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Lessons Learned by a Design-Build General Contractor: Johnston Construction Trey Johnston, PE, DBIA, President & CEO and Mike Geissler, PE, DBIA, Design-Build.

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Presentation on theme: "Lessons Learned by a Design-Build General Contractor: Johnston Construction Trey Johnston, PE, DBIA, President & CEO and Mike Geissler, PE, DBIA, Design-Build."— Presentation transcript:

1 Lessons Learned by a Design-Build General Contractor: Johnston Construction Trey Johnston, PE, DBIA, President & CEO and Mike Geissler, PE, DBIA, Design-Build Manager

2 Who is Johnston Construction?

3 Johnston Construction Company Multi-trade Engineered Construction since 1976 Regionally focused, full service design-build environmental general contractor Integrated design-build partner with experience from raw to finished water & influent to effluent Treatment plant construction accounts for 80% of our work with other related construction accounting for the balance

4 Johnston Construction Company: Differentiating Capabilities Fully Integrated Design-Build (small projects) Team Approach to Design-Build (majority of projects) Professional Certifications including PE & DBIA Full Self Perform Capabilities (excavation, concrete, mechanical) Vast Design-Build Experience (since 1980s)

5 An Academic Perspective: Performance Evaluation of Design-Build vs. Design-Bid-Build for Water and Wastewater Facilities Research Study Directors Susan Bogus Halter, PhD, PE (Univ. of New Mexico) Keith Molenaar, PhD, DBIA (Univ. of Colorado) Jennifer Shane, PhD (Iowa State Univ.) Research Study Objectives Develop a statistically-significant data set of municipal water and wastewater infrastructure projects Quantify the relative cost, schedule, and quality differences Provide an overall evaluation of design-build and design-bid-build delivery methods Funded by the Water Design-Build Council

6 The median schedule growth after contract award for design-build projects is half as large as the schedule growth for design-bid-build projects; Design-build projects finish on or below contract price twice as often as design-bid-build projects; The average intensity (value of work completed per month) of design-build projects is more than double that of design-bid-build projects; Contracts using guaranteed maximum prices (GMPs) are more likely to have no schedule or cost growth as compared to projects with lump-sum contracts; and There is no significant difference in constructed quality between design-build and design-bid-build projects. Key Study Findings: Performance Evaluation of Design-Build vs. Design-Bid-Build for Water and Wastewater Facilities

7 Lessons Learned: Design-Build Cost Advantages

8 Lesson Learned: Design- Build Cost Advantages Design-Build RFPs provide project costs from multiple teams prior to the owner investing in the project Minimal expense is incurred in developing the RFPs Sole source responsibility minimizes owners risk Benefit from not having to adhere to Spearin Doctrine (owner warrants plans and specs) which does not apply to design-build

9 Change orders result from changes in scope (not design omissions) Standard bidding documents are not required The common practice is for the design to comply with standard specification and details The owner should plainly state the specific features wanted in the RFP Lesson Learned: Design- Build Cost Advantages (cont)

10 Lesson Learned: The Fast Track Requires Team Commitment

11 Team Challenges of Fast Tracked Projects Preliminary design, equipment selection and pricing are performed concurrently during the RFP and proposal stage. The owner should provide direction on the acceptability of the major equipment selection when the proposal is accepted. The design is finalized around specific equipment manufactures rather than specifications. Equipment may be procured and shop drawings may be reviewed while the final design is being completed.

12 Lesson Learned: Use Cost Information to Guide the Design

13 Use Cost Information to Guide the Design General Contractors have the unique perspective of working with many engineers and seeing different approaches to similar projects – they frequently think outside the box Constructability issues can be identified and corrected early - before costs are incurred General Contractors may offer the most economical construction means and methods during the preliminary design phase. Complete estimates can be done along with conceptual designs

14 Lessons Learned: Key Tenets of a Successful RFP

15 Lesson Learned: Key Tenets of a Successful RFP Clearly define the project objective Identify regulatory deadline Upgrade plant while maintaining operation Increase capacity Be upfront about the level of owner control required Submittal review & approval authority Compliance with standard specifications and details Identify plant specific items that must be included in the project Use descriptive form (prescriptive only as needed) Clearly define the evaluation criteria

16 RFP Format: General – Descriptive A general RFP has a descriptive style Gives Design-Build team maximum flexibility and owner least control Owner will realize the greatest cost and time savings Owner should be comfortable with the lack of control or problems will arise during the project Recommendation: The design-builder should include a detailed scope of work with clarifications in the proposal Not recommended if the owner has strong preferences for equipment, materials and finishes Highly recommend an allowance/contingency format to allow the owner to add upgrades or additional scope Examples Preference for maximum thickness slabs Preference for FRP panels instead of gypsum board The addition of wash down stations for maintenance personnel Additional spare parts and extended warranties

17 RFP Format: Specification - Prescriptive A Specification-based RFP has a prescriptive style Gives Design-Build team limited flexibility and owner greatest control Owner limits cost and time saving opportunities Owner retains maximum control Design creativity is limited as a result of specified equipment and finishes May expose owner to liability for performance and delivery issues

