Innovative Contracting

1. Innovative Contracting Construction Management Association of America Seminar May 17, 2013 California Department of Transportation

2. Traditional Project Delivery • Design-Bid-Build (DBB) • Specified by Public Contract Code • Design must be complete • Awarded to the lowest responsible bidder

3. Why Use Innovative Methods? • Faster Delivery • Cost Certainty • Constructability • Better Partnering • Risk Transfer • Innovation

4. Innovative Contracting Effort Hired Trauner Consulting Services, Inc. to: • Identify methods used by others • Identify the pros and cons of each method • Assist in developing policy, procedures, and processes for selected methods • Assist in developing training

5. Innovative Contracting Report Identified 27 methods divided into the following categories: • Project Delivery Systems • Procurement Practices • Contract Management Methods

6. Caltrans Experience Design-Bid-Build Design-Sequencing Additional Methods Indef. Delivery/ Indef.Quantity Agency-CM CM at-Risk Design-Build Early Contractor Involvement Project Alliancing Contract Maintenance Project Delivery Systems

7. Caltrans Experience Cost-Plus-Time (A+B) Bidding Low Bid Lump Sum Bidding Additional Methods Multi-Parameter (A+B+C) Bidding Alternate Design Alternate Bid Additive Alternates Best-Value Reverse Auction Bid Averaging Procurement Practices

8. Caltrans Experience Incentive/Disincentive Lane Rental Flexible Notice to Proceed Warranties Additional Methods Liquidated Savings Active Management Payment Mechanism No Excuse Incentives Shared-Risk Contingency Fund Contract Management Methods

9. Design-Build

10. Design-Build A delivery method where a contract for both the design and construction of a project is awarded to a single entity.

11. Design-Build

12. Legislation – Senate Bill 4 • Allows 15 design-build projects • 10 Caltrans • 5 Local • California Transportation Commission must authorize • Prequalification versus shortlisting • Allows “Low Bid” or “Best Value” awards • Sunsets January 1, 2014

13. Authorized Projects Awarded Projects • LA 10/110 – Express Lanes $ 72 million • Mad 99 – Rehabilitate Roadway $ 23 million • SM 101 – Install Ramp Metering System $ 11 million • Fre 180 – Construct Braided Ramps $ 41 million • LA 10/605 – Construct EB 10/SB 605 Connector $ 46 million • SD 805 – I-805 North HOV/BRT $ 72 million • LA 710 – Gerald Desmond Bridge $650 million • SBd 15/215 – Devore Interchange $208 million • Riv 91 – HOV Lanes $633 million Projects Currently in Procurement • Cajon Pass $140 million • North Region Bridge Deck Rehabilitation $ 58 million

14. Why Use Design-Build? • Faster Delivery • Cost Certainty • Constructability • Risk Transfer • Innovation

15. Alternative Technical Concepts Alternative Technical Concepts (ATC) are proposed changes to the Department’s supplied basic configurations, design criteria, or construction criteria which provide a solution that is equal to or better to the requirements in the Request for Proposals.

16. Alternative Technical Concepts (ATCs) ATCs submitted – 206 Value of ATCs submitted – $967 million ATCs approved – 109 Value of ATCs approved – $502 million ATCs incorporated – 29 Value of ATCs incorporated – $142 million

17. Devore Interchange Project • Deliver project 18 months earlier • Secured $108 M SHOPP funding for the project • Improved design, I-15 NB continuity • Reduced right of way take (10 parcels) • Reduced environmental impacts • $40 M savings

18. Construction Manager-General Contractor

19. Construction Manager / General Contractor (CM/GC) A delivery method that allows an owner to engage a construction manager to provide input during the design process. At an agreed upon point, the owner and construction manager negotiate a price for construction of the project and the construction manager becomes the general contractor.

20. CM/GC Process

21. Preconstruction Services • Constructability Reviews • Verify Quantities • Estimate Alternatives • Value Analysis • Risk Analysis • Construction Phasing • Project Scheduling

22. Authority • Assembly Bill 2498 (Gordon) • Signed September 2012 • Added Section 6700 to Public Contract Code • Authorizes up to 6 projects by Caltrans • Must be administered by Caltrans • 5 projects greater than $10 million • Effective January 1, 2013 • No sunset date

23. Why Use CM/GC? • Faster Delivery • Cost Certainty • Constructability • Risk Mitigation • Innovation

24. Next Steps • Develop processes and contract templates • Industry outreach • Project selection • Begin procurements

25. Useful Links Innovative Procurement Practices Report: http://www.dot.ca.gov/hq/oppd/contracting/InnovativeProcurementPractices.pdf Alternative Procurement Guide: http://www.dot.ca.gov/hq/oppd/contracting/AlternativeProcurementGuide.pdf

26. Useful Links Design-Build Demonstration website: http://www.dot.ca.gov/hq/oppd/designbuild/db.htm FHWA’s Design-Build Effectiveness Study http://www.fhwa.dot.gov/reports/designbuild/designbuild.pdf

27. Useful Links CMGC Pilot Program website: http://www.dot.ca.gov/hq/oppd/cmgc/ NCHRP Synthesis 402: Construction Manager-at-Risk Project Delivery for Highway Programs http://onlinepubs.trb.org/onlinepubs/nchrp/nchrp_syn_402.pdf

28. For More Information Contact: Raymond S. Tritt Chief, Office of Special Projects California Department of Transportation (916) 653-3348 rtritt@dot.ca.gov DBProgram@dot.ca.gov CMGC@dot.ca.gov