4 th ANNUAL JOINT CSU/UC PSSOA CONFERENCE March 25-26, 2003

1. 4th ANNUAL JOINT CSU/UC PSSOA CONFERENCEMarch 25-26, 2003 “Emerging Construction Methodologies in CSU – What Public Works Contract Specialists Should Know” Presented by: W. Anthony Fulton, Director Facilities Planning & Management San Diego State University

2. Emergence of New Methodologies for Capital Outlay • Historical Background • Master Builder Trade Workers • 1960’s Emergence of “fast track” • 1980’s Construction Management linked to GMP • Trend: • Less staff and capability in house “outsource” • Minimize Risk & Claims • CSU Experience: • Decentralization of Contract Management • Lump Sum Funding – Streamlined Projects

3. Methodologies Available: • Design-Bid-Build (Low Bid) • Design-Build • “Pure” Design-Build • “Bridging” Design-Build • “Performance” Design Build • Construction Manager at Risk with Guaranteed Maximum Price (CM at Risk) • CM/GC • Multiple Prime

4. Authority:The California State University has authority to procure it’s major capital outlay projects using Design-Build or CM at Risk method of Procurement under Public Code Section 10708 which states: “When, in the opinion of the trustees, the best interests of the California State University dictate, the trustees may enter into an agreement with a contractor to provide all significant portions of the design services and construction of a project under this chapter. The contractor shall design the project pursuant to the scope of services set forth in the request for proposals, build the project, and present the completed project to the trustees for their approval and acceptance. Work under this section shall be carried out by a contractor chosen by a competitive bidding process that employs selection criteria in addition to cost. Any design work performed pursuant to this section shall be prepared and signed by an architect certified pursuant to Chapter 3 (commencing with Section 5500) of Division 3 of the Business and Professions Code.”

5. TRADITIONAL DESIGN-BID-BUILD A/E CM/PM CAMPUS AGENT AGENT Vendor GENERAL CONTRACTOR SUB-CONTRACTOR BUDGET PLANNING DESIGN BID CONSTRUCTION EQUIP OCCUPY

6. ADVANTAGES: • “BEST PRICE:” POTENTIAL • DELIVERY SCHEDULE CLEARLY STATED IN CONTRACT • 100% DESIGN COMPLETED PRIOR TO BID DISADVANTAGES: • COST NOT FINAL UNTIL BID • COST OVERRUNS MAY REQUIRE REDO AND REDESIGN • BIDDERS GET “LOW” BY OMITTING WORK NOT SHOWN • CHANGE ORDER RATE HIGH – 5% PLUS • AGENTS (A/E, CM, & OTHERS) TAKE MINIMAL RESPONSIBILITY • SCHEDULE CHANGES DIFFICULT TO IMPLEMENT

7. CONSTRUCTION MANAGER @ RISK A/E CM/PM CAMPUS AGENT AGENT AGENT/VENDOR CM @ RISK SUB-CONTRACTOR BUDGET PLANNING DESIGN CONSTRUCTION EQUIP OCCUPY CM GMP

8. ADVANTAGES: • CM @ RISK SELECTED ON QUALIFICATIONS, NOT PRICE • CM @ RISK RESPONSIBLE FOR WORK SCHEDULE, MEANS & METHODS • COST “GUARANTEED.” EARLY SAVINGS POSSIBLE • CM @ RISK ACTS AS OWNER’S PARTNER FOR A FEE • CONSTRUCTION CAN START EARLY DISADVANTAGES: • COSTS MAY INCREASE DUE TO “DETAILS” NOT IN GMP • CM MAY “EXPAND” BUDGET TO CREATE FUTURE SAVINGS • SCHEDULE CHANGES DURING CONSTRUCITON DIFFICULT TO IMPLEMENT

9. DESIGN-BUILD A/E CM/PM CAMPUS AGENT AGENT AGENT/VENDOR BUILDERS A/E DESIGN - BUILDER SUB-CONTRACTOR BUDGET PLANNING DESIGN RFP CONSTRUCTION EQUIP OCCUPY

