3**75 percent of the city of New Orleans flooded (per IPET) **Illustrated flood depths based on preliminary data and high water marks. Numbers will become more specific as data is verified.(maximum New Orleans flood depths pending from MVN hydrology)
4A Priority of Two Administrations “Now, even as we continue our recovery efforts, we're also focusing on preparing for future threats so that there is never another disaster like Katrina. The largest civil works project in American history is underway to build a fortified levee system. And as I — just as I pledged as a candidate, we're going to finish this system by next year so that this city is protected against a 100-year storm.”President Barack ObamaXavier University, New OrleansAugust 29, 2010
5Best Practices System Program Management Acquisition StrategyDesign Build / Cost Plus ContractsBest Value Source SelectionEarly Contractor Involvement (ECI)Program Management Support ContractConstruction MaterialsGovernment Furnished BorrowSupply Contracts for Sheet Piles & BorrowImproved TechniquesValue Engineering – systems study completePile Load Tests – in advance of contract awardPress Pile, Spiral welded pilesDeep soil mixing, sand blanket and wick drainsEarned Value Management System (EVMS)Leverage National & Regional Resources
6ECI Contracting A Fixed Price Incentive contract IAW FAR 16.403 A project delivery method where the Corps engages the services of a general contractor to provide “preconstruction services” concurrent with design effortThe contract includes the Government’s ability to exercise an option for the constructionProvides for successive target price adjustments as the design matures, with the objective of managing the final construction cost to optimum.Contract includes terms and conditions to allocate risk among the partiesData and information from 13 Jun 05 ENR, page 38.
7What it ain’t… Design Contract Non-competitive acquisition Government retains design responsibility either through in-house or with a separate AE contract.Preconstruction services are not “Brooks Act” services.Non-competitive acquisitionContract is procured IAW FAR 15 and application of FARPrice and non-price factors are evaluated.Design-Build ContractTwo separate entities (designer & construction manager/general contractor)Both report to the owner (Government).Legal anaalysis by GSA determined legal sufficiency, supported by further review by COE lawyers.
8Acquisition Strategies Comparison PhaseTraditional Acquisition(D-B-B)Early Contractor Involvement(ECI, also I-D-B-B)DesignCompleted prior to advertisement of construction contractPreconstruction Services – construction contractor provides input on design constructability, VE, means & methods, construction phasing, etcAwardComplete designs are used to advertise and award construction contractConstruction option - awarded when major design decisions are complete and price negotiated (designs may be <100%)ConstructionNTP and construction begins after award of contractConstruction can begin prior to final designs being completed
9Relative Project Delivery Timelines P&DFundingConstructionFundingDesign Bid Build ProjectDeliveryDesignConstructionECI delivery advantage depends upon timing of design and construction funds.ECI ProjectDeliveryDesignConstructionCM selection and design begins with P&D funds.Design-BuildProjectDeliveryDesignConstructionTotal duration equal or less than ECI, but cannot commence design/construction until construction funding is received.PY -1PYTime
10ECI ContractFixed-price Incentive (successive targets) contract (FAR clauses and )RFP will provideSOW for preconstruction services (Base)Concept engineering solution with typical sections for proposal preparation for construction initial target pricing (Option)Ceiling priceEvaluation criteria, based on best value tradeoffs, including priceNegotiated ProcurementAward of preconstruction services (Base) as a Firm Fixed PriceExercise of Construction (Option) as a Firm Price Incentive
11Contract ScheduleAn example of ECI Solicitation Line Items are shown below. This is remitted with the proposal.Additional line items may be added for long lead items if required.ITEM NO.SUPPLIES/SERVICESQUANTITYUNITUNIT PRICEAMOUNT0001BASEPreconstruction ServicesFFP1Lump Sum$____________0002OPTIONConstruction PhaseFPIInitial Target CostInitial Target ProfitNTE $____________The contract schedule shown above is a representative example for an ECI contract. The contract is composed of two major parts – the preconstruction services base which is a service contract. The second part is the construction option. This part is the equivalent to a normal construction contract and is subject to Davis Bacon.The preconstruction services phase is awarded as a fixed price contract. At this step of the contract, the ECI contractor will be providing the typical services: cost estimating, design review, constructability reviews, design and construction scheduling and construction phasing. This is where the ECI contract is a bit different than a normal construction contract by allowing input from the construction contract during the design phase of the project.The construction phase is awarded at a point where major design decisions are complete but the design package is not necessarily at 100%. This allows us to get to construction sooner than a normal design bid build process.This schedule will be remitted with the proposals. The contractor will fill in the prices for the preconstruction services and the initial target cost and profit.
