Alternative Project Delivery Mechanisms

1
Alternative Project Delivery Mechanisms

• The J. K. Spruce Experience

2
Overview

• J.K. Spruce 2 planned as early as 1986.
• Authorized to proceed without permit in 2004.
• Chose Design-build methodology.
• Issued Two Phase RFP.
• Two Offerors Responded/Awarded July 2005.
• Issued LNTPs in August 2005 and full NTP in
  April 2006.
• Provisional acceptance expected no later than
  March 2010.

3
Traditional Process

• Chapter 252 of Local Gov. Code governed
  procurement activities.
• Design-Bid-Build was only available method.
• Bids advertised, opened and awarded publicly.
• Award based on Lowest responsible bidder.

4
New Processes

• Chapter 271, Subchapter H added in 2001.
• Authorized best value determination.
• Five new methods for project delivery
• Competitive sealed proposals
• Design-build
• Construction manager-agency
• Construction manager-at-risk
• Job-order contracting

5
Design-Build process

• Single entity provides design and construction.
• Two phase procurement process
• Phase One RFQ based on qualifications,
  references, past experience.
• Phase Two RFP based on schedule, implementation
  plan, technical approach, cost.
• Award to best value offeror.

6
Design-Build Advantages

• Fast-track schedule and construction
• Single point of contact.
• Cost savings due to value engineering.
• Less owner administrative burden during
  construction phase.
• Potential for minimization of change orders.

7
Initiation of CPS Energy Process

• Board Resolution selecting best value process.
• Engage Owner-Engineer to develop Design Criteria
  Package.
• Functional specification and conceptual layout.
• Desired equipment margins.
• Quality and performance guarantees.
• Transmission access.
• Geotechnical and environmental information.
• Engaged the services of a surety consultant
• Joint development of RFPP/RFP and evaluation
  matrices.
• Pre pre-bid meeting held with interested parties.

8
Phase One-RFPP

• RFPP advertised and sent to attendees.
• Pre-bid meeting held with Site visit.
• Evaluation criteria
• Ability to bond penal value of 250 million.
• Financial status.
• Reputation in industry.
• Past experience.
• Resumes of proposed project team.
• References.
• Two offerors qualified to proceed to Phase Two.

9
Phase Two

• Offerors given the RFP.
• Agreement to reimburse losing entity of up to 1
  million for preparation costs.
• Evaluation criteria
• costs
• Implementation plan
• Project schedule
• Safety record
• Workforce and training plans
• Costing methodology
• Initial Design drawing and schematics

10
(cont.) Phase Two

• Interviews conducted to clarify exceptions and
  technical response.
• Offerors asked to resubmit responses based on
  discussion and to provide pricing to remove
  exceptions.
• Signed agreement fixing responses for
  evaluation.
• Evaluation and recommendation of selected
  offeror.
• Negotiations with selected offeror and award
  based on reaching satisfactory contract.

11
Post Award

• Limited Notices to Proceed
• LNTP 1- Early planning and engineering for
  procurement of long lead time items.
• LNTP 2- Vendor engineering.
• LNTP 3- Preparatory site construction work
• LNTP 4- Material and Equipment purchase release
• LNTP 5- Controls upgrade
• Full Notice to Proceed upon issuance of permit.

12
Keys to Success

• Clear and comprehensive Design Criteria package.
• Effective integration of proposed Design-Build
  Team.
• Full and consistent communication.
• Owner involvement.

13
Commercial Considerations

• Testing and commissioning done by third party.
• Contract price.
• Payment and performance bonds.
• Construction risks.
• Bidding stipend.
• Bonus for early completion.
• Payment of prevailing wage.
• Use of a Local Government Corp.