
of national economic instability. With your support we are confident that we will continue to move
toward the shared goal of economic prosperity . Please feel free to contact me at the Chamber of
Commerce, or email trevor@kodiak.org, with any questions you may have on this contract.
Sincerely,
Trevor Brown
Executive Director I JUN 9 2011 1
Kodiak Chamber of Commerce I J
KIB MANAGER
Dedicated to Kodiak's Economic Future
__- KODIAK
_ - CHAMBER
_ OF COMMERCE
100 E. Marine Way, Suite 300, Kodiak Alaska 99615 • (907) 486 -5557 • FAX: (907) 486 -7605
www.kodiak.org • Email: chamber @kodiak.org
June 9, 2011
Kodiak Island Borough
710 Mill Bay Road
Kodiak, AK 99615
Dear Mr. Mayor and Borough Assembly Members,
I apologize for not being able to be with you this evening to answer questions on Resolution No. FY2011-
28. The Chamber would like to present the Comprehensive Economic Development Strategy to you for
your approval. The Chamber's Economic Development Specialist, with the oversight of the CEDS
Committee, updates the document each year. Once the resolutions are received from the City of Kodiak,
Kodiak Island Borough and Kodiak Chamber of Commerce the updated document will be forwarded to
US Dept of Commerce EDA. In order for communities to receive federal funding, they are required to
include their Capital Improvements Projects list in the CEDS. Please feel free to contact me at the
Chamber of Commerce, or email trevor@kodiak.org, with any questions you may have on this
document.
Sincerely,
Trevor Brown
Executive Director
Kodiak Chamber of Commerce
I JUN 9 2011 _J
i 1
•
K B MANAGER
Dedicated to Kodiak's Economic Future
Jensen
Yorba
Lott
Inc. ® MEMORANDUM
Designing Alaska Since 1935
Date: June 2, 2011
To: Ken Smith
From: Tony Yorba
RE: KHS Alternative Delivery Introduction
CC:
Summary: It has been proposed to use an alternative methodology to design- bid -build to
select a contractor to accomplish the improvements to the Kodiak High School. Prior
approval of an alternative delivery method must be obtained by Department of Education
and Early Development (EED). One of the EED criteria is for the governmental agency
having authority (in this case, the KIB Assembly) to approve the use of an alternative delivery
method. This memo and attachments are provided to assist the Assembly in determining if
they will approve an alternative delivery methodology.
Jensen Yorba Lott Inc. entered a contract with the Kodiak Island Borough (KIB) for the design
and construction administration of the additions and renovations to the Kodiak High School
(KHS), with the assumption that the work would be contracted using a traditional design bid
build (DBB) project delivery methodology. Since that time we have spoken with numerous
individuals and agencies about the potential advantages of an alternative project delivery
methodology, specifically a General Contractor as a Construction Manager, (GC /CM), where
the general contractor is reimbursed on a fee basis, and where the general contractor is bound
by a guaranteed maximum (GM) cost of construction.
In a traditional DBB process the contractor provides a bid promising to build a building
according to the drawings and specifications for a price arrived at during the bidding period.
The contractor does not participate in the design process, nor provide input during
development of phasing. In the GC /CM method, the contractor is selected on a qualifications
basis coupled with his proposed fee. The fee is usually expressed as the costs of the pre -
design services and a percent of the cost of construction or a combination of elements
including the contractors overhead and profit, his general conditions costs and other defined
costs. The selection of the GC /CM usually occurs at the schematic phase. The general
contractor thus becomes a partner with the owner and the architect in developing the specifics
of the design, providing cost data, constructability and value engineering assistance as well
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PAGE
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assistance with the phasing plan. The contractor usually commits to a guaranteed maximum
construction price earlier in the process than a DBB project. The GM can be determined all at
once, or determined in phases, as design is completed and the scope of work resolved.
Construction can proceed much the same as a DBB project, except that savings on the GM
accrues back to the owner rather than the contractor. The savings can be put back into the
work (less the contractors agreed fee). This encourages the contractor to be efficient- the
more efficient the work, the more the contractor can make, and the more construction the
owner can accomplish.
In researching this project, we understand that a similar delivery to GC /CM was used on
both the Hospital and the KFRC projects, and that some believe the process was flawed. It
appears improvements can be made over the previous delivery system so that: there is more
accountability on the part of project management; that the RFP process used to select the CM
can better select a CM firm who is more compatible with KIB; and so that quality control and
quality assurance is maintained and managed by the KIB to the betterment of the project.