12When to Use ECI Urgency - very tight mandated schedules Funding - funding stream is availableComplex “one of a kind” project, with no standard designSize - large enough to attract experienced firmsUncertainty – risk in delaying award while requirements are being developed
13When to Use ECI - OtherChallenging site, or other unique aspects that would benefit with a Contractor’s input during design phaseIt would be advisable to have a collaborative effort during design and construction between Designer, Builder, Owner, User to ensure Project success
14New Orleans ECI Projects Seabrook GateIHNCLPV 11127,720 FT DSMLPV 14530,800 FT T-WallLPV 14636,600 FT T-WallLPV 14843,100 FT T-WallWest Closure Complex (PRO)
15New Orleans East Largest Deep Soil Mixing Project in the World LPV (CSX Railroad to Michoud Canal)Scope: Raise existing levee via deep soil mixing and landside alignment shift; raise T-wall around Pump Station 15; add a floodwall tie-in from the levee to the IHNC Surge Barrier.Status: Construction is 78 percent complete and will be finished in June 2011.The deep soil mixing project along this 5.3-mile stretch of levee in New Orleans East is the largest deep soil mixing project in the country, and one of the largest in the world.Approximately 1.7 million cubic yards of land is being treated with the deep soil mixing method to strengthen the underlying soil. The next largest deep soil mixing project in the U.S., part of Boston’s Central Artery/Tunnel Project (also known as the “Big Dig”), is a distant second, with 650,000 cubic yards of ground treated.There are 8 deep soil mixing rigs, each with their own batch plant, on the construction site.More than 500,000 tons of cement/slag is being incorporated into the new levee.The deep soil mixing rigs inject a concrete slurry into the underlying soil to produce stabilized soil columns. Each stabilized soil column is about 5.25 feet in diameter and extends about 67 feet deep.A row of columns, or a panel, is about 54 to 98 feet long, depending on the properties of the different soil layers.The distance from panel to panel along the levee is roughly 15.5 feet.The project is budgeted at about $295 million.
16Bayou Sauvage National Wildlife Refuge New Orleans East LeveeBayou Sauvage National Wildlife RefugeOldLeveeNew LeveeOver 1 Superdome of Clay(4.9 mil cy) Required~1 Football Field
17Raise and Strengthen Levees / Floodwalls Higher Floodwalls and Levees New T-wallOrleans MetroSt. Bernard ParishOldI-wallNew 32-foot T-wallOldLevee ElevationNew Orleans East
18(2 miles constructed per month) St. Bernard FloodwallMRGOMRGO50 Eiffel Towers of Steel(2 miles constructed per month)23 Miles LongIn St. Bernard Parish, work is under way to construct new structural features that, when complete, will reduce the risk associated with a storm surge that has a one percent chance of occurring in any given year. Risk reduction features will be operational in June 2011.Approximately 23 miles of T-wall and 3 gates constitute the St. Bernard Parish risk reduction system.Approximately 115,000 linear feet of sheet pile, with each ranging in length from 20 feet to 40 feet, is being used to support the floodwall’s foundation.Approximately 42,000 H-piles, with each H-pile ranging in length from 90 feet to 160 feet, are being used to support the floodwall’s foundation. In other words, the project includes about 994 miles of H-piles, which is approximately the distance between New Orleans and Chicago.Approximately 25,000 tons of rebar is being used to reinforce the concrete flood-walls.Approximately 300,000 cubic yards of concrete, or roughly 6.5 million square feet, is being used in floodwall construction. That is 1.75 times the amount of concrete used in construction of the Louisiana Superdome.Approximately 207,000 tons of steel H-pile is being used in floodwall construction. That is approximately 28 times the amount of metal used to construct the Eiffel Tower. If the total tonnage of steel is included, the St. Bernard floodwalls incorporate about 50 Eiffel Towers worth of metal.Approximately 250 construction workers from St. Bernard Parish are employed by the various contractors.The entire risk reduction system in St. Bernard Parish is budgeted at approximately $1.5 billion.Central Wetlands