18 Lesson Learned: Design-Build Offers Flexibility in Proposal Evaluation Low Bid – price only Once prequalified, assume qualifications are equivalent Frequently followed on smaller projects where a qualification proposal is not warranted The RFQ process is typically by invitation only based on the owners past experience with Design-Builders Experience & Price A point system can be developed for evaluating proposals Experience and price proposals submitted in separate envelopes Qualifications are rated before opening and evaluating price proposal to avoid influencing the qualification evaluation. Example: Clearly Defined Evaluation Criteria (next slide)

19 Example: Clearly Defined Evaluation Criteria

20 Lesson Learned: A Successful Project Requires Design-Build Process

21 Design-Build Processes Importance of specific design-build process is often overlooked Traditional processes must be reinvented to handle typical characteristics of design-build Design-build is often fast paced Design-build often includes concurrent design & construction Design-build teams operate from many locations Success requires a well organized, documented process Team experience with design-build is critical

22 Submittals Require Effective Distribution & Clearly Defined Direction

23 The process must evolve as technology moves forward to encourage usage and participation Encourages collaboration from all team members from various design disciplines, maintenance groups and operations personnel Remote offices are included as if they were on-site Communication is faster, easier and more efficient The project will stay organized from procurement through startup and training when comments are organized and the comment history is maintained Submittals Require Effective Distribution & Clearly Defined Direction

24 Lesson Learned: Successful Design- Build Teams are Aligned

25 A Design-Build Philosophy Guides the Team to Make Decisions that Advance the Project JCC leads project throughout the entire process to ensure there are zero accidents and project is on time and below cost JCC will deliver value to the owner while containing costs and maximizing profits JCC accepts the additional risks that come with design-build but is attracted to the opportunities to utilize our strengths in personnel, processes, and knowledge base to achieve exceptional client satisfaction JCC will proactively address issues that threaten the safety of the project participants, conformity with project schedule, and economic return of the team JCC will manage employees, subcontractors, vendors, suppliers, design professionals, quality control professionals, owner representatives, regulatory agencies and all other extended team members that influence the project success

26 Lesson Learned: Build Great Design-Build Teams

27 Design-Build Team Basics The best teams are built to offer the best value to owners Trust and cooperation will determine the success of the project The reputation of team members is an important selection criteria Integrity Quality Safety The Design-Build Contractor and Engineer will protect their quality reputation

28 Can the team demonstrate a history of success on past projects? How have they handled difficult situations on past projects? Have the Construction PM & Design PM worked cooperatively in the past? Will the Construction PM and Design PM work well together? Design-Build Team Success Factors

29 Lesson Learned: Efficiency and Speed in Execution

30 6 th Street Water Treatment Plant Completion of the project within regulatory deadlines required a fast-tracked construction schedule with close coordination between team members

31 A fast-tracked project was required to accommodate treatment of a new raw water source Black & Veach Construction, Inc. worked with United Water to permit and procure the selected equipment while selecting a design-build contractor The design-build approach saved time over preparing 100% drawings and specifications before contractor selection 6 th Street Water Treatment Plant

32 Quantico Mainside Treatment Plant Upgrade A previous upgrade that had not addressed all treatment requirements and left the plant unable to meet permitted discharge limits. The design-build approach was selected under a special fast-tracked contract method to identify key issues and correct them quickly and economically.

33 The RFP presented a brief engineering report highlighting areas which needed improvement The successful team was to provide the most value for the available funds The project includes design, permitting, construction and commissioning of improvements, such as: Procurement was accelerated - shop drawings were requested within one week of contract execution based on contingent orders and verbal commitments. Owner Control – various equipment scope changes increased the time required to procure some equipment. These issues were incorporated into the procurement plan quickly; however, funding issues put strain on the schedule. Quantico Mainside Treatment Plant Upgrade

34 Quantico Mainside Treatment Plant Upgrade (Chlorine Contact Tank)

35 Quantico Mainside Treatment Plant Upgrade (UV Channels)

36 Lesson Learned: Collaboration/Innovation

37 Amber Meadows Pump Station The design-build approach yielded creative solutions to seemingly impossible issues facing the upgrade of an existing station with confined space issues, adjacent property boundary constraints and bypass requirements.

38 Station located inside 20ft sewer easement No right-away flexibility Adjacent roadway & apartment complex Amber Meadows Pump Station (Before)

39 Utilize suction lift pumps in lieu of submersibles Utilize existing wetwell Minimize bypass pumping Eliminate confined space issues Amber Meadows Pump Station (After)

40 Little Patuxent WRF – Dreyers Ice Cream The additional of a major ice cream manufacturer in the service area required the fast-tracked upgrade of the treatment process to handle high organic loading. CMAR was chosen to incentivize the team to provide a successful fast-tracked construction project in a collaborative setting during the design and construction of the project.

