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10. Architects Design Group - Fire Station Delivery Options4D City of Kalispell Post Office Box 1997 - Kalispell, Montana 59903-1997 - Telephone (406)758-7700 Fax(406)758-7758 REPORT TO: Mayor Boharski and City Council Members FROM: Craig Kerzman, Building Official Chris Kukulski, City Manager SUBJECT: Project Delivery Options and Recommendations MEETING DATE: July 2, 2001 BACKGROUND: The City initiated a space needs study which has advanced to the Point where the results of the study can be implemented. Information gained thus far will be used for project design and facility construction to resolve the identified needs. The City staff asked ADG to investigate three delivery options: design -bid -build, construction manager at risk and design -build. Attached is a report of ADG's investigation and recommendation to go the design -bid -build as the delivery option. Once this decision is made, we will need to wait until the Downtown Urban Renewal project list has been amended before moving any further. RECOMMENDATION: The City Council pass a motion adopting the consultant's analysis and recommendation to proceed with the design -bid -build as the delivery option. ALTERNATIVES: As suggested by Council ? Gv-� Craig KoWz an Building Official C"x . 9�. Chris A. Kukulski City Manager Attachments: Delivery options analysis and recommendation Report compiled: June 28, 2001 Architects Design Group Number One Sunset Plaza • Kalispell, MT 599o1 406-257-7125 FAX.,406-756-3409 June 25, 2001 City of Kalispell P.O. Box 1997 Kalispell, Montana 59901 Attn: Chris Kukulski, City Manager Re: Fire Station Dear Chris, In response to your questions regarding the delivery methods the City might consider in the design and construction of a new Fire Station, I enclose a discussion for three of the most utilized. They include design -bid -build, contractor -construction manager at risk, and design -build. Each methodology is described including a relationship diagram and the positive and negative aspects of each. In order to complete a recommendation about delivery, I have developed a draft schedule for your review. This schedule is important because it indicates there is ample time to enter a construction agreement prior to the June 17, 2002 deadline, utilizing any of the delivery methods. I believe there is some question as to the legality of entering into a publicly funded project by any construction delivery method other then those formed by competitive bid. In an effort to gain some current insight, I spoke with Mr. Russ Katherman, State of Montana Architecture & Engineering Division construction contracts administrator. In his opinion, because the legislature did not authorize the alternative forms of delivery before them in the last session, competitive construction bidding remains the single legal method. Regarding your question, the possible legal issues do not change my recommendation. It is my opinion the City should pursue the design -bid -build scenario. I make this recommendation because: A. Time is not an issue. I see no reason to complicate the process. B. The City would be best served in a process that is very interactive with the design team, where the owner significantly participates in decisions regarding scope, quality, cost and time issues. C. This is a process with very simple lines of responsibility that are historically well understood. The City should not require additional professional representation to successfully implement nor complete the project. I provide the following information as an abbreviated comparison between the delivery methods under consideration. JohnW Peterson, A.I.A. Michael A.Absalonson,A.I.A. Glen aAnacker,A.I.A. Frank J. di Stefano, A.I.A. A. Design -Bid -Build Positive Factors • Project scope, quality and time are developed with owner participation and well defined prior to construction agreement execution. • Construction cost at the time of agreement execution is based upon full design documents. • Roles of the owner, architect and contractor are historically understood and time tested. Negative Factors • Construction cost, although estimated, is not confirmed until the time of bidding. B. Contractor/Construction Manager at Risk Positive Factors • Capability to reduce overall time lines through fast -track project management. • May provide guaranteed maximum cost early in the design process. Negative Factors • Not in an agency role with the owner. As a constructor, contractor is also a vendor to the owner. • Under guaranteed maximum price or fixed price, project scope or quality is subject to revision to meet contractor cost commitments. Scope and quality may be in question. • This form of delivery is sufficiently new that there is no widespread agreement on risks and rewards. C. Design -Build Positive Factors • Capability to reduce overall time lines through fast -track project management. • May provide guaranteed maximum cost early in the design process. Negative Factors • Under guaranteed