19Katrina storm surge elevations were much higher elsewhere Top of Floodwall: EL +32’Katrina storm surge elevationswere much higher elsewherealong the Gulf Coast.Top of Base Slab:EL +21’500-YEAR STILL WATER ELEVATION*:EL +22.5’100-YEAR STILL WATER ELEVATION*:EL +18’HURRICANE KATRINA’S STILL WATER ELEVATION* AT THIS LOCATION: EL +18’Designed for a 100-year SurgeTop ofStabilization Slab: EL +17.5’St. Bernard Floodwall, near the IHNC Tie-In(not to scale)*Still water elevation does not include waves
20Seabrook Floodgate Complex The Seabrook Floodgate Complex will consist of a 95-foot-wide sector gate and two 50-foot-wide vertical lift gates approximately 540 feet south of the Ted Hickey Bridge with floodwall tie-ins on the east and west sides.Other components of the Seabrook Floodgate Complex include upgrading the Alabama Great Southern Railroad gate to 100-year heights, constructing new T-walls that will tie into the lakefront risk reduction system and raising the Hayne Boulevard ramp. When complete, the Seabrook complex will close the only remaining gap along the lakefront in Orleans Parish.Construction is under way and will continue into 2012; however, the 100-year level of risk reduction will be achieved in June 2011 with the completion of the Seabrook Interim Closure Structure, a cofferdam inside which the floodgates will be built.
21Seabrook Floodgate Complex CONSTRUCTION COFFERDAM ALLOWED TO ACHIEVE HYLA BY 01 JUNE 2011
22West Closure ComplexThe WCC removed 26 miles of levees and floodwalls from the first line of defense
23West Closure ComplexThe GIWW West Closure Complex will consist of a navigable floodgate, a pumping station, floodwalls, foreshore protection, and an earthen levee. The project will also require the dredging of Algiers Canal, as well as the realignment of Bayou Road.Project challenges are maintaining navigation traffic on the GIWW (a Federal navigation channel with heavy commercial barge traffic) and the location of the complex in relationship to the Environmental Protection Agency’s Bayou aux Carpes Clean Water Act (CWA) 404(c) area, a wetland area of national significance.A 225-foot navigation navigable floodgate will be constructed to ensure safe navigation on the highly trafficked GIWW and tie in to a pumping station. The design of the navigation gate closure is being done in collaboration with representatives from the navigation industry and the US Coast Guard to ensure that the safest and most reliable system will be constructed.When the gate is closed during a storm event, 19,140 cubic feet per second (cfs) pump station is required to evacuate the rainwater pumped into the Harvey and Algiers canals by 9 pump stations along the canals. The pump complex will be the largest of its type in the nation.To minimize environmental impacts to the Bayou aux Carpes 404(c) area, the floodwall will be constructed on the eastern edge of the wetlands, within 100 feet from the western bank of the GIWW for a length not to exceed 4,200 feet. The floodwall will start in the north with a water control structure across the Old Estelle Outfall Canal, extend southward along the eastern edge of the Bayou aux Carpes 404(c) area and tie into the navigable floodgates on the GIWW. A protective berm will be constructed on the channel side of the floodwall to protect it from barge impacts, provide concrete scour protection, and serve as a maintenance access road. Foreshore protection will be constructed along the GIWW, adjacent to, but not within, the Bayou aux Carpes 404(c) area.A new earthen levee will be constructed east of the closure complex to tie into the existing levees. Bayou Road will be realigned to provide access around the new levee on the protected side.Dredging of the Algiers Canal will be required from the Belle Chasse Tunnel south to the confluence of the Harvey and Algiers canals, a distance of approximately 4.8 miles. Approximately 700,000 cubic yards of material will be excavated from the Algiers Canal. The dredged material will be used beneficially in a marsh restoration project in the Jean Lafitte National Historical Park and Preserve (JLNHPP) or placed in the Walker Road borrow sites.
