DESIGN-BUILD EXEMPTION FINDINGS
ORS 279C.330(1) AND ORS 279C.335(2)(b)
1. Firms Available to Bid. All interested and qualified contractors statewide will have an opportunity to provide a response to the RFP, which will be advertised in the Daily Journal of Commerce.
2. Operational, Budget, and Financial Data. The approximate cost of the work to be performed under the construction contract for the Disaster Relief Logistics Center Project (Project) is estimated at $1,000,000, to be funded by state and local grant funds. Funding for this Project is limited, so achieving a least cost solution to the problem is essential to Project success. Having a Design-Builder involved early in the construction phasing will allow the District to work with the contractor to develop value engineering options and start work immediately as portions of the Project design are completed. District finds that the ability to carefully screen experienced contracting firms in this area will significantly affect the Project’s schedule and cost. The Design-Build Contracting method has been shown in its use by other agencies in Oregon to alleviate financial risk due to minimizing delay and requests for additional work and change orders. By undertaking this pilot Project, it is anticipated that the District will find that reduced risks provide a significant value and substantial cost savings to the District.
3. Public Benefit. There will be a general public benefit from utilizing the Design-Build process by:
- Obtaining, through a Design-Build team, engineering design, plan preparation, value engineering, construction engineering, construction, quality control, and required documentation as a fully integrated function with a single point of responsibility;
- Integrating value engineering suggestions into the design phase, as the designer will also employ the construction contractor under a team approach, with the potential of reducing contract changes;
- Reducing the risk of design flaws, misunderstandings and conflicts inherent in construction contractors building from designs in which they have had no opportunity for input, with the potential of reducing contract claims;
- Shortening project time as construction activity (early submittals, mobilization, subcontracting and advance work) commences prior to completion of a “Biddable” design; and
- Obtaining innovative design solutions through the collaboration of the contractor and design team, which would not otherwise be possible if the contractor had not yet been selected.
4. Value Engineering. The RFP selection process, early involvement of the contractor, and negotiated contract approach gives the contractor a significant opportunity to engage in value engineering (i.e., the evaluation of what a system does as compared to cost). The selected Contractor will be on board immediately following award of a design-contract to assist the Project team with construction scheduling, phasing, costing, operator interaction issues, quality assurance, and design constructability reviews. The Contractor will also advise the District and the design team regarding specialty construction issues and any long lead time procurements. Contractor contributions to the design phase permit a collaborative approach to value engineering which ultimately translates into time and cost savings realized by the District. Construction issues which may not otherwise be known to the design team can be factored in and addressed while the design is drafted. In turn, this results in a higher quality product, lower costs, and a telescoped timeline.
5. Specialized Expertise. It is important to utilize a general contractor that has demonstrated expertise in managing, scheduling, and performing with limited funding for an operational fire and life safety emergency service provider in a satisfactory manner. The District, therefore, finds that selecting a firm through an RFP process allows the District to contract with a firm with the appropriate expertise. The necessary mix of experience and expertise for a Design-Build contractor cannot be adequately evaluated in a formal lowest responsible bid selection process. A qualified project manager with strong leadership skills is one of the components required for a successful Contractor project. The RFP process will allow the District to review the qualifications of each proposer’s project manager and confirm the manager’s ability, experience, record of quality, past performance and integrity needed to carry out the proposer’s contractual obligations. The process will also allow the District to identify qualified teams that have met critical deadlines in past projects and that have the ability to work collaboratively to meet project needs. The costs for such specialized expertise are included in the overall Project budget and within the accepted GMP.
6. Public Safety. The RFP selection process will allow the District to consider the Contractor’s safety records and safety programs in the solicitation process. The public will also benefit by swift completion of the District’s Project, to ensure the best response conditions for providing emergency fire and life safety services. Using this pilot process is anticipated to remedy delays in design and construction by accelerating the Project’s completion schedule in comparison to standard contracting methods.
7. Market Conditions. The market is currently experiencing a contractor shortage and significant inflation. Identifying and contracting with the full Project team at an early stage will allow the District to contract with its construction team at the outset and capitalize on current market conditions, rather than having them affect a later bid/build phase. Such cost and market variables can be anticipated in the GMP, but ultimately should have no effect on the District. The Contractor and subcontractors cannot go over the GMP, but may come in under the GMP, and the District will realize those cost differences. Having a qualified Contractor play a role as an integrated team member early in the Project with the District, the Architect and other Project members provides advantage to the District, as it adds expertise to the design phase which translates into District savings and provides more budgetary certainty.
No negative financial impacts to the District are expected as a result of using the RFP solicitation process to select a Contractor for the Project. There is a sufficient pool of qualified Oregon-based construction companies with expertise in the type and size of project planned, and there are additional qualified firms located in the greater Pacific Northwest. It is anticipated that more competitors will submit proposals for this Project than if a standard design-bid-build approach is used, allowing the District to select from among a larger number of qualified contractors.
