sixth annual airport project delivery summit · owner’s perspective designer lacks strong cost...
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SIXTH ANNUAL AIRPORT PROJECT DELIVERY
SUMMIT
Best Practices – Airport Owner’s Share Experiences
David MaasDeputy DirectorSan Jose International Airport
Typical Delivery Method / Selection Options
Design-Bid-Build
CM at-Risk
Design-Build
DELIVERY METHOD Low Bid
Best Value:
Total CostBest Value:
Fees
Qualifications Based
Selection (QBS)
Competitive Sealed Bid; Low Bid; Inv. to Bid (IFB)
CM/GC; GC/CM; CMc; ECI
Engineer-Procure-Construct (EPC)
n/a n/a
IPD Not Typical
Not Typical
n/a
Multi-party; Alliancing
Common Nicknames
SJC n/a
n/a n/a
SJCn/an/aSJC
n/an/a
n/a
Some History – The Program in 2001$2.8 billion Capital Development Program
(completion 2010)
Serve 17.6 Million Passengers By 2010
6% Projected Passenger Growth
40 Gates Terminal Complex
Central Terminal, Terminal A Concourse Only
Double-Deck Roadway
14,000 Space Combined Rental Car/Public Garage
8,700 Space Long-Term Parking Garage
Approved Master Plan
Central Terminal Rendering
North Concourse Construction
$324 Million Budget
Design Bid Build – Multi-Prime Contracting
• 10 Packages
Program Manager – PB Aviation
Master Architect – Gensler
Agency Construction Manager – Gilbane
Owner Airport/Public Works
North Concourse PackagesSite prep and excavationFoundation, Structural Steel, Building EnclosureBaggage SystemsFit OutFF&ESignage & GraphicsShared Use IT SystemBoarding BridgesSecurity EquipmentEDS Procurement
DBB Multi Prime ExperienceGoal was to accelerate scheduleOwner Responsible to Manage Risk• Phasing• Constructability• Conflicts in drawingsRequires a lot of management by ownerNeed to set clear team roles and expectationsFormal PartneringNorth Concourse was ultimately on budget
Fast Forward to 2005Revised Forecast Projected 17.6 million passenger activity by 2017
Capital Development Program escalated to $4.2 billion
Activity Forecast 4% passenger growth
Competitive cost per enplaned passenger (CPE) between $8.00 - $9.00
Resulting Financial Model Supported a Capital Program of $1.5 billion
Community wanted Airport modernization
TAIP Goals
Meet the program needs of stakeholders
Complete Program as quickly as possible
Budget and Schedule Fixed
Adjust Scope as necessary
TAIP Program Scope
Temporary Terminal C and Future Removal (Dark Grey)
Terminal B – Phase I (Orange)
North Concourse (Yellow)
Terminal A Modifications (Green)
ConRAC (Purple) and Surface Parking (Grey)
Roadway and Overcrossings
Phase I Program Budget
Terminal C Renovation $ 26 millionTerminal C Demolition $ 10 millionTerminal A Modifications $ 105 millionTerminal B, Phase I $ 165 millionConRAC Garage $ 260 millionRoadways/Surface Parking $ 141 millionNorth Concourse $ 324 millionTerminal A/A+ Equity Upgrades $ 40 millionAll Other Program Costs $ 323 millionProgram Total, Phase I $1,394.0 million
Why Design Build?