24SolicitationAward Preconstruction Services early in design phase (15 – 30%)Pricing schedule includes:Preconstruction servicesInitial Target Cost: optionInitial Target Profit: optionSelection of Contractor – ECI Specific Evaluation FactorsExperience with preconstruction servicesLocal market knowledgePlan to involve major subcontractorsOral interviewsSufficient design information for contractors to adequately provide an Initial Target CostSOW section defining preconstruction services and expectationsECI specific clauses7 Factors:1. Corporate Experience (experience w/ Complex buildings/IT infrastructure/preconstruction services2. Past Performance3. Oral Interviews4. Preconstruction services major subcontractor involvementLocal Market KnowledgeSmall Business participationPriceEscape Clause: Construction (Option)Competitive pricing of subcontracted workMinimum three sourcesGovt participates in bid opening and price/quality trade-offsSelf-preformed work permitted if competitively priced & in the best interest of the GovtSubcontractors submit drawing and spec reviewsAward of Construction OptionNegotiate within ceiling priceSatisfactory participation during preconstructionOtherwise, issue for competitive bidding
25Solicitation – Scope of Work Preconstruction services and expectationsCost estimating (live market conditions)Design consultationConstructability reviewsSubcontractor inputValue engineering – cost controlBid package developmentDesign and construction schedulingConstruction phasingRisk managementProject orientation and partneringConstruction/design integration – design liaison
26Solicitation – Scope of Work Escape clause – Govt. not obligated to exercise option:Poor preconstruction participationExcessive team turnover and lack of commitmentLack of Congressional authorization/appropriationCan’t negotiate within funds availableCompetitive subcontractor pricing – Govt. attends subcontractor bid openingsDefines production point for use in FAR (100% design)Addresses payment processes
27Solicitation - Clauses Successive Target PricingMidway Target Price scheduled when all major design decisions have been madeMidway Target Price includes:+ Midway Target Cost (MTC, Based on 35-90% Design)+ Midway Target Profit (MTP, 1.5% - 3% of MTC)Midway Target Price < Ceiling PriceMidway Target Price recognizes significant scope changesIf Midway Target Price is under ceiling, the contracting officer may elect to exercise the construction optionAddresses similar details for final Firm Target Cost and Profit at 100% design
28Solicitation - Clauses Adequate Accounting System: Self certification that accounting system is in compliance with FAR (c)(1)Earned Value Management System (EVMS) CertificationOfferor’s accounting capable of supporting EVMSEVMS - Size dependent:Under $20M: not applicable$20M to $50M: offeror self-certifies complianceOver $50M: offeror self-certifies and is audited
29Solicitation - Clauses FAR , Incentive Price Revision – Successive TargetsDefines ceiling price (ECC)Outlines alternative if firm fixed price agreement is not reached:Profit adjustment formula (% negotiated)Profit increases if final price is lower than Initial Target CostProfit decreases if final price is higher than Initial Target CostFinal price determined after completion of work, using profit from profit formulaFailure to agree is not subject to Disputes clauseIncentiveProfit can go up as CM controls/cuts costs between the Midway and Firm Target Prices.
30Example: Profit Adjustment Formula Scenario:ExampleParagraph (d)(3) blanks are negotiated at the Midway Target Pricing with the following values: Increase/Decrease Profit by 5%, Range of FTP is 2% - 6%Initial Trgt Cost (ITC):$17,000,000Firm Trgt Cost (FTC) :$16,000,000Initial Trgt Profit (ITP):$800,000Firm Trgt Profit (FTP): *$850,000Initial Trgt Price:$18,140,000Firm Trgt Price:$17,170,000Ceiling Price: +$18,300,000Ceiling Price:** $18,300,000+ The ceiling price was inserted in the solicitation [paragraph (a), blank no. 2] as $18,300,000.* The Firm Target Profit is calculated based on the following:FTP = ITP – (5%) [FTC-ITC] - or –FTP = 800,000 – (5%) [$16M-$17M] = $850,000.** Under this scenario, the project scope did not change between the initial target pricing and the Midway Target Pricing. Therefore, no change to the ceiling price was warranted and the FTC is lower than the ITC and the Contractor’s profit increased. You should notice that the Construction Reserve amount (2% of the FTC) has been lowered to $320,000.