41 Collaboration using an Alternate Delivery Method, CMAR, allowed the project to progress through design, permitting and construction with maximum input from all personnel An open book approach was taken to cost estimating with owner and owners representative participating directly in the building of the estimate. An off-ramp was available if a price could not be negotiated successfully. Little Patuxent WRF – Dreyers Ice Cream

42 Lesson Learned: Sole Source Advantages

43 BIMC Sanitary & Storm Pump Station The single source responsibility of design-build and a clear and concise proposal allowed the maintenance contractor to upgrade aging infrastructure quickly.

44 A small scope should not deter an owner from pursuing design- build Maintenance projects can be completed quickly – without major permitting Design, specification, and drawing preparation are minimized A few projects were priced, not all were funded, and the owner/maintenance contractor did not pay anything in design fees BIMC Sanitary & Storm Pump Station

45 Deer Path Woods Pump Station Small pump station project performed for a repeat client. The use of design-build reduced the overall project cost by taking advantage of single source responsibility and eliminating duplication found in a traditional design and construction project.

46 Small projects are well suited to design-build Design costs can be minimized when a team has a history of working together Cost savings are achieved when drawings are prepared by the installing contractor Deer Path Woods Pump Station

47 Lesson Learned: Effective Use of Expertise

48 Northrop Grumman AIMS Pretreatment Plant JCC and Siemens teamed to turnkey the pretreatment plant for a new printed circuit board manufacturing process. Selection of team members provided the ability to fast track a specialized facility.

49 Northrop Grumman AIMS Pretreatment Plant The team provided the owner with a high quality turnkey solution Siemens is a leader in pretreatment technology for the printed circuit board segment and provided a system from their standard catalogue of products. This provided a high confidence level in the ability of the system to perform and allowed us to quickly progress the design JCC is a quality, regional design-build contractor with the ability to provide sole source responsibility and self perform all trades

50 Frederick Solids Handling Upgrade JCC and Buchart-Horn teamed to upgrade the digesters to accommodate ENR loading and restore usage after complete failure of the covers occurred. The team had prior knowledge of the digesters and plant operations and they had done a design-build project to improve digester mixing on one of digesters previously.

51 Frederick Solids Handling Upgrade The design-build team each brought significant expertise to the project to benefit the owner

52 WSSC Energy Conservation Measures Building a team of specialists, JCC and BG&E, partnered to provide an energy performance project which upgraded failed equipment without using the capital or operating budget.

53 WSSC Energy Conservation Measures The Constellation Energy Division of BGE has the expertise to perform innovative energy performance projects which self fund JCC provided the expertise to price many Energy Conservation Measures (ECMs) based on conceptual estimates for evaluation by the owner The procurement method had not been applied to waste water treatment in the past - teamwork overcame those barriers

54 Sidebar: Design-Build Opportunities in Energy Performance Contracting

55 Energy Performance Contracting Provides Design-Build Opportunities Energy represents the largest controllable cost of providing water or wastewater services to the public. Most facilities were designed and built when energy costs were not a major concern. With large pumps, drives, motors, and other equipment operating 24 hours a day, water and wastewater utilities can be among the largest individual energy users in a community. (Ensuring a Sustainable Future: An Energy Management Guidebook for Wastewater and Water Utilities)

56 Opportunities: Find the Low Hanging Fruit – Energy Usage is an Easy Target Accounts for 3% of the TOTAL electric load in the US (CEE, 2007) Eighty percent of water treatment plant energy consumption goes to pumping – raw water, high service, backwash, and distribution system boosters (EPRI 2002) Drinking water and wastewater treatment consume up to 35 percent of a utilitys operating budget (Jacobs, Kerestes, and Riddle 2003/WRF) Energy costs for water and wastewater can be 1/3 of a municipality's total energy bill (Ensuring a Sustainable Future: An Energy Management Guidebook for Wastewater and Water Utilities) Electricity is the 2nd largest operating cost at WWTPs, ~25 to 40% of the total operating budget (PGE, 2003) Loads expected to increase by 20% in next 15 years due to increased populations and more stringent regulations (Ensuring a Sustainable Future: An Energy Management Guidebook for Wastewater and Water Utilities) Electricity accounts for ~80% of all water processing and distribution costs at WTPs (EPRI, 2002)

57 Action Areas

58 Takeaway: Opportunities for Action Changes in regulations, aging infrastructure and new technology provide potential opportunities Energy efficiency investments often have outstanding rates of return and can reduce costs at a facility by 5%, 10%, 25%, or more (Ensuring a Sustainable Future: An Energy Management Guidebook for Wastewater and Water Utilities) Upgrades will SELF FUND though FUTURE ENERGY SAVINGS Additional projects may be incorporated using the excess cost savings Suggest Incorporating ECMs into the strategic plan ECMs often go hand-in-hand with increased efficiency ECMs often include increased capacity ECMs often include increased ability to meet effluent limitations ECMs often reduce O&M requirements ECMs result in reduced energy costs

59 Questions? Trey Johnston, PE, DBIA, President & CEO and Mike Geissler, PE, DBIA, Design-Build Manager

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