Innovative Contracting UDOT Director of Construction and Materials Kris Peterson.

Innovative ContractingUDOTDirector of Construction and MaterialsKris Peterson

Innovative Contracting Works to Improve the Process

Reduce impact to publicReduce overall project time Limits Schedule Growth

Reduce overall project cost Limits Cost Growth

Types of Innovative Contracting

Contract Manager / General Contractor (CMGC or CM@Risk) Design-BuildA + B BiddingLane RentalWarrantiesIncentivesPerformance-based

Design Phase Construct Phase

Design Bid

Build

Design Build

CMGC/DB

CMGC

SelectAdvertise

NTP

SelectAdvertise

NTP

SelectAdvertise

SelectAdvertise Open Bid

NegotiateNTP

Open BidNegotiate

NTP

Open BidNegotiate

NTP

Open BidNegotiate

NTP

B1 BnB2

Timeline Comparison

CMGC Roles

UDOT

Plan

Build

Design Consult

Design

Contractor

UDOT

Bid Build

Contractor

Negotiate

Why Innovative Contracting

CMGC Benefits

UDOT Controls Design UDOT Selects Innovation

Lessons Learned

Other CMGC Benefits / Risks

BenefitsReduces design time and design errorsImproves constructabilityIdentifies and reduces riskEarly procurementLower cost

RisksSole source contract Bid price needs

to be 10% of EE or below

Negotiation skills

Why Innovative Contracting

Reduce Risk to Reduce Cost &

Increase Profit

DBB DB CMGC

Contractor Risk

Owner Risk

Ris

k

Selection Strategy

Select complex projects That benefit from contractor input With third-party risk That need innovation Need early procurement

Select projects with a budget emphasisTake time for design

Why Innovative Contracting

CMGC Requires Approval

Experimental Process - SEP 14 12 Federal Projects per year 12 State Projects per year

Justification requiredProject Development approvesFHWA must also approve federal projects

Contracting ProcessDevelop RPF Selection Criteria Price components

AdvertiseSelection team Complex participants Region participants AGC and ACEC representatives

Select & Award

Processing Time

No

Yes

Yes No

Acquire Designer 9-10 weeks

Plan Project Phases 3-5 weeks

Design Phase

Independent ?

Region recommends Multiple phases to Project Development

Multiple Phases

Designers & Contractor Design Phases

Select Contractor 14-16 weeks

Designers & Contractor Design Project

Price Benefits

Brings cost accountability to the tableBrings cost competition to the tableBrings cost innovation to the tableProvides validation of good price for public trust

Price in CMGC RFP

Price Continue to use the average target

Most realist cost

Approach to Price Emphasize during pre-proposal Change the format

Where are we going?

Yes

YesNo

No

Bids & EstimatesSubmitted to Electronic Vault

Contractor Createsprice proposal

Designer Creates Engineer Estimate

Stanley Red Flag Analysis

Third PartyIndependent CostEstimate

Bid Below CAA

++ Funds/ Rescope

Go Back To Design

Go Traditional Bid Build

Utah CMGC Projects (State)

Where are we going?

Utah CMGC Projects (Federal)

Where are we going?

BuildPhase 1

BuildPhase 2

Design Build

Design

UDOT

Plan

Contractor

BuildPhase n

Design Consultant

Design-build

Benefits Faster Design/Construction Smaller cost growth Smaller schedule growth Innovation (Contractor controlled)

Risks: Design-build is built for speed Contractor owns the design

Design Build Advertising Process

Letter of Intent (Interest) LOIRFQRFP

Low-BidBest-Value

Checklists

Located on the 2008 Standards / Checklists website

http://www.udot.utah.gov/Inside UDOT/Project Development/Standards and Specifications /2008 Standards/2008 Project Checklists

Selection CommitteeSO

Selection Official(Projects above $100M)

PEBProposal Evaluation

Board

CMGContracts Management

Group

TEBTechnical Evaluation

Board

PETPrice Evaluation Team

TATechnical Advisors

PEB Consists of:Program Manager (Chair)

Project ManagerRegion Functional Manager

Central ConstructionInnovative Contracting Engineer

TEB Consists of:Project Manager (Chair)

AGC Representative (if available)ACEC Representative (if available)

Reduce Time on Project

A+B Bidding Contractors bid

the time to complete the project and a dollar amount for work items

Award to lowest combinations of time and cost

Lane-Rental Minimize the time

lanes are closed Contractors are

charged a fee for closing lanes and shoulders

Focus on time the public is affected

A + B Bidding

Benefits: Improved coordination between prime and sub-contractors Reduced construction time minimizes impacts to users Contractors are required to put together a well conceived

schedule

Drawbacks : Contract changes are magnified; too many changes nullify

the advantages of A+B Acceleration techniques may require more resources for

contract administration More hours and over-time budget required from Region

staff Negotiations for additional work are more intense since

time is a bigger issue

A+B Candidates

Good: Interstate Projects Mill and Overlays Projects with Detours Bridge Painting Intersection upgrades New Construction/Reconstruction

Bad: Third-party delays Rehabilitations

Lane Rental

Benefits:– Better coordination of prime and sub-contractors– Minimized impact to traveling public– Better public perception due to fewer un-utilized

lane closures

Drawbacks:– Extra effort by staff to monitor lane rental– Negotiating lane rental adjustments can be

difficult with contract changes– Potential added costs to the project

Lane Rental Candidates

Good: Mill and Overlay (2-lane roads with

flagging ops. or intersection impacts) Safety projects

(guardrail/signing/striping/bridge painting)

Bad: New construction Long-term projects

Warranties

Guarantee all or portions of a construction project Free of defects in material Workmanship Time Period

Correct deficiencies during warranty period

Warranty Pros and Cons

Benefits Quality and

durability guaranteed

Longer acceptance time

Less inspection needed

Drawbacks Owner must

ensure warranty Warranty may not

be collectable Staffing to monitor

warranty

Incentives - Disincentives

Paid for early completionsPenalized for late completions

I & D Pros and Cons

Benefits Reduced

construction time May lower

contract admin costs

PI benefits Control of project

acceleration

Drawbacks May require

additional funding Contract changes

may lead to disputes

Pay-for-Performance

Pay is dependent upon final outcome Measured against performance criteriaSet by contractPay withheld for poor performanceCorrective action required

PFP Pros and Cons

Benefits Eliminates blame Shifts risk to

contractor Higher quality

Drawbacks Time to measure

performance Long project

close-out Monitoring is time-

consuming Contractor may

have to finance a portion

Innovative Web Site

www.dot.state.mn.us/const/tools/docments/Guidelines.pdfDec 2005