31Design PhaseJointly develop bid packages & design schedule: design team, CM, Corps & UserDesign estimates shared until negotiation point reached (IGE still close hold)Exercise construction option at optimum stage of design (project dependent)Establish Final Target 100% design - settle as FFP w/incentivesTie payment during design to design milestonesControl designer bright ideas after construction option is exercised
32Validation Phase (HPO Only) Construction of access roadsNecessary for Project Access & Pile Load testsConstruction of Working PlatformsSet-up of Contractor’s staging areasPerform Pile Load TestsSupport completion of Final DesignsEstablishment of No-Work ZonesAllowed Pre-Ordering Steel H-PilesTest SectionsComplete DSM Mix Designs
33Managing Cost & Pricing Data After Construction Award Cost and Pricing data were required for the firm target proposal only.Otherwise, consent packages and Vouchers gave the Government a good look at the Contractor’s actual pricing without a further requirement for cost and pricing data.
34ECI Contracting Benefits Model allowed to arrive at well documented fair and reasonable costsECI contract vehicle allowed the Government to make common sense changes to the contracts prior to fixing the priceFacilitated both price increases/decreasesEncompassed the Non-Federal sponsor concernsEliminated the need for modificationsStreamlined the administrative process for both the Government and the Contractor and saved costs for both partiesAllowed for additional resources as necessary to maintain the contract completion dates
35Lessons LearnedApproach ECI with different mindset – more open way of doing business on all sidesBetter education of entire team of what ECI means (particularly customer)Staff big and staff early (Voucher Validators, Scheduler, Cost Estimators)Coordination - SOW for A-E and ECI contractorCollocation of Team MembersFacilitate interaction between designers and contractorReview risk analysis at each major milestone
36Lessons Learned (cont.) Establish control of late sponsor comments by emphasizing schedule and bid packagesClearly define process for notifying PDT of design changes, amendments and modificationsAllocate resources according to design schedule (more Civils early, more Mechanicals later)Allow more time for joint estimates or different approach to joint estimatesImprove sub-contractors involvement in pre-construction phaseGood risk decisions made w/ contractor input
37HQUSACE Policy Legal Sufficiency Requirements Why FFP contract not suitableUse FAR , Incentive Price Revision – Successive Target clauseEnsure the contractor has an adequate accounting systemEnsuring adequate price competition and fair and reasonable pricing (include cost realism)Negotiating the ceiling price – Recommend offerors to proposeLevel of design at award of preconstruction servicesScope of preconstruction servicesStructure of the contract and predominanceFunding the construction management contract (P&D vs Constr.)
38Final Negotiated Price ECI ResultsHPO ContractInitial Target PriceInitial Ceiling PriceFinal Negotiated PriceDifferenceLPVArcher, Western, Alberici$294,894,736$411,600,000$342,275,251$69,324,749LPV 145Chalmette Levee Constructors$357,245,988$488,000,000$237,128,127$250,871,873LPV 146St. Bernard Levee Partners$280,484,886$452,000,000$272,294,417$179,705,583LPVCajun Construction$300,000,000$380,000,000$349,999,235$41,582,109 IHNC-01 SeabrookAlberici Constructors$154,000,000$181,450,000$164,511,456$16,938,544Sub-Totals >>>$1,462,857,130$1,924,850,000$1,366,427,142$558,422,858Savings to the Government:29%
39The Delivery TeamTEAM NEW ORLEANS: COLLABORATION AND SHARED REPONSIBILITYTeam New Orleans has made significant progress on the HSDRRS in the last six years. The accomplishments of this team of federal, state, local governments, levee authorities, levee boards, academia, industry and many more is historic and unparalleled.Committed to ensuring that New Orleans could handle a 100-year storm surge by 1 June 2011.
40**75 percent of the city of New Orleans flooded (per IPET) **Illustrated flood depths based on preliminary data and high water marks. Numbers will become more specific as data is verified.(maximum New Orleans flood depths pending from MVN hydrology)