We have consulted the Alaska Department of Education and Early Development, the
Anchorage School District, and the Construction Owners of America Association to learn
about their experiences with alternative delivery methods. We have also discussed the
process with members of the design team that have used such a delivery method in the past.
We attach the following exhibits that describe the process, the experiences of others and some
of the advantages and disadvantages of the process:
1. Draft Memo to Department of Education and Early Development requesting approval
to use the GC /CM process. This memo has not yet been circulated to EED. It
describes the method used to decide on a delivery methodology, using a process
required by EED.
2. Notes from Teleconference with Mike Price. Mike is a project manager with the
Anchorage School District. The ASD has used the GC /CM process a number of times
and are well satisfied with it.
3. Email from Steve Theno to Tony Yorba, describing the advantages and disadvantages
of the GC/ CM process.
4. Email from Jay Lavoie to Tony Yorba, describing his experience with the GC /CM
process.
It is important to reiterate that from a contractual perspective, the delivery method does not
change the roll or work level of the architect- your E/A team will still work directly for the
KIB, we answer to you and you alone, and we anticipate having a strong role in the quality
control /quality assurance of the project during construction. That said, the prospect of
teaming with the contractor for a what will in all likelihood be a long and complex project is
appealing because it invites the contractor to be a partner in the development of the
construction methodology, ensuring that the phasing and elements of the work are the most
efficient possible.
Jensen Yorba Lott, Inc is available to assist with any additional questions on this matter.
G:A_Projects \10077 \CorrAproject delivery \alternative delivery request cover page.docx
ARCHITECTURE • INTERIOR DESIGN •CONSTRUCTION MANAGEMENT
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PAGE 2
•
Jensen
Yorba
Lott H
Inc. I MEMORANDUM
Designing Alaska Since 1935
Date: May 23, 2011
To: Ken Smith
From: Tony Yorba
RE: KHS Alternative Delivery Request draft
CC:
Kodiak High School started with the Kodiak Aleutian Vocational School constructed in 1966.
Since then at least 12 major renovation and addition projects have occurred, in addition to
numerous other small projects, more than doubling the original size of the building and
connecting physically to the Kodiak Middle School and the Gerald C. Wilson Auditorium.
The facility has served the community well. However, most spaces in the high school have
not been upgraded since 1984. Plans in 1994 for expansion and renovation were scaled back
due to lack of funds to a series of small, ad -hoc renovations that ultimately were unsuccessful
in addressing deficiencies. It is an underperforming, overcrowded school, recognized as
such by the local community which voted in 2008 to support bond funding for an addition
and renovation of virtually all elements of the school.
The scope of the renovation /addition was originally conceived during a two year
masterplanning process. In response to that process, the District commissioned and
completed an education specification describing how education would be delivered at the
new facility. The bond to fund the renovation was conceived, advertised and passed, and a
design team selected in Fall of 2010. Pre - design started in December 2010, followed with
conceptual design that culminated in approval of a conceptual design by the Kodiak Island
Borough May 5, 2011. The preferred plan will include several site development phases that
will need to coordinate with multiple building phases, as every teaching, activity and support
space will be affected. The site is very small compared to other schools of similar student
bodies, with little space for staging and material storage. Thus, one of the key challenges will
be to ensure that a quality education is delivered during what will be a multi -year
construction period, while efficiently transforming the entire facility. The complete
cooperation, contribution of expertise and ultimately the contractual buy -in of the phasing
strategy by the contractor will be critical to accomplishing the project goals. This input is best
provided early in the project, to assist with project decisions regarding construction costs,
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PAGE1
schedules, disruption planning and phasing, scope identification, constructability, value
engineering and other matters.
The Kodiak Island Borough and the Kodiak Island School District (abbreviated to KIB) has
reached out and discussed the risks and benefits of alternative delivery methods with project
managers at Anchorage School District. KIB joined the Construction Owners Associations of
America (COAA) specifically to learn about alternative delivery methods and discuss the
experiences other organizations have had implementing them. They receive ongoing advice
from several members including project managers running large University design and
planning departments. The design team includes DLR Group architect Craig Mason who is
currently finishing his 4th high school renovation project delivered via a CM /GC with
qualifications based selection. KIB has reviewed the EED Project Delivery Method
Handbook. They have reviewed the alternative delivery flow chart and approval
methodology. Using the methodology proposed in the handbook, they evaluated the "Project
Need Factors" and identified four need factors that would be applicable to the project:
• Tight Project Milestones or Deadlines- the preliminary schedule identifies several
interim summer construction phases that must be accomplished within the duration of
a larger construction project in order to minimize disruption of ongoing school
activities.
