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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 ARCHITECTURE • INTERIOR DESIGN • CONSTRUCTION MANAGEMENT 522 WEST 10 l STREET JUNEAU, ALASKA 99801 (907) 586 -1070 FAX ( 907) 586-3959 www.jensenyorbalott.com PAGE • 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 52 WEST 10'r" STREET JUNEAU, ALASKA 99801 (907) 586 -1070 FAX (907) 586 -3959 www_jensenyorbalou.carn 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, ARCHITECTURE • INTERIOR DESIGN • CONSTRUCTION MANAGEMENT 522 WEST 10T STREET JUNEAU, ALASKA 99801 (907) 586 -1070 FAX ( 907) 586 -3959 www.iensenyorbalott.com 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 ARCHITECTURE • INTERIOR DESIGN •CONSTRUCTION MANAGEMENT 5221 VEST 10 STREET JUNEAU, ALASKA 99801 (907) 586 -1070 FAX (907) 586-3959 www.jenscnvorbalott.com 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: ARCHITECTURE • INTERIOR DESIGN •CONSTRUCTION MANAGEMENT 522 WEST 10 STREET JUNEAU, Al.ASKA 99801 (907) 586 -1070 FAX (907) 586 -3959 wwwjcnscnyorbaluu.com 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 ARCHITECTURE • INTERIOR DESIGN •CONSTRU CrION MANAGEMENT 522 WEST 10'r' STREET JUNEAU, ALASKA 99801 (907) 536 -1070 FAX (907) 586 -3959 www_jcnsenyorbalon.com 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 ARCHITECTURE • INTERIOR DESIGN •CONSTRUCTION MANAGEMENT 522 WEST 10 STREET JUNEAU, ALASKA 99801 (907) 5861 070 FAX (907) 586 -3959 www_jensenyorbalott.com 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: ARCHITECTURE • INTERIOR DESIGN • CONSTRUCTION MANAGEMENT 522 WEST 10m STREET JUNEAU, ALASKA 99801 (907) 586 - 1070 FAX (907) 586 -3959 www.jensenyorbalott.com 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. ARCHITECTURE • INTERIOR DESIGN •CONSTRUCFION MANAGEMENT 5 NEST 10 "' SUREST JUNEAU, ALASKA 99801 (907) 586 -1070 FAX (907) 586 -3959 rrww_jensenyorbalou.com PAGE 2 • 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 ARCHITECTURE • INTERIOR DESIGN •CONSTRUCTION MANAGEMENT 522 WEST 10 " STREET JUNEAU, ALASKA 99801 (907) 586 -1070 FAX (907) 586 -3959 w nv.jen,senvorbnlou.com 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. G:A_ProjectsV10077VCorr \project delivery \teleconf mikcprice 110511.docx ARCHITECTURE • INTERIOR DESIGN •CONSTRUCTION MANAGEMENT 522 NEST 10 STREET JUNEAU, ALASKA 99801 (907) 586 -1070 FAX (907) 586 -3959 x ww.jensenporb:dou.eom I'AG E 4 KODIAK ISLAND BOROUGH get-GAL /WORK SESSION raCSk Work Session of:',.: Lli'ht' ( I t c\20i I Please PRINT your name Please PRINT your name € X . Irk\ c thlh City IN) le/ S'; tep j n , 4 \ g u,���,M 00 KA c C�C { l. 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