Presentation on theme: "Robert L. Moultrie Chairman & CEO"— Presentation transcript:
1 Robert L. Moultrie Chairman & CEO What You Need to Know Before Embarking on a New Building Program: What Really Happens on Bid Day?Presented by:Robert L. MoultrieChairman & CEO
2 Discussion PointsTrends in the Design and Construction IndustryResearch FindingsEvaluation of Alternative DeliveryThe Evolution of Project Delivery Systems Factors Leading to Alternative Delivery MethodsCritical Success Factors
5 Trends in the Design and Construction Industry A growing number of public and private owners faced with large construction projects and tighter schedules are using outside program managers to deliver projects. (ENR Magazine)A greater acceptance of Alternative/Total Responsibility at RiskAll states, with the exception of two, allow alternative delivery“Volume of turn-key projects expected to increase from 40% to 60% over the next two years” (Design-Build Magazine)
6 Research Findings from the Construction Industry Institute Regardless of delivery method, research showed that cost increases by the contractor were due to:Lack of early planning participation by the contractor (constructibility reviews and value engineering suggestions)Lack of previous working relations of the architect/engineer and the contractorContractor’s recognition of engineering errors during the bidding process, but there was no intercommunication
7 Factors Leading to Alternative Delivery Methods Changes in Owner staff makeupA focus on the Owner’s “core business” (and it’s usually not building large capital programs)A need to downsize in-house capabilitiesThe business client and Owners have changed
8 Design-Bid-Build (aka, Traditional Approach) Your ChoicesDesign-Bid-Build (aka, Traditional Approach)Construction Management at-RiskDesign-BuildThe project delivery method defines the relationships, roles, responsibilities, and risks of all parties involved.
9 Traditional Approach: Design-Bid-Build Architecture /EngineeringGeneral ContractorOwnerOwnerGeneral ContractorBIDS OUTTOHIRESHIRESArchitecture /EngineeringS
10 Traditional Approach: Design-Bid-Build Owner holds separate A/E & Construction contractsPotential for adversarial relationshipsQualifications are rarely considered in contractor selection on public work projectsNo assurance that design is within budgetNo benefit of contractor input during designNo ability to accelerate project deliveryOwner has no input in subcontractor selectionIncreased change ordersOwner does not share in savings: Contractor awarded Lump SumArchitecture /EngineeringGeneral ContractorOwnerKey:Contract ResponsibilityCommunication
11 Bidding Timeline Nothing happening, WHY? 1 Month Before Bid: (In Today’s Market)Nothing happening, WHY?Too busy on other bidsPlenty of timeCasual sub contactAll you are accomplishing is getting on the bid scheduleManufacturers check specs to see if they are protected2 Weeks Before Bid:Sub contact begins in earnestGood contractors begin quantity survey or take-offBad contractors rely on subs for this and change order owner if quantities are wrong
12 Bidding Timeline Week of The Bid Implications? Project execution planning and general conditions formulationAlliances may be formed between subs and GC’sSubs begin to look at the job and decide to bid or passFinal Addenda is issued – subs begin take-offCalls to subs from the GC get franticManufacturers begin to look at the jobBid packages are broken downImplications?GC’s & subs are trolling for the right circumstances:Holes in drawingsWeak / little competitionGood subs interest from their cadreWhere are the Owner’s interests in this process?
13 Bidding Timeline Bid Day – Bid Time is 2:00pm Why? A good contractor will have a “box run” total priceSub budgets + pricing + self-pricing + SWAGSBefore computers, this is where the cut & add sheet beganGeneral Conditions & fees are setSub & supplier quotes start to trickle inBy lunch, should have a quote for each bid package except for mech. elect. & other specialtiesWhy?Subs “shop” prices
14 Bidding Timeline 1:30pm – CHAOS! Bid Day1:30pm – CHAOS!½ price number is out that contains an alternate materialShould we carry it and hope we get it approved?We only have 1 elect & 1 mech number out of 20 subs in each tradeWhere are the sub quotations?The low mason only has 85% of the block & brick in our take-off -- and he can’t bond the job!
15 Bidding Timeline 1:45pm – PANDAMONIUM!! Bid Day1:45pm – PANDAMONIUM!!All the mech and elect numbers have come in – including the 10 you have never heard ofYou can not carry the low number – you can only shop it to someone you knowDo you have enough phone lines and people to get all the numbers?We won’t use him again, unless he’s low!