• Overlap of design and construction phases will be necessary- site development must
take place while design of follow on construction is completed.
• There will be significant potential for changes during construction- Phased
renovation will take place in portions of the existing buildings that have been modified
many times in the past, increasing the level of unknowns and almost guaranteeing that
changes will occur.
• The input of a contractor will be needed during design - while the KIB has a long
history of multi disciplinary project management due to their commitment to their
institutionalized peer review Architectural Review Board, it will be critical to have the
contractor participate and contribute to phasing scope, scheduling, cost estimates,
value engineering and constructability.
Application of the Project Need Factors to the project conditions suggest that an alternative
delivery method is indicated to accomplish project goals and provide greatest benefit to the
school, state and the community.
The "Success Factors" were next evaluated, with the following identified as most applicable
to this project:
• KIB has no restriction to use of Alternative Project Delivery Methods. A resolution
from the Kodiak Island Borough Assembly upholding the use of an alternative project
delivery method will be forthcoming.
• KIB does have in -house personnel experienced with managing and maintaining quality
in design and construction.
• KIB has access to in -house personnel experienced in verifying the quality of design and
construction through their contract with the design team
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PAGE 2
• KIB does have the need and ability to participate in the selection of trade contractors
and suppliers to ensure greatest participation and flexibility in decision making,
especially concerning phasing.
• KIB does have the need to have complete access to all construction information
including costs, to ensure that the KIB can recoup cost savings.
• KIB does have the in -house design resources to oversee design professionals.
The design team is already under contract. They have identified that the complexity of
phasing and other construction issues warrant early involvement of a contractor and
encourage such a roll. The design team and the KIB agree that the early involvement of the
GC /CM firm and an ongoing partnering relationship with all parties will provide many
benefits for the all parties to the contract and to the State of Alaska. Some of those benefits
include:
Commitment to the Community: A bond commitment has been made for project funding,
but the Kodiak community is keenly interested in a best value approach to this project - but in
the best sense of the term- quality of contractor, life cycle value of the elements of
construction, best value implementation of the program and the potential for the community
to recoup project savings. A GC /CM approach with a qualifications based selection that
establishes the General Contractor's basic fee and general conditions costs is indicated as best
meeting the project commitments to the community.
Minimize Disruption of Education: All programs will continue to be delivered throughout
the design and construction process. Due to the size of the project, construction will occur
over several years. Thus, any disruption could have serious, long term affects on a whole
class of students. Minimizing this impact is critical. The GC /CM method will help ensure
full participation and buy -in of project phasing by all parties. Design team and contractor can
fully coordinate the construction phasing prior to construction start up to mitigate disruption
of KIB programs. Such coordination will allow the necessary phasing to proceed as efficiently
and cost effectively as possible.
KIB Contract Management: KIB has a long history of actively involving construction
professionals early in the design process to control costs while obtaining efficient, high
performing facilities. Bringing the GC /CM into the design process early is a natural
continuation of existing project methodology and maximizes the potential benefits of a multi
disciplinary design approach.
Timely Contractor Input: The inclusion of a GC /CM in the design phase allows the
contractor to provide assistance in determining the scope of work to be accomplished at each
phase. They can help evaluate the cost and schedule implications of phasing scenarios and
schematic design options to identify best cost and lowest risk for the project.
Ongoing Benefits: It is the intention of the KIB to include the GC /CM firm into the process
in time to contribute to schematic design decisions, when their input is most effectively
implemented. However, the process envisioned by the KIB would extend benefits all through
the process, including:
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PAGE 3
Actively involve the contractor in developing cost estimates at each design phase.
Overall cost management would be maintained by including the contractors expertise
with Alaska market cost predictions with the design team expertise in identifying
appropriate building assemblies and systems. Independent cost estimates would be
prepared by the design team, to ensure a defensible solution;
Provide ongoing constructability input;
Provide ongoing value engineering input;
Provide ongoing schedule and phasing input, not only with respect to the general
work but also with respect to subcontract and specialty contract work, both for
procurement of specialty or long lead items as well as installation issues;
Provide peer review of design documents, and the effectiveness of the verbal and
graphic communication contained in them;
Use of the GC /CM process as a qualification based selection will allow the design team
to include detailed information on building components into the Revit model. This
will most efficiently utilize the BIM potentials of Revit, and help the KIB to maintain
and manage the building.