Owner’s Requirements Design/Bid/BuildMultiple Prime Fast Tracked Design-Build
Save Money Best Choice
Save Time Good Choice Best Choice
Limit Changes Orders and Contractor Claims Best Choice
Creative Solutions to Achieve Schedule, Scope & Budget Objectives
Best Choice
Evaluation of Contracting Delivery Options:
Need For One Entity In Control of Constrained SiteDesign Builder Best Able to Manage Risk
– Design– Constructability– Escalation– Conflicts Between Project Elements
Maximize Construction Through Schedule Acceleration
Fixed Schedule & Scope, Variable ScopeConcern over control of quality
Decision to Use Design Build
Qualifications Based SelectionPre Advertise
– Web site– Exemplar Contract
Advertise– Single Point of Contact– Prequalification
RFP/Interview– Four Proposals– Three Interviewed
Criteria– Knowledge, Skills and abilities– Team structure & past working relationships– Past experience with Design Build & Airport work
Program Delivery Structure
Design-Builder - Hensel Phelps with Named Subs
Integrated City Management Team
Two Master Program Support Consultants
Cost Estimating Consultant
Financial Auditing Consultant
Airline Technical Representative
Co-Location of Design Builder and City Management Team
Design Build Contract Value
Original Contract $488,211,000City Controlled Contingency $ 24,560,000Original Contract (Not To Exceed) $512,771,000
New Scope • Amendment 1 – ConRAC $105,274,000• Amendment 2 – ConRAC $ 13,000,000• Amendment 3 – Terminal A Equity $ 27,933,000• Change Orders (10%) $ 8,996,000Subtotal Amendments to Contract $155,203,000
Total Revised (Not To Exceed) $667,974,000
Total Value of $513 Million
Task Order Based
Off ramps at 30%, 60%, and 100% Design
Guaranteed Max Price Task Orders
Shared Savings on Contractor Contingency
Schedule Incentives/Liquidated Damages
Fixed Fee
Contract Terms
Open Book Auditing
Project Labor Agreement
Subcontracting Plan
Dispute Resolution
Owner Controlled Insurance Program
Contract Terms
Authority to Execute Task Orders
Authority to Use Program Reserve
Authority to authorize Owner Controlled Contingency
Single Appropriation For TAIP
Transparency - Regular Reporting To Council & Stakeholders
Delegation of Authority
Program Validation Process
The Unit Terminal Scheme– Slide Terminal B North Wrap NC– Eliminate a Temporary Terminal C
Create an Airside Expansion at Terminal A– Move BHS to under Expansion– Consolidate Security Checkpoint – Provide a Better Flow through Terminal A
Owner’s Perspective
Drives a paradigm shift in management and staff thinking
Requires a strong belief in (and the practice of) the principles of partnering.
Demands a keen focus on teamwork.
Requires a trust in your teammates from the onset. (Ronald Reagan: “Trust but verify”.)
Owner’s Perspective
Work is completed more quickly
Reduces “finger-pointing”. Contractor and designer are contractually bound rather than independently contracted to the Owner.
Contractor (not the Owner) must work with designer to quickly resolve issues.
Owner must be willing to surrender control once the GMP is signed. Requires good Program Criteria Documents (PCDs) and initial plans (30%).
Owner’s Perspective
Designer lacks strong cost estimating skills. Contractor compensates with extensive construction cost history and job experience.
Having the Contractor “in the room” brings needed focus to phasing, constructability, budget and schedule.
Results in a smaller Owner Management Team which reduces the Owner’s costs.
Good Program Controls are essential
Interface of owner held contracts have to be well managed
Need for contingency limits scope
Final Thoughts• As the Owner you must consider your tolerance for risk.
• Selection Process:- Confirm demonstrated prior Design-Build experience- Evaluate prior Owners’ experiences with the design-build
contractor- Assess the contractor’s past relationship with the proposed
designer and contractors/subcontractors- Ensure only one Prime Contractor- Ensure Contractor and Subcontractors are not also the Designers- Architect of Record must control all of the engineers and specialty
firms contributing to design
• Fix the Contractor’s fee for the overall project during contract negotiations.
Final Thoughts
Co-locate Owner and Design-Build Team to fast track the project by streamlining communications between all design-build participants.
Understand and be prepared to meet the time demands/turn-around times required of you as the Owner to achieve your schedule objectives
Work to gain delegated authority and control all aspects of the procurement process
Final Thoughts
To ensure integrity of the design intent designer must be involved in all meetings, discussions and value management sessions affecting scope, budget & schedule.
Ensure senior-level Owner participation during design to maintain the project’s fast pace.
Ensure “design-build” concept buy-in. If the Owner manages the project with a “design-bid-build” mentality relationships will become strained and progress slowed.
Stakeholder involvement essential for timely decision-making.
Summary - Design-Build Value Added
The terminal, garage and roadway projects completed below budget and ahead of schedule.
The Design-Builder assumed a much greater role in managing the design effort thus reducing City staff costs.
Program Completed under budget
Disruption to passengers & airlines minimized
Airlines and community satisfied with facilities
Terminal B
Terminal Zone
SIXTH ANNUAL AIRPORT PROJECT DELIVERY
SUMMIT
Best Practices – Airport Owner’s Share Experiences
David MaasDeputy DirectorSan Jose International Airport