16 Bidding Timeline How much do we “discount” the project? Bid Day1:55pm – DECISION TIMEHow much do we “discount” the project?Getting all the sub quote numbers & tabulating themAdding up all the numbers and addressing all the alternates and proposal technicalities1/3 SkillIt is difficult to win against “cheaters” / “shoppers”How can we get unspec’d materials approved?How will you buy-out your discount?1/3 EthicsDid you get most of the right numbers?Did you discount enough?How “hungry” was the competition?1/3 Luck
17 What Really Happens on Bid Day? Traditional Approach with GC Bid What the Owner does NOT see.**Indicates lowest bidGeneral Conditions, Site Supervision, Insurance, Fee and Bond costs are in addition to the above bids and included in the overall Lump Sum.
18 Construction Management At-Risk Owner holds separate A/E and construction contractsHigher degree of teamwork between architect and contractorQualifications based selection; negotiated feesPre-construction services during design to verify budget and constructabilityProject acceleration may be implementedSubcontractors may be competitively bidOpen reporting to ownerGMP late in designOwner may share in savingsOwnerArchitecture /EngineeringConstructionManagerSKey:Contract ResponsibilityCommunication
19 What Really Happens on Bid Day? CM At-Risk Pricing What the Owner Does See
20 Design-Build: General Contractor Led Team Owner holds single contract for total Design-Build deliveryArchitect is subcontracted to CM because CM provides the bondContractor (costs) driven approachBid or Qualifications based on selectionPre-Construction Services during Design to control budget and constructabilitySubcontractors may be competitively bidEnables “Fast-track” construction schedulingWell defined program is essential to define scopeOwner may participate in savingsOwnerHIRESContractorSSTAFF orHIRESArchitectureEngineeringBUILDING PHASEDESIGN PHASE
21 Design-Build: Integrated Firm Owner holds single contract for Program Management, A/E & ConstructionHighest Degree of TeamworkQualifications Based Selection; negotiated feesIntegrated design and pre-construction from the startSubcontractors typically are competitively bidEnables fast-track constructionGMP early in the design process100% savings returned to Owner
22 What Really Happens on Bid Day? Design-Build Approach What the Owner Does SeeD/B* Value Engineering suggestions can discount bids by 5%
23 Traditional vs. Alternative Design-Bid-BuildLump sum amount establishedPlanningArchitecture / EngineeringBidConstructionCM at Risk80% Complete documents; GMP establishedPlanningArchitecture / EngineeringBid individual trade packagesConstruction13.3% FasterOneSourceIntegrated60% complete documents; GMP establishedContractor Led80% complete documents; GMP establishedPlanningArchitecture / Engineering“Faster Fast-Track”Bid individual trade packagesRealistic budget or confirmation of cost limitationConstruction33.5% Faster
24 Delivery Method Matrix Project Delivery Options(with basis for selection)# of CONTRACTSDesigner & Contractor(2 separate contracts)Design/Builder(1 combined contract)SELECTION TYPESCompetitive Sealed Bid(Low Bid)Total Construction Cost is solecriteria for final selectionDesign-Bid-BuildDesign-BuildCompetitive Sealed BidCompetitive Cost Proposal(Best Value)Total Construction Cost and othercriteria are weighted factors in the final selectionCM/GCCompetitive CostProposalDesign-BuildCompetitive CostProposalCompetitive QualificationsProposal(Qualifications Based Selection)Total Construction Cost are not afactor in the final selection criteriaCM / GCCompetitive QualificationsProposalOneSourceCompetitive QualificationsProposal
26 Making the Right Choice No one method is perfect for every project!Selecting a delivery method depends on factors such as level of quality desired, budget, and scheduleRegardless of delivery method there are other tools that can help you meet your quality, cost and schedule goals.
27 The use of Building Information Modeling (BIM) Industry ToolsA well-defined planThe use of Building Information Modeling (BIM)Early Cost, Schedule & Constructability Input
28 Critical Success Factors Two critical success factors for any project, regardless of delivery method, are:1. A well thought out, comprehensive facility plan that addresses all of the client’s objectives and all of the necessary requirements of the project, and2. A competent and skilled manager, knowledgeable in the project’s niche market, to manage the program and implement the plan - from start to finish
30 Building Information Modeling PLANNINGNew approach to building design, construction, and managementVirtual three dimensional model that offers continuous and immediate informationParametric building modeling technologyDynamic … uses a relational database together with a behavior model to capture and present building cost and schedule information.CONTINUOUSIMPROVEMENTDESIGNParametric Change EngineViewsAnnotationsComponentsIMPLEMENTATIONANALYSIS
31 South Paulding High School Dallas, GA Part of an overall Program Management At-Risk program, which includes construction of a new 100,000 SF elementary school as well.240,000 SF, 1,600 studentsAuxiliary facilities: gymnasium, dining hall, 500-seat auditoriumAthletic facilities: 3,000-seat football stadium, practice fields, eight-lane synthetic track, and baseball/softball complex