Contractor Participation in Design Progress Meetings: The GC /CM process allows the
owner to benefit from the contractors expertise with building and maintaining schedules by
incorporating that expertise throughout the design and construction process. Involvement of
the GC /CM in the weekly design progress meetings will help ensure that schedules are
maintained, milestones are met, and resources are re- allocated as required before challenges
become impasses.
Shared Project Accountability: The GC /CM process envisioned by the KIB will foster a high
degree of team confidence and trust by using an open accounting process with respect to
project costs.
Participation in Selection of Sub - Contractors: The GC /CM process envisioned by the KIB
would allow them to participate in the selection of subcontractors and suppliers, with
potential opportunities for cost savings. This would include: collaboration with phasing to
obtain the most efficient and competitive trade subcontracts; utilize the CG network of trades
and suppliers to obtain the best quality and maximum value; ensure a fair and open selection
process by allowing the Owner to observe and participate in the process; provide early
warning of potential unforeseen cost impacts so that adjustments can be made in time to
adjust the design or scope of work accordingly.
Quality Control Program: Selection of a most qualified CG /CM ensures that, along with the
designers, a project team is assembled that best reflects the values and aspirations of the
community, and where there is real commitment to the success of the project. The GC /CM
firm will develop and implement a quality control program for all construction and inspect
the work as it is being performed to assure the materials furnished and quality of the work
performed is in compliance with the design documents and industry standards. The design
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PAGE 4
team, with the KIB will provide construction observation, special and selective inspections for
quality assurance to ensure that GC /CM quality control plan is effective and meaningful, and
in a timely fashion so that effective changes can be made in the plan if found necessary.
Due to the complexity and age of the existing buildings, changes will be inevitable. The
GC /CM method can ensure that the impacts of such changes are mitigated in a timely and
cost effective manner. As discussed previously, the process envisioned fosters a relationship
of trust and collaboration between the project team members which can speed the resolution
of challenges and mitigate their effects.
KIB has a long history of collaboration on construction projects. The design team has deep
experience with the GC /CM process and qualification based selection. The benefits inherent
in the process are in line both with the capabilities of the project team and the expectations of
the Kodiak community. The GC /CM method with Competitive Qualifications Selection
would minimize risk, and maximize the return on the investment in this project by the people
of Kodiak and the State of Alaska. Therefore, the Kodiak Island Borough and the Kodiak
Island Borough School District request approval to use the GC /CM process using a
Competitive Qualifications Based Proposal to select a general contractor. We can provide
additional information such as resolution upholding the implementation of an alternative
delivery method and the proposed RFP process as requested.
Please contact me with any questions regarding this request.
G:A Projects \10077V Corr \project delivery \alternative delivery request.docx
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PAGES
Tony Yorba
From: Jay Lavoie
Sent: Thursday, June 02, 2011 2:34 PM
To: Tony Yorba
Cc: Maureen Benner
Subject: Re: khs alt delivery GC /CM
Tony,
My thoughts on CM /GC delivery are based on having work on nine projects where we have used this method of
delivery.
Advantages
• General Contractor (GC) onboard earlier in the process. They give input based on specifics as to cost
and coordination items that assist in a smoother project.
• More of a corporation between the contractor, owner, designers.
• Ability to be flexible in scheduling changes.
• Ability to select GC based on qualification and fee as appose to a low bid with less control over
qualifications.
• The chance of a bad bid making you loss a season is no longer a problem, the contractor is onboard and
costing the project at earlier stages, so you have two opinions on cost that are reconciled and problems
resolved before you get the final documents.
Disadvantages
• Less competition at the general contractors level, can lead to more costly project. This is not a big
concern as there is usually an element of cost in the selection criteria.
• Slightly bigger general requirement effort on the part of the GC. I think this is offset by the lower fees
that are negotiated, more of a money shift.
I'm very much for the process where the building is complicated or scheduling and phasing is difficult. I think
it would be well suited to this project. Alaska has four or five well qualified contractors that are very familiar
with this process, and this only increases the odds of success.
Hope this is of value to your decisions.
Jay
On Thu, Jun 2, 2011 at 3:10 PM, Tony Yorba <tonyAiensenyorbalott.com> wrote:
If you think of any, could you send me an email with any thoughts on the advantages /disadvantages of using a
GC /CM process for the high school? thanks
Tony Yorba
Jensen Yorba Lott, Inc.