10. EARLY COST GUARANTEED • PRICE TENDS TO MATCH QUALITY • PERFORMANCE BASED SELECTIONS POSSIBLE • CONSTRUCTION STARTS VERY EARLY • D-B MAY INCLUDE COMPLETE UPFRONT SERVICES “TURNKEY” • MOST BENEFICIAL SCHEDULE • ELIMINATES ERRORS & OMISSIONS ADVANTAGES: DISADVANTAGES: • FAIR PRICE COMPETITION DIFFICULT TO VERIFY • COST IMPACT OF POINT SCALE MAY BE DIFFICULT TO EVALUATE • OVER EMPHASIS ON PRICE MAY COMPROMISE QUALITY • “BRIDGING” DOCUMENTS MAY EXTEND SCHEDULE • STAFF/USERS NEED TO MAKE “QUICK” DECISIONS • VAGUE INTERPRETATIONS OF RFP MAY OCCUR

11. WHERE DOES PROCUREMENT FIT IN EACH PROCESS?

12. BUDGETING PRE-PLANNING PHASE PROJECT SCOPE BUDGET AND SCHEDULE DEFINED PROCUREMENT PROCESSES SERVICE AGREEMENT PRE-PROJECT CONTRACTS: • FEASIBILITY • CEQA • OTHER FINANCIAL PLAN LEGAL NON-STATE ONLY PROJECT FUNDED BY STATE OR NON-STATE SOURCES CPDC – STATE T & F – NON-STATE

13. ALLOCATION ORDER ISSUED ACCOUNT ESTAB. P.O. #’s ISSUED CONTRACT # ISSUED BEGIN PROJECT METHODOLOGY SELECTED TRADITIONAL DESIGN-BID-BUILD DESIGN-BUILD CM @ RISK or CM/GC w/GMP

14. DESIGN PHASE [Traditional & Design-Build] PRESCREEN EXEC. ARCHITECT FROM CSU LIST INTERVIEW & SELECT ARCHITECT Keep file on Selection process Send Appointment letter Address Protest Select Consultant

15. CSU FEE CURVE CSU DB AGREE- MENT CSU STANDARD A/E AGREE- MENT OR PREPARE SCOPE OF WORK & A/E AGREEMENT PROCUREMENT PROCESSES AGREEMENT LEGAL

16. IF NO LOCAL LIST ADVERTISE PREPARE SCOPE OF WORK & SERVICE AGREEMENT ISSUE RFP FOR OTHER SERVICES: SELECT CONSULTANT PROCUREMENT PROCESSES AGREEMENT • CIVIL • MATERIALS TESTING • SOILS • PLAN CHECK • ADA COMPLIANCE • SEISMIC PEER REVIEW • CONSTRUCTABILITY REVIEW • BID SET REPRODUCTION LEGAL IF BLANKET CONTRACTS EXIST PURCHASE ORDER

17. DESIGN PHASE [For CM @ Risk] ADVERTISE TO ALL REVIEW PROPOSALS & SELECT BUILDER ISSUE RFP FOR CM @ RISK BUILDER ISSUE SERVICE ORDER FOR PRECONSTRUCTION SERVICES LEGAL AT SCHEMATIC DESIGN PHASE

18. BID PHASE (Traditional) ADVERTISE TO ALL AWARD CONTRACT TO LOW BIDDER PREPARE & ISSUE BID DOCUMENTS OPEN BIDS PROCUREMENT PROCESSES AGREEMENT CSU PREQUALIFIES CONTRACTORS LEGAL

19. BID PHASE (CM @ RISK) CM AWARDS SUB-CONTRACT CM AGREES TO GMP CM + ADV BID PACKAGES CM AWARDS SUB-CONTRACT CM BIDS MULTIPLE PACKAGES + CM AWARDS SUB-CONTRACT PROCUREMENT PROCESSES GMP AGREEMENT = • DIFFERENCES: • CM CONTROLS BIDS/OWNER OBSERVES • CM PARTNERS W/OWNER FOR A FEE GMP LEGAL

20. BID PHASE (Design-Build Selection Phase) LIMITED LISTED PERFORMANCE REQUIREMENT ADVERTISE TO ALL ISSUE RFP TO CONTRACTORS SELECTED PROCUREMENT ISSUES PROPOSAL NUMBERS TO CONTRACTORS ISSUE RFQ FOR CONTRACTOR PREQUAL SELECT CONTRACTORS KEEP FILE ON SELECTION PROCESS SEND SELECTION LETTER ADDRESS PROTEST

21. KEEP FILE ON SELECTION PROCESS RECEIVE COST PROPOSALS RECEIVE TECHNICAL PROPOSALS EVALUATE TECHNICAL PROPOSALS ASSIGN POINTS COST POINTS QUALITY SELECTION = QUALITY ENHANCEMENT PERFORMANCE CRITERIA