Alternative Project Delivery Texas Council of Engineering Companies

1. Alternative Project Delivery Texas Council of Engineering Companies Mike Ellicott Vice Chancellor Facilities Planning & Construction Texas Tech University System November 28, 2007 Preserving the Past Building the Future

2. 350 Miles Texas Tech University System TTU 28,000 Students TTUHSC 2,000 Students Angelo State 6,400 Students Amarillo Lubbock Dallas Abilene Midland El Paso San Angelo Odessa Marble Falls Junction Fredericksburg

3. FP&C Mission FP&C supports Texas Tech’s academic missions by creating high-quality, innovative campuses through professional planning, design, and construction management. Preserving the Past While Building the Future We Make It Happen

4. Responsibilities • Master Planning (All Campuses) • Life Cycle Project Management • Project Development • Design Management • BOR & THECB Project Approval • Financial & Budget Management • Construction Contracting • Construction Administration • Construction Inspection/Code Compliance • Contract Close Out • Landscape Enhancement Program • Public Art Program

5. Responsibilities (Cont.) • Interior Design and Management • Space Planning • Interior Design • Interiors Construction Administration • Furniture Procurement • Client Relocation • BOR Facilities Committee Liaison • THECB Reporting and Coordination • Storm Water Pollution Prevention (SW3P) • System HUB Coordinator • Local Community Coordination • Campus Agency Liaison

6. Project Management Workload Under Construction (13) $ 175,955,388 In Design (14) $ 167,810,000 Future Projects (11) $ 238,000,000 Total Active Program (41) $ 581,765,388 Completed Projects (61) $ 515,929,051 TOTAL (91) $1,097,694,439

7. FP&C Operating Guidelines Build Something • Obey the Rules • Ensure Fair and Open Competition • Employ Best Value Contracting • Form Partnerships • Commission Major Projects • Promote HUB Participation • Use Standard Templates • RFQ, RFP, Contracts,Amendments, etc.

8. Capital Project Selection • Component Institutions Manage the Selection and Prioritization of Capital Projects • THECB MP1 Process • TRB Project Process • FP&C Manages All Capital Projects • New Construction Projects $1.0 million + • Repair and Renovation Projects $2.0 million + • Others as Directed

9. Construction Related Contracts • Professional Services • Design Professionals • Owner’s Representatives • Testing and Surveying • Commissioning and TAB • Construction Services • Construction • Construction Management • Commodities • Public Art • Furniture (Through TTU, TTUHSC, and ASU)

10. Construction Delivery Options • Design-Bid-Build (Traditional Method) • Low Bid • Competitive Sealed Proposal • Construction Manager at Risk • Design-Build • Construction Manager - Agent(Owner’s Representative) • Job Order Contract (JOC)

11. Design-Bid-Build Project Start Substantial Completion Select Designer Design Project Select Contractor Construct Project Time

12. Design-Bid-Build • Traditional Method • Longest Project Delivery Method • No Contractor Involvement in Design • Lacks Flexibility; Less Responsive to Change & Change is Expensive • Adversarial Relationship Based on Price, Not Value • Easy to Evaluate

13. Construction Manager At Risk Substantial Completion Project Start Select Designer Design Project Select CM Pre-Construction Services Construct Project Time

14. Construction Manager At Risk • Competitive Best - Value Selection • Select Early in the Design Process - Faster and More Responsive to Change • Involve CM in the Design Process • Open Book Approach Based on a Guaranteed Maximum Price (GMP) • Allows for Shared Savings • Requires Additional Review of Proposals and Pay Applications

15. Design-Build Project Start Substantial Completion Select Design/Build Team Design Project Pre-Construction Services Construct Project Time

16. Design-Build • Competitive Best - Value Selection • Single Contract Entity • Fast Track Projects with Well-Developed Scope and Specifications • “Commercial” Projects • Residence Halls; Office Buildings;Parking Garages • Ambiguous Projects • Research and Healthcare Facilities

