1. Fire Station Delivery MethodsREPORT TO
FROM:
SUBJECT:
City of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903-1997 - Telephone (406)758-7700 Fax(406)758-7758
Honorable Mayor and City Council
Chris A. Kukulski, City Manager
Project Delivery Options
MEETING DATE: August 27, 2001
BACKGROUND: The decision to select the most effective and efficient delivery option to build the new
fire station and retrofit City Hall has been on hold for nearly 60 days. Even though we cannot move forward
with this project until after the public hearing is held regarding the Urban Renewal District project list, it
would be beneficial, considering time constraints, to have all of our ducks in a row as to how we may proceed
once given the go ahead. Attached are the previous memos that have been given to the Council from myself
and Mike Absalonson.
RECOMMENDATION: The Council direct the staff to place this item on the next regularly scheduled
meeting for approval of "value engineering" within the design -bid -build project delivery system.
FISCAL EFFECTS: Unknown.
ALTERNATIVES: As suggested by the Council.
Respectfully
J submitted,
�n
Chris A. Kukulski
City Manager
Report compiled August 23, 2001
Page 1 of 1
REPORT TO:
FROM:
u
SUBJECT:
MEETING DATE: July 16, 2001
City of Kalispell
Honorable Mayor and City Council
Chris A. Kukulski, City Manager
Project Delivery Options
BACKGROUND: During the July 2 City Council meeting the issue ofdesign delivery options for the new
fire station was tabled. Since that time, I have two additional pieces of information to help us in making this
decision. 1", Glen is fairly certain that the City can NOT do a design -build project delivery option and fit
within current state law. 2"d, Randy Brodehl has had first hand experience utilizing "value engineering"
within the confines of the traditional design -bid -build contract.
This is a process that occurs after the contractor is chosen. The contractor can then request review of
different construction options that will decrease the cost of the project. The architect reviews the request
with the city representative and approves, modifies, or denies it. The contractor splits the savings with the
city at a percentage rate identified in the contract.
The project book typically specifies brands and type of installation for everything from siding to paper towel
dispensers. The contractor often finds an equal too or better option, for a lower price. When this happens,
most of the savings are passed on to the city, and the contractor is rewarded for quality frugality.
This is a wWwin option for all players and fits within Montana's laws regulating public project delivery
options. Therefore, I would recommend we utilize "value engineering" language within the traditional
design -bid -build project delivery option.
RECOMMENDATION: The Council direct the staff to place this item on the next regularly scheduled
meeting for approval of "value engineering" within the design -bid -build project delivery system.
FISCAL EFFECTS: Unknown.
.. ALTERNATIVES: As suggested by the Council.
Respectfully submitted,
C"
Chris A. Kukulski
City Manager
Report compiled July 12, 2001
Page 1 of 1
Architects
Design
Group
Number One Sunset Plaza • Kalispell, MT 59901
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 17th 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, which is to
pursue the design -bid -build scenario. The recommendation is based upon the following:
1. In review, the primary factors that would direct one to consider any form of delivery methodology:
A. Design -Bid -Build
Positive Factors
• Project scope, quality and time are understood by the owner 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.
FOR REVIEW
John W. Pecerson,A.I.A. Michael A. Absalons on, A.I.A. Glen D.Anacker,A.I.A. Frank], di Scefano.A.I,A.
B. Contractor/Construction Manager at Risk
Positive Factors
Capability to reduce overall time lines through fast -track project management.
Negative Factors
Not in an agency role with the owner, but a vendor to the owner.
• Under guaranteed maximum price or fixed price, project cope or quality is subject to revision
to meet contractor cost commitments. Quality and cost may be in question.
C. Design -Build
Positive Factors
• Capability to reduce overall time lines through fast -track project management.
Negative Factors
Under guaranteed maximum price or fixed price, project cope or quality is subject to revision
to meet design -builder cost commitments. Quality and cost may be in question.
Owner does not 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.
2. Time, or lack of time, is not an issue on this project. My assessment of the schedule leaves time for
the Design -Bid -Build sequence. Schedule does not seem to require the City to enter into alternative
forms of delivery that may increase complication or risk exposure.
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 services in the design -build scenario, both as a
project developer. Through these experiences, I feel my recommendation to pursue Design -Bid -Build is
given from a practical perspective and not just an academic view.
I attached contract forms provided by the American Institute of Architects for you further reference. They
are included because their review will enlighten you to the complications and nuances of each delivery
method in contractual language.
If you have questions regarding this information, please feel free to call
Sincerely,
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.
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.
Owner
Architect & Consultants
General Contractor
I Subcontractors I
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
Construction Manager
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 -track project
management
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 financing, or land acquisition where owner is not
financially capable
May provide build -leaseback
May build -operate -transfer as options
5
Project Delivery Methods
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 fortes 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 EALISPELL
NEW FIRE STATION & REMODELING
SCHEDULE
KALISPELL • MONTANA
ARCHITECTS DESIGN GROUP
ADO: 01-111 C
06/25/01
PROJECT SCHEDULE
ACTIVITY
BEGIN END PERIOD
2001
Begin Advertising for Architects
06/22/Ol
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 Station
06/11/02
NOTES
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