maximum price or fixed price, project scope or quality is subject to revision to meet design -builder cost commitments. Scope and quality may be in question. • Owner does not usually have the ability to select "designer" -architect based upon qualification to project type. • Owner may not be in a position to write performance criteria as a basis to select design -build team. Architects Design Group has provided services to clients within all of the delivery options described in this letter and the attachments. We have also provided design -build services as a project developer. Through these experiences, I feel my recommendation to pursue Design -Bid -Build is given from a practical perspective, not just academic. I attached contract forms provided by the American Institute of Architects for your further reference. They are included because their review will enlighten you to the nuances of each delivery method, in specific contract language. If you have questions regarding this information, please feel free to call. Sincerely, Uul Michael A. Absalonson, A.I.A. Cc File Encl Noted PROJECT DELIVERY METHODOLOGY INTRODUCTION There are three predominant methods for the delivery of a building project. These methods include the traditional Design -Bid -Build, Construction Management and Design Build. There are several variations to each of these delivery methods, and each variation reflects special project requirements. This discussion addresses Design -Bid -Build, Construction Management where the General Contractor -Construction Manager is at risk and Design - Build. Each method of delivery has positive and negative aspects, and may place the owner and the various design and construction professionals in different role relationships. References have been made to American Institute of Architects documents. Review of this information greatly enhances ones ability to understand the specific demands of each delivery method. Architects Design F// Group 1 Project Delivery Methods DESIGN -BID -BUILD Design -Bid -Build is the predominate method of project delivery of both publicly funded and private projects in Montana. In its most usual form the process allows for the selection of an architectural/engineering team who provides design, bidding and construction contract administration services on the owners' behalf, in close association with the owner. Usually a single general contractor constructs the project. The relationship diagram below shows the owner has separate agreements with the architect and the contractor. Communication between the owner and the contractor is generally through the architect. The architect acts as an administrator between the prime contracting parties. Reference: A.I.A. Document A101-1997-Stipulated Sum Positive Aspects of Design -Bid -Build Roles of the owner, architect and contractor are well defined • Owner is highly involved in the design process and the design is fully developed before bidding proceeds At the time of bidding, project scope, quality and time are well defined • Construction cost is based upon a full design documents, and usually developed based upon the competitive bidding process • Scheduling is generally not complicated Negative Aspects of Design -Bid -Build • The sequential process may be more time consuming then some alternative delivery methods • Cost, although estimated, is not confirmed until the time of bidding 2 Project Delivery Methods CONTRACTOR -CONSTRUCTION MANAGER AT RISK Over the last thirty years the "time" factor relating to construction projects has become more focused. Construction management as a profession formed a method of delivery that may allow a project to be divided into any number or types of smaller contracts. This division and scheduling often allows the project to begin construction before all of the issues are identified. The construction manager may serve the owner as either an advisor or as a construction contractor. In the role of an advisor, the CM manages the separate construction contracts, but has no financial responsibility for the actual construction work. When acting as the construction contractor, the CM undertakes financial risk by entering agreements under fixed -price, cost-plus or a guaranteed maximum price scenario. This removes the risk of cost and control responsibilities from the owner. The later scenario is the Contractor -Construction Manager at Risk. From "The Architects Handbook of Professional Practice, vol. 2, page 395 "Specific CM responsibilities may vary from project to project. While the A.I.A. and others publish standard forms of CM agreement, the delivery approach is sufficiently new that there is no widespread agreement on roles, responsibilities, risks, and rewards." Architect & Consultants Owner Contractor/CM at Risk Subcontractors I I Subcontractors I I Subcontractors Reference: A.I.A. Document A121/CMc-1991 [Guaranteed Maximum Price] 3 Project Delivery Methods Positive Aspects of the Construction Manager at Risk Capability to reduce overall time lines through fast -hack project management May provide guaranteed maximum cost early in the process Negative Aspects of the Construction Manager at Risk Not in an agency role with the owner, but a vendor to the owner • May represent additional management fees to owner May effect traditional relationship management expectations May effect traditional allocation of risk expectations • Under guaranteed maximum price or fixed price, project scope or quality subject to revision to meet cost commitments Under cost-plus a fee there is no guarantee of cost 4 Project Delivery Methods DESIGN -BUILD Where design -bid -build and construction manager at risk options usually provide the owner with contractual relationships that separate the design and construction portions of the work, the Design -Build option offers a single point of responsibility with no separation of design and construction. From "The Architects Handbook of Professional Practice, Vol. 2, page 398 Design -Build is described; ..."most appropriate in situations where the owner is in a good position to specify requirements, is reasonably sure of what the market -place will supply and has confidence in a single entity's ability to both design and construct the project" Consulting Architect Owner Option Owner Design -Build Entity Record Architect I I Trade Contractor I I Trade Contractor Reference: A.I.A. Document A191 Where the owner does not have the ability to fully define the project in terms the design builder may use to establish quality and cost, the owner may retain an architect to assist in a "consulting" role, not a prime design and administration role. Communication generally occurs between the parties of the agreement, not the architect. Positive Aspects of Design -Build Avoids owner interface coordination of designer -contractor • Capability to reduce overall time lines through fast -track project management • May provide guaranteed maximum cost early in the process • May provide financing, or land acquisition where owner is not financially capable • May provide build -leaseback 5 Project Delivery Methods • May build -operate -transfer as options Negative Aspects of Design -Build • Single point responsibility places no traditional entity in a position to represent the owner' interests • Unless owner is sophisticated, owner may have to retain architect to assist with writing of performance requirements used as a basis to select design -build team. Owner may be required to retain consultant to evaluate proposals, administer contracts, payments and site quality -contract performance issues Under guaranteed maximum price or fixed price, project scope or quality subject to revision to meet cost restrictions There are similar hybrid delivery methods referred to as "design build". They may include various forms of design and general contracting where either the architect or the general contractor undertake "team leader" responsibilities. The defining feature is that each is involved in the process at an early stage and at the same time, although one is administratively subservient to the other. Consulting Architect Owner Option Owner Design -Build Entity Contractor Record Architect I I Trade Contractor I I Trade Contractor Contractor is Design Builder and Single Point of Contact 6 Project Delivery Methods sulting Architect Owner Option Owner Design -Build Entity Architect Contractor Trade Contractor I I Trade Contractor I I Trade Contractor Architect is Design Builder and Single Point of Contact 7 Project Delivery Methods CITY OF KALISPELL NEW FIRE STATION & REMODELING SCHEDULE KALISPELL • MONTANA ARCHITECTS DESIGN GROUP ADG: 01-111 C - 06/25/01 PROJECT SCHEDULE ACTIVITY BEGIN END PERIOD NOTES Begin Advertising for Architects 06/22/01 07/20/01 29 Interview 07/24/01 07/24/01 1 Select Design Team 07/25/01 07/27/01 3 Negotiate Fees & Execute Agreeements 07/27/01 07/31/01 5 Begin Project Programming 08/01/01 08/13/01 13 FIRE DEPARTMENT PHASE 1: Build Fire Station Schematic Design 08/13/01 09/07/01 26 Schematic Design Costing 09/10/01 09/17/01 8 Authorization to Proceed 09/17/01 09/17/01 1 Revision to Urban Renewal Plan 12/01/01 2002 Design Development 10/03/01 01/11/02 40 Design Development Costing 01/14/02 02/04/01 22 Authorization to Proceed 02/05/02 02/05/02 2 Construction Documents 02/05/01 04/08/02 63 Construction Document Costing 04/08/02 04/26/02 19 City Authorizes Bidding 04/29/02 04/29/02 1 Reproduction of Bidding Documents 04/29/02 05/03/02 5 Let Bids 05/06/02 Receive Bids 05/30/02 Evaluate Bids & Recommend Contractor 05/31/02 05/31/02 1 Prepare Agreements & Bonds 05/31/02 06/07/02 8 Execute Construction Agreements 06/10/02 06/10/02 1 Begin Construction Phase 1 Station 06/11/02 Project Schedule 1 2003 Construction Substantial Completion Fire Department Moves to New Station CITY HALL PHASE 2: Remodeling of Fire Station Begin Construction Phase 2 Remodeling Construction Substantial Completion Departments Move to New Offices 06/13/03 363/12M 06/16/03 06/27/03 12 06/30/03 02/27/04 211/8M 03/01/04 03/12/04 12 Project Schedule 2