522 West 10th Street
Juneau, AK 99801
www.jensenyorbalott.com
2
•
Tony Yorba
From: Steve Theno
Sent: Thursday, June 02, 2011 11:22 AM
To: Tony Yorba
Cc: Robert Posma; Roger Full
Subject: Thoughts on GCCM
Hi Tony:
Here are some thoughts on GCCM from our past experience:
Advantages
1. GCCM can provide good input on budget, schedule and constructability issues.
2. GCCM can provide good input on material selection, project specific construction means and methods and
construction costs.
3. Good alternative views on VE suggestions and options
4. Beneficial in identifying where ambiguities exist in working drawings, and where additional clarifications and detailing
may be warranted.
5. With the GCCM process, there is the ability to mutually and interactively evaluate specific materials and major pieces
of equipment, and associated pricing and select and order what is best value for the Owner.
6. Good opportunity to identify long lead items and critical path items and pre -order or adjust phasing and work
packages to achieve schedule and cost that is in the best interest of the Owner.
Disadvantages
1. Does not necessarily result in lowest project cost
2. GCCM can have a tendancy to shape or influence design and project decisions to his best advantage as opposed to the
Owners best advantage
Lessons Learned
1. After selection of GCCM, participate with GCCM in similar qualifications based selection of MEP subcontractors. MEP
systems have major impact on cost, schedule, space planning, etc. Having the major subs on board to participate
interactively in the design process is a major benefit.
2. Involve GCCM and key subs early in the design process (end of SD phase)
3. Insure GCCM and subconsultants have a positive track record of actively and constructively engaging in design review,
VE analysis, scoping, pricing, and constructability review. We have had experiences where the GCCM used the process to
help them scope and price the work, but did not really actively engage in the other areas.
4. Have clear understanding at each phase of pricing from the GCCM the level of design development, the details that
are yet to be developed and the allowances for unknowns. Interactive presentations by the design team at each phase
can help establish this.
5. Have a clear understanding of the basis for the GMP, what allowances remain for scope and detail unknowns and how
changes will be priced.
6. The GCCM may suggest a host of alternative materials, methods and design options. Recognize that evaluation of
these alternatives by the design team requires additional effort. Also, it is important to recognize that alternative
suggestions does not necessarily mean the original design or design process was flawed or failed. They are just that,
alternatives to be constructively considered by all parties.
7. The GCCM process skews the normal project milestones, design phases, review steps, document packaging and
construction scheduling. It is a much more dynamic process, with various elements of the project at different phases at
the same times (i.e. rough site work may be in construction, structural steel in shop drawing review and MEP systems in
construction documents design phase). All parties need to recognize the need for enhanced project management
strategies, additional design team effort and the need at each step, to clearly understand the unknowns, the risks and
recognize there will be some potential re -work, etc.
1
Overall, I believe the GCCM is a preferred process. It offers lots of potential advantages over conventional design -bid.
But, it is a much more dynamic process, and, as is usually the case, the success is still heavily dependent on what each of
the participants brings to the effort.
Cheers,
Steve
Steven NI. Theno, PE
Principal
PDC Inc. Engineers
Planning Design Construction
2700 Gambell Street, Suite 500 I Anchorage, Alaska 99503
v 907.743.3200 I f 907.743.3295 I www.pdcenq.com
"Transforming Challenges into Solutions"
2
Jensen Ina
Yorba
Lott
Inc. MEMORANDUM
Designing Alaska Since 1935
Date: May 11, 2011
To: Ken Smith
From: Tony Yorba
RE: KHS Alternative Delivery Methods Discussion with Mike Price
CC:
A teleconference was held on May 5, 2011 with: Mike Price, Anchorage
School District Project Manager; Edie Knapp, Anchorage School District
Project Manager; Ken Smith, KI B Project Manager; Tony Yorba, Jensen Yorba
Lott, Inc.
Purpose of the meeting was to discuss Mr. Price' experience with alternative
delivery methods with Anchorage School District and discuss how they
could be applied to the Kodiak High School Addition and Renovation.
Discussion:
1. Most ASD contracts are traditional design bid build delivery systems.
2. EED continues to review applications for alternative delivery methods
using the methodology described in their "Project Delivery Method
Handbook dated November 2004. This includes the submittal
requirements on page 31 of that handbook.