17. Research Results • PSU Study of 351 ProjectsCompared to Design-Bid-Build: • CM@Risk 1.6% Lower Cost; 13.3% Faster • Design/Build 6.1% Lower Cost; 33.5% Faster • Massachusetts Study of 926 Projects • Complex Design-Bid-Build Procurement Methodologies Double the Prices and Increase Project Delivery Times by 55%

18. Owner’s Rep (CM – Agent) • Competitive Value-Based Selection • Third-Party Construction Management Expertise • Fiscally Responsible for Texas Tech’s Funds, ButCM-Agent Funds are Not at Risk • Owner’s Representative (Extension of In-House Staff)

19. Job Order Contract • Quick; Reduced Paperwork • Less Detailed Design Documents • Requires a Well-Defined Scope and Comprehensive Specifications • Requires an Up-Front Cost Estimate • Good for Small Projects • Prior Planning Prevents P- Poor Performance

20. Selection Options • Best QualifiedQualifications Alone • Best PriceLump Sum, Low Bid (Price Alone) • Best ValueCompetitive Sealed Proposals (Price, Time, Qualifications, and Other Factors) • All Competitive Selections • All Require HUB Subcontracting Plan

21. Best Qualified Selection • Based Only on the Firm’s Qualifications • Price Not Considered • Evaluate: • Experience • Unique Skills • Approach • Staff Qualifications • HUB Commitment (As a %) • Record of Claims and Litigation

22. Best Price Selection • Compete on Price Alone • Assumes: • Unambiguous, Complete Plans & Specs • Low First Cost = Low Final Cost • Only Construction Price Matters • Simple, Easy to Evaluate • Not a Value-Based Selection • Does Not Consider HUB Commitment

23. Best Value Selection • Competitive Sealed Proposals • Compete on Multiple Factors • Price • Time • Capability and Reputation of Firm • Capability and Reputation of Team • HUB Commitment • Financial Capability • Safety Record

24. FP&C Contracting Policies • Use QBS for all Professional Services • Use Best Price Contracting for All Low-Cost, Non-Time Sensitive Projects • Use Best-Value Contracting for All Others • CSP for Projects Under $5.0 M • CM At Risk for Projects Over $5.0 M or for Complex Projects Under $5.0 M • Consider CM-Agent for Complex and Out-of-Town Projects • Examine All Projects for Design-Build Opportunities

25. Typical Evaluation Criteria • HUB Subcontracting Plan – Go/No Go • Cost/Fees* • Time* • Firm Experience & Workload • Project Team Experience • Management Plan • HUB Contracting Commitment • Record of Claims and Litigation • Safety Record * Not Requested for Professional Services

26. Typical Evaluation Committee • Vice Chancellor and/or Associate Vice Chancellor • Project Manager • Interior Designer • Client Representative(s) • Physical Plant Representative • General Counsel (Non-voting) • FP&C Director of Contract Admin (Non-voting) • Others As Required(i.e., Inspector, TT Police, etc.)

27. Doing Business with FP&C • Watch the Electronic State Business Daily • Read the whole RFQ/RFP • Attend the Pre-Response Meeting • Provide All the Information Requested • Provide a HUB Subcontracting Plan • Provide a HUB Contracting Commitment • Turn in your Proposal:On the Right Day; At the Right Place, and: At the Right Time

28. Lessons Learned • Best Value Contracting Requires • Significant Up-Front Preparation • Structured Selection Process • Selection Committee Stability • Patience • Shared Savings Make Little Difference • Planning and Design Not Always Valued • Someone Will Always Say“I Can Build It Cheaper”

29. Top Texas Tech Issues • Strategic Planning • Master Planning • Construction Cost Inflation & Volatility • Cost of Energy / Sustainable Design

30. Balancing Act Fair, Consistent, Open Competitive Processes Cost Time Documents Work Law HUB Quality Relationship

31. Alternative Project Delivery Texas Council of Engineering Companies Mike Ellicott Vice Chancellor Facilities Planning & Construction Texas Tech University System November 28, 2007 Preserving the Past Building the Future