8. Technical Complexity. Because of the site and schedule constraints, effective project planning and coordination will be crucial among the District, project manager, architect and Contractor. Strong budget and schedule controls will be essential. The conventional design-bid-build approach would contain too much risk for the District on this Project. The Contractor will bring specific construction expertise to the team process and assist in addressing specific Project challenges as part of its pre-construction services. The Contractor will also provide input on issues such as public safety, phasing and coordinated scheduling. The Design-Build method encourages innovative planning and coordination that further improve the construction schedule and on-site conditions. The ability to coordinate and manage this project would be especially challenging to an inexperienced or narrowly-focused team. The RFP process allows the District to consider the proposer’s experience and expertise in completing this type of work, its sensitivity to safety and legal issues, and the qualifications and experience of its project manager and support team.
9. Funding Sources. The District will finance this Project through state and local grants. Therefore, it is critical for the Project to come in on budget and on time from both legal and public perception perspectives. The Design-Build process, with its maximum price provisions, value engineering potential, constant oversight from a project manager, and construction input beginning in the design phase will help the District stay within its budget and wisely spend public funds.
10. New Construction or Renovation of an Existing Structure. This Project involves construction of a new Disaster Relief Logistics Center.
11. Occupied or Unoccupied During Construction. The Project involves new construction, rather than improvements to an existing facility, so will be unoccupied during construction.
12. Single Phase or Multiple Phases of Construction Work to Address Specific Project Conditions. This Project includes a multiplicity of technical issues related to anticipated needs associated with a new Disaster Relief Logistics Center. It is important to the Project’s success for both budget and schedule that the District have a general contractor that understands the complexity, has the ability to manage these types of complex projects, and develops bid or proposal instructions to attract appropriate subcontractors to perform Project work. The District, therefore, finds that selecting a firm through the Design-Build method allows the District to contract with a firm with the needed technical phasing expertise.
13. Whether the District has the Personnel, Consultants and Legal Counsel that have Necessary Expertise and Substantial Experience in Alternative Contracting Methods. Staff, in conjunction with the Contractor (who will be chosen based upon qualifications and experience with the Design-Build project delivery model), an experienced contractor, as well as other Project team members and the District Legal Counsel, together, will have the level of expertise with the Design-Build alternative contracting method needed to produce a high-quality Project outcome.
14. Unlikely to Encourage Favoritism or Substantially Diminish Competition. As noted in Finding 1, competition will be encouraged through the use of an RFP solicitation process, with notice of the RFP published so as to reach a wide range of potentially interested contractors who have experience with design-build contracts in partnership with design specialists and award will be made based upon identified selection criteria. This ensures: (1) reasonable competition; (2) the best contractor to complete the job for the District and the public; and (3) a cost-effective process for responding contractors. The solicitation will be advertised in the same manner as a traditional low bid solicitation, with full disclosure of the planned solicitation documents and process. Uniform evaluation criteria will be used in the selection and award of the Design-Build firm, and any subcontracted construction work elements will be subcontracted and procured through open competitive bids managed by the Contractor and based on identified selection criteria. Favoritism cannot play a role in the selection of the Contractor, as award will be based upon set, weighted RFP criteria. All qualified firms will be able to participate in an open, competitive selection process, with an opportunity to protest the award before it is final.
15. Will Result in Substantial Cost Savings. The proposed exemption has the potential to achieve substantial cost savings for the District through the involvement of the contractor in the design and construction phases of the Project. Early input by a contractor during the design process is expected to contribute to general cost savings through constructability assessments, life cycle cost analysis, value engineering, cost saving revisions, and result in fewer costly change orders.
Cost savings will also be realized because, through the RFP selection process, the District will select a well-organized, experienced design and construction professional. That expertise should also lead to fewer change orders and, in turn, reduce District and design staff time to design, negotiate, and administer any needed change orders.
The proposed exemption allows for earlier contractor procurement, allowing the Project to avoid cost increases due to material shortages or cost escalation. If subcontracted costs are less than identified in individual contract prices, some or all of the savings will be passed on to the District under the agreement required of contractor.
Further, only one solicitation will be required, avoiding a second formal competitive bidding process and associated costs of up to $5,000.
16. Time Savings. The proposed exemption allows the District to condense the overall time required to complete construction of the Project by enabling the District to contract for construction services simultaneously. Having a contractor on board early in the process allows for coordination in the development of the Project construction schedule and the initiation of early site work, where advantageous or warranted. This can help to shorten construction periods and minimize construction operational impacts. Early detection of potential construction difficulties, from a contractor’s view, can also prevent potential delays and costly and time-consuming change orders.