Design-Build Procurement Approaches
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This document discusses different approaches to design-build procurement, including qualifications-based selection, price-based selection, and best value selection. It outlines the advantages and disadvantages of each approach. Qualifications-based selection focuses on contractor qualifications, price-based selection focuses on price alone, and best value selection evaluates both qualifications and price. The document also discusses progressive design-build, where the design-builder is selected based on qualifications and works collaboratively with the owner to advance the design.
Design-Build Procurement Approaches
- 1. DESIGN-BUILD PROCUREMENT APPROACHES John D. Doller, P.E. Carollo Engineers, Inc.
- 2. Agenda • Procurement Goals • Evaluation Options • Types of Procurement • Considerations for Selection of Procurement Type
- 3. Procurement Goals • Attract the best competition from the qualified DB teams • Obtain an acceptable market price for DB services • Obtain acceptable contract terms to meet Owner’s project objectives with acceptable risk allocation
- 5. Evaluation Options Qualifications Cost Qualifications Based Selection Price Based Selection Best Value Selection
- 6. Design-Build Procurement Approaches Design-Builder is selected based on Qualifications alone. RFQ A price for the project is developed at a specified level of design and could be GMP or Lump Sum Qualifications Based Selection
- 7. Design-Build Procurement Approaches Design-Builder is selected based on price alone (i.e. lowest responsive price) RFP (requires some level of design) Qualifications Based Selection Price Based Selection
- 8. Design-Build Procurement Approaches Design-Builder is selected based on a combination of qualifications and price RFPor RFQ&RFP Qualifications Based Selection Price Based Selection Best Value Selection
- 9. Qualifications Based Selection ADVANTAGES • Reduces procurement time and cost • Most qualified Design-Builder is selected • High degree of Owner control • Owner defines/negotiates scope, quality, price and schedule Project Definition Predesign Final Design Construction Startup
- 10. Qualifications Based Selection DISADVANTAGES • May not be legally permissible • Is counter to “public low bid” psyche • Could be “tough sell” • May need to engage a procurement advisor Project Definition Predesign Final Design Construction Startup
- 11. Qualifications Based Selection QUALITATIVE CONSIDERATIONS * Qualifications * Experience * Technical Approach * Management Approach * Risk Allocation * Key Personnel * Team Organization * Schedule Control * QA/QC Approach * Insurance / Bonding Project Definition Predesign Final Design Construction Startup
- 12. Price Based Selection ADVANTAGES • Price certainty at time of proposal submission • Detailed technical information provided Project Definition Predesign Final Design Construction Startup
- 13. Price Based Selection DISADVANTAGES • Large time investment in procurement • Greater effort to review proposals • Owner input only during procurement development • Life-cycle cost considerations limited Project Definition Predesign Final Design Construction Startup
- 14. Price Based Selection Predesign Final Design Performance Based Prescriptive Based INNOVATION CONTROL
- 15. Performance vs. Prescriptive Predesign Final Design Performance Based Prescriptive Based INNOVATION CONTROL Performance Based Prescriptive Based • Maximum potential for cost savings through innovation • Maximum transfer of design-related performance risk • Relatively low costs to prepare RFP / Proposal • Substantial control over project design and O&M costs • Proposal selection can emphasize project design build costs • High level of project definition at time contract is signed ADVANTAGES
- 16. Performance vs. Prescriptive Predesign Final Design Performance Based Prescriptive Based INNOVATION CONTROL Performance Based Prescriptive Based • May result in higher O&M costs • Proposal evaluation and selection is more complex • Potential for decreased participation due to higher preparation costs • Limited Owner input into design after proposal is accepted • Procurement duration is longer • RFP preparation is more costly due to high level of design • Design risk not clearly assumed by the Design- Builder DISADVANTAGES
- 17. Best Value Selection CostQualifications ADVANTAGES • Price certainty at time of proposal submission (maybe) • Detailed technical/qualifications information provided • Depending upon cost component – collaboration can still exist Best Value Selection
- 18. Best Value Selection CostQualifications DISADVANTAGES • Large time investment in procurement • Greater effort to review proposals • Life-cycle cost considerations limited Best Value Selection
- 19. Weighting Costs and Quals Progressive D-B
- 20. Progressive Design-Build In a progressive design-build procurement, the design-builder is selected primarily based on qualifications before substantial design is completed. Together, the owner and the design-build team advance the design, incorporating the details desired by the owner and providing the owner with cost input regarding options the owner is considering. This open-book approach enables the owner to make well- informed decisions on the overall quality of the project. (Chapter 3, page 25)
- 21. Progressive Design-Build Design/Builder Design Development and ConstructionDesign Definition Owner PM/OA 100% Guaranteed maximum price established at the right time: Risk and contingency reduced, schedule needs met Construction estimating can start very early in design, allowing comparison of specific technical solutions First fully detailed estimate can be used to establish a scope baseline. Estimating process is “open book” “Progressive” estimates keep owners informed and support- informed scope adjustment decisions Owners can use third-parties to verify cost . . . . . . and go to the hard-bid market if needed (the “off-ramp”)
- 22. Progressive Design-Build Design/Builder Design Development and ConstructionDesign Definition Owner PM/OA 100% • Investment in projects, not procurements • Offers owners maximum flexibility/opportunity to collaborate on design/permitting • Minimizes overall schedule • Owners have an “off-ramp” in case of permitting issues or if GMP can’t be negotiated • Very successful evolving model
- 23. Considerations for Selecting Procurement Approach • Project Goals and Objectives • Legal Feasibility • Level of Design Definition