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Innovative Contracting UDOT Director of Construction and Materials Kris Peterson.

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Presentation on theme: "Innovative Contracting UDOT Director of Construction and Materials Kris Peterson."— Presentation transcript:

1 Innovative Contracting UDOT Director of Construction and Materials Kris Peterson

2 Innovative Contracting Works to Improve the Process Reduce impact to public Reduce overall project time Limits Schedule Growth Reduce overall project cost Limits Cost Growth

3 Types of Innovative Contracting Contract Manager / General Contractor (CMGC or Design-Build A + B Bidding Lane Rental Warranties Incentives Performance-based

4 Design PhaseConstruct Phase Design Bid Build Design Build CMGC/DB CMGC Select Advertise NTP Select Advertise NTP Select Advertise Select AdvertiseOpen Bid Negotiate NTP Open Bid Negotiate NTP Open Bid Negotiate NTP Open Bid Negotiate NTP B1Bn B2 Timeline Comparison

5 CMGC Roles UDOT Plan Build Design Consult Design Contractor UDOT Bid Build Contractor Negotiate Why Innovative Contracting

6 CMGC Benefits UDOT Controls Design UDOT Selects Innovation Lessons Learned

7 Other CMGC Benefits / Risks Benefits Reduces design time and design errors Improves constructability Identifies and reduces risk Early procurement Lower cost Risks Sole source contract Bid price needs to be 10% of EE or below Negotiation skills Why Innovative Contracting

8 Reduce Risk to Reduce Cost & Increase Profit DBBDBCMGC Contractor Risk Owner Risk Risk

9 Selection Strategy Select complex projects That benefit from contractor input With third-party risk That need innovation Need early procurement Select projects with a budget emphasis Take time for design Why Innovative Contracting

10 CMGC Requires Approval Experimental Process - SEP Federal Projects per year 12 State Projects per year Justification required Project Development approves FHWA must also approve federal projects

11 Contracting Process Develop RPF Selection Criteria Price components Advertise Selection team Complex participants Region participants AGC and ACEC representatives Select & Award

12 Processing Time

13 Price Benefits Brings cost accountability to the table Brings cost competition to the table Brings cost innovation to the table Provides validation of good price for public trust

14 Price in CMGC RFP Price Continue to use the average target Most realist cost Approach to Price Emphasize during pre-proposal Change the format Where are we going?


16 Utah CMGC Projects (State) Where are we going?

17 Utah CMGC Projects (Federal) Where are we going?

18 Build Phase 1 Build Phase 2 Design Build Design UDOT Plan Contractor Build Phase n Design Consultant

19 Design-build Benefits Faster Design/Construction Smaller cost growth Smaller schedule growth Innovation (Contractor controlled) Risks: Design-build is built for speed Contractor owns the design

20 Design Build Advertising Process Letter of Intent (Interest) LOI RFQ RFP Low-Bid Best-Value

21 Checklists Located on the 2008 Standards / Checklists website UDOT/Project Development/Standards and Specifications /2008 Standards/2008 Project Checklists

22 Selection Committee

23 Reduce Time on Project A+B Bidding Contractors bid the time to complete the project and a dollar amount for work items Award to lowest combinations of time and cost Lane-Rental Minimize the time lanes are closed Contractors are charged a fee for closing lanes and shoulders Focus on time the public is affected

24 A + B Bidding Benefits: Improved coordination between prime and sub-contractors Reduced construction time minimizes impacts to users Contractors are required to put together a well conceived schedule Drawbacks : Contract changes are magnified; too many changes nullify the advantages of A+B Acceleration techniques may require more resources for contract administration More hours and over-time budget required from Region staff Negotiations for additional work are more intense since time is a bigger issue

25 A+B Candidates Good: Interstate Projects Mill and Overlays Projects with Detours Bridge Painting Intersection upgrades New Construction/Reconstruction Bad: Third-party delays Rehabilitations

26 Lane Rental Benefits: – Better coordination of prime and sub-contractors – Minimized impact to traveling public – Better public perception due to fewer un-utilized lane closures Drawbacks: – Extra effort by staff to monitor lane rental – Negotiating lane rental adjustments can be difficult with contract changes – Potential added costs to the project

27 Lane Rental Candidates Good: Mill and Overlay (2-lane roads with flagging ops. or intersection impacts) Safety projects (guardrail/signing/striping/bridge painting) Bad: New construction Long-term projects

28 Warranties Guarantee all or portions of a construction project Free of defects in material Workmanship Time Period Correct deficiencies during warranty period

29 Warranty Pros and Cons Benefits Quality and durability guaranteed Longer acceptance time Less inspection needed Drawbacks Owner must ensure warranty Warranty may not be collectable Staffing to monitor warranty

30 Incentives - Disincentives Paid for early completions Penalized for late completions

31 I & D Pros and Cons Benefits Reduced construction time May lower contract admin costs PI benefits Control of project acceleration Drawbacks May require additional funding Contract changes may lead to disputes

32 Pay-for-Performance Pay is dependent upon final outcome Measured against performance criteria Set by contract Pay withheld for poor performance Corrective action required

33 PFP Pros and Cons Benefits Eliminates blame Shifts risk to contractor Higher quality Drawbacks Time to measure performance Long project close- out Monitoring is time- consuming Contractor may have to finance a portion

34 Innovative Web Site ents/Guidelines.pdf Dec 2005

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