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HJR #28 - Studying "Best Value" Construction Contracting

HJR #28 - Studying "Best Value" Construction Contracting. Architecture & Engineering Division Department of Administration State of Montana. A Good Start? Collaboration and Simplicity are a great start!. Today’s Agenda. Define Goals of the Study Define “Best Value” Methods of Contracting

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HJR #28 - Studying "Best Value" Construction Contracting

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  1. HJR #28 - Studying "Best Value" Construction Contracting Architecture & Engineering Division Department of Administration State of Montana HJR #28 - Studying "Best Value" Construction Contracting

  2. A Good Start?CollaborationandSimplicity are agreat start! HJR #28 - Studying "Best Value" Construction Contracting

  3. Today’s Agenda • Define Goals of the Study • Define “Best Value” • Methods of Contracting • Areas of Study • Assign Tasks & Responsibilities • Set Meetings & Milestones Schedule • Presentation by Dr. Dean Kashiwagi HJR #28 - Studying "Best Value" Construction Contracting

  4. Study Goals • Define “Best Value” Contracting • Establish criteria for objective selection process • Determine qualifications for selection panels to award contracts • Establish a process for most cost-effective projects possible • Present data and conclusions to the 59th Legislature w/ recommendations HJR #28 - Studying "Best Value" Construction Contracting

  5. Current Method of Procurement (1) • State: Design / Bid / Build • A/E selected on qualification basis • Construction to low responsive, responsible bidder FOR MORE INFO... Title 18 – Chapters 1, 2, & 8 MCA HJR #28 - Studying "Best Value" Construction Contracting

  6. Current Method of Procurement (2) • Local Govts: Design / Bid / Build • A/E selected on qualification basis • Construction to low responsive, responsible bidder • Are Design/Build and CM @ Risk being used? FOR MORE INFO... 7-1-4127; 7-5-4302; Title 18 – Chapters 1, 2, & 8; 20-9-204 MCA HJR #28 - Studying "Best Value" Construction Contracting

  7. Current Method of Procurement (3) • MT Supreme Court Decisions: • Statutes are for the public interest not bidders • Lowest monetary bidder does not mean lowest responsible bidder • Responsible bidder must be “qualified” • Public entity discretion is somewhat broad • Unsuccessful bidder lacks standing to challenge award absent bad faith FOR MORE INFO... 2001 MT 124 Debcon v. City of Glasgow; 218 MT (1985) Baker v. State; 41 MT (1910) O’Brien v. Drinkenberg; 111 MT (1941) Koich v. Cvar; 163 MT (1973) Sletten v. Great Falls; HJR #28 - Studying "Best Value" Construction Contracting

  8. Various Delivery Methods • Design / Bid / Build • Design / Build • CM @ Risk • (Pre-Qualification & Performance-Based variations of the above) FOR MORE INFO... http://www.ganet.org/gsfic/const_manual.html HJR #28 - Studying "Best Value" Construction Contracting

  9. Delivery Method Definitions: • Design / Bid / Build • Design / Build • CM @ Risk • (Pre-Qualification & Performance-Based variations of the above) FOR MORE INFO... http://www.ganet.org/gsfic/const_manual.html HJR #28 - Studying "Best Value" Construction Contracting

  10. Slide courtesy of Mike Kenig, Holder Construction “Introduction to Project Delivery Methods” CONTRACTS: Two Designer & Contractor (2 separate contracts) One Design/Builder (1 combined contract) SELECTION TYPES: Low Bid Total construction cost is sole criteria for final selection Design-Build Low Bid Design-Bid-Build ???? CM At-Risk Or D/B/B Value-Based Total Construction Costs and other criteria are weighted factors in the final selection Design-Build Value Based Qualifications- Based Selection Total Construction Costs are not a factor in the final selection criteria Design-Build QBS CM at-Risk HJR #28 - Studying "Best Value" Construction Contracting

  11. Design & Construction Contracts Combined? Cost of Work a Selection Criteria? Total Construction Cost Sole Selection Criteria? No Separate Yes Yes Yes Combined Yes Yes Yes Combined Yes No No Separate Yes No Yes Combined No No No Separate No No Names Used Here Today CM At-Risk Qualifications Based Design/Build Low Bid Design/Build Value Based CM At-Risk Value Based Design-Bid- Build Design/Build Qualifications Based Project Delivery Method Translator Defining Characteristics of Each Method: Slide courtesy of Mike Kenig, Holder Construction “Introduction to Project Delivery Methods” HJR #28 - Studying "Best Value" Construction Contracting