3. ASD has used a number of alternative delivery methods, based on the
specific requirements of each project:
4. Construction Manager at Risk (GC /CM):
Used for large, complex projects with renovation, coordination and
phasing challenges. They used the method to shorten construction
process and simplify management. They cautioned that it was important
to use established protocol and not to try and invent processes.
Since the cost of construction materials is essentially the same for
everyone- an RFP is used to select the CM at risk firm, with pricing
limited to mark -up or general conditions which vary from firm to firm.
5. Design - Build:
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PAGE1
Used for projects with few unknowns and straightforward requirements,
such as construction of an elementary school using a prototype building
plan.
6. Prequalification of a General Contractor:
A two tier procurement request for construction projects where the first
procurement is for qualification based selection of prospective bidders.
After pre - qualification, contractors bid in a traditional manner. The
advantage is that bidding is limited to truly qualified bidders.
This is used on projects where conditions (schedule, construction
challenges etc) require that only contractors with successful history of a
particular type project be allowed to bid.
7. ASD uses AlA 201 "GC at Risk" as the basis of contract boilerplate
documents.
8. An alternative delivery approach is to select a contractor to be selected on
a qualifications basis. GC would assist with pre - design on a fee basis (ls
or hourly). Contractor would then negotiate a lump sum cost of the
work. This results in the same adversarial relationship as traditional
design- bid - build.
9. Description of a guaranteed maximum price approach:
the contractor is first selected on a qualifications basis with his fee
(usually expressed as a percent of construction).
The contractor assists with determining the cost of the work, upon
which his fee is added. If the actual cost of the work exceed the
agreed maximum, there is no increase in the fee. If the actual cost
of the work is less than the maximum, the owner keeps the
savings, but the fee remains with the contractor.
Generally, the retained savings would then be used to purchase
additional work, to which would be added the agreed fee. For
example, if the fee is 10 %, and the cost of the work is $1OM, the fee
would be $1M. If the work winds up costing only $8M, the
contractor gets to keep the full$1M fee, while the owner keeps the
$2M savings. If the owner elects to expand the scope of work by
an additional $2M (in other words, spend the savings) the
contractor could be paid an additional 10% on the additional
work.
This process is often a win -win. The contractor is encouraged to
be efficient, while the owner is in the position to benefit from the
savings accrued as a result of the process.
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•
10. Award of an RFP for GC /CM process selection is usually based on 50%
qualifications and 50% price (the price being the fee and his lump sum or
hourly rate for pre- design services.
11. Responsibilities for managing the various tasks during a GC /CM project:
Processing of Pay Requests: Usually by Owner project manager
with design consultant. Evaluation is done on a percent complete
basis, much like traditional contracts. There is review of the
contractors monthly job cost accounting reports on a random basis
to ensure that quality and contractual standards are being met.
Schedule: the schedule is managed by the contractor with
Owner /design team oversight.
Budget: budget is managed by the contractor with Owner /design
team oversight.
Owner: Owner must clearly define expectations and designate
responsible persons
Contractor suppliers and subcontractors: in some contracts, the
GC likes to select major suppliers and subs during pre design prior
to establishing the GMP. Others will establish a GMP, then select
subs. Method is often agreed to during pre - design.
12. We discussed how ASD managed a recent project of similar size to KHS
was managed:
Amount of staff required on a project:
project manager (1 person)
construction inspectors (2 persons)
architectural CA staff (presumably on design team) (2 persons)
miscellaneous admin staff (some number)
Contractor was selected at Schematics.
The GMP was agreed to at 65%
Contractor assisted with life cycle costs and scheduling. They were
able to prove that demolition /replacement was cheaper than
renovation and phasing this project.
Fees for the design team were about the same as a traditional DBB
process, but the types of services and processes are a little different.
It was suggested that John Wier at McCool Carson Green be consulted
if there are any questions on fees.
13. The following are project elements that would indicate an alternative
deliver process be used:
Larger project
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PAGE 3
Complicated design issues
Projects where benefits of additional work elements can be
identified
Complicated scheduling and /or phasing
14. Benefits of alt project delivery include:
Reduce risk for owner and contractor
Reliable cost controls
Opportunity to select the best contractor for the given project,
from the Owner's point of view, not just the easiest way to select a
contractor.
15. To summarize, the contractor selection process is a two step process:
Step 1: Select 2 or 3 contractors proven to be successful
Step 2: Evaluate specific approach and value for each of the two or
three pre - selected contractors, and rank them on best value to the
Borough.
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