  12. What is “Best Value?” (1 of 3) • For Public Owners: • Scope, Time, Budget vary by project to determine best value • Best process for construction now & long term • Can be price, shortest delivery, quality of construction, qualified contractor, quality sub-contractors • Least likely to end in litigation HJR #28 - Studying "Best Value" Construction Contracting

  13. What is “Best Value?” (2 of 3) • For A/E Professionals: • Team approach to project (difficult in low bid process) • Contractor on-board early in design adds benefit to the design • Reduced liability through other than low bid • Reduce administrative time through qualified contractor and teamwork approach • Maintain design integrity/intent HJR #28 - Studying "Best Value" Construction Contracting

  14. What is “Best Value?” (3 of 3) • For Contractors & Sub-Contractors: • Early involvement in design has benefits • Increased teamwork, avoid adversarial relationships • Time is a large factor (less the better) • Winning award of the project HJR #28 - Studying "Best Value" Construction Contracting

  15. What is a “fair, equitable, and objective selection process?” (1 of 3) • For Public Owners: • Clear scope and criteria are vital • Process open to everyone • Lack of political pressure • Detailed criteria for selection and/or scoring • Evaluations/scoring are public meetings • Pre-screening process for minimum criteria to submit an RFP (i.e. RFQ, 2-step process) • Drawing a line of “responsible” for those below it aren’t considered HJR #28 - Studying "Best Value" Construction Contracting

  16. What is a “fair, equitable, and objective selection process?” (2 of 3) • For A/E Professionals: • Selected prior to contractor is preferable (negates some D/B relationships) • Help the client select the best contractor • Political decisions unfair to qualified firms HJR #28 - Studying "Best Value" Construction Contracting

  17. What is a “fair, equitable, and objective selection process?” (3 of 3) • For Contractors & Sub-Contractors: • No past violations of statute to be considered • Process open to public • Factors for selection clear and fact-based • Define, Communicate, Score the criteria • Same criteria for everyone • Proprietary/confidential info protection issue (e.g. trade secret – costing factors) HJR #28 - Studying "Best Value" Construction Contracting

  18. Who are “qualified members of selection panels?” (1 of 3) • For Public Owners: • Knowledgeable of design and construction • Try to be politically-disconnected but aware of its existence • Agency/user representatives • Adequate number of participants to validate scoring • Adequate time and willingness to participate • Final selection separated from panel similar to A/E appointment? HJR #28 - Studying "Best Value" Construction Contracting

  19. Who are “qualified members of selection panels?” (2 of 3) • For A/E Professionals: • Leave it to the local, RFP development group to evaluate, score, and select HJR #28 - Studying "Best Value" Construction Contracting

  20. Who are “qualified members of selection panels?” (3 of 3) • For Contractors & Sub-Contractors : • Local, personal connections to respondents a concern • But, teamwork is critical so involvement of project people in the selection is important • Knowledgeable members able to make informed decisions/recommendations HJR #28 - Studying "Best Value" Construction Contracting

  21. What is “the most cost-effective project possible?” • For Public Owners: • See “best value” slide • For A/E Professionals • See “best value” slide • For Contractors & Sub-Contractors • See “best value” slide HJR #28 - Studying "Best Value" Construction Contracting

  22. Areas of Study • Use other state statutes/guidelines • Private publications • Construction industry associations • Federal criteria (FAR, COE) • Look at HB #473, 58th Session HJR #28 - Studying "Best Value" Construction Contracting

  23. Tasks & Responsibilities • All info on A&E website • Do things electronically • Meeting milestones will be critical HJR #28 - Studying "Best Value" Construction Contracting

  24. Meetings & Milestone Scheduling • Refer to schedule handout • Deliver in January 2005 • (start of 59th Legislative Session) HJR #28 - Studying "Best Value" Construction Contracting

  25. Conclusion • Thanks for your participation! • Break until 3:00 p.m. • Presentation by Dr. Dean Kashiwagi HJR #28 - Studying "Best Value" Construction Contracting

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