The Top 10 Ways
to Survive Design/Build
Prepared for CASH
By:
Thom Clark, San Marcos USD
Mark Kelley, Miller Brown & Dannis
Brian Torone, Torone Consulting
February 27, 2002
Introduction: The Panel
Q
Thom Clark: Introductions
¾San Marcos USD
Q
Mark Kelley
¾Miller Brown & Dannis
Q
Brian Torone, AIA
¾Torone Consulting
2
1
WHY DESIGN-BUILD?
3
Project Organization:
Design/Bid/Build
Construction
Manager
Owner
Contractor
Architect
Subcontractors
=Owner Team
4
2
Project Organization: Design-Build
Program
architect
Owner
Design-Build Entity
(Architect + Contractor)
Trade contractors
=Owner Team
5
HOW DESIGN-BUILD WILL
WORK UNDER THE NEW
STATUTE
6
3
AB 1402
History of K-12 Design-Build
Q New law effective as of 01/01/02
Q
¾Education Code sec. 17250.10 et seq.
Q
Projects that qualify:
¾$10,000,000 minimum total budget
¾New construction or modernization
7
What The Legislature Thinks
Q
“The Legislature ... finds that the costeffective benefits to the school districts are
achieved by shifting the liability and risk for
cost containment and project completion to
the design-build entity”
¾ Ed.Code sec. 17250.10
8
4
What The District Must Do
Evaluate and make findings re: merit of
Design-Build vs. traditional contracting
Q Prepare a program
Q
¾Specifications by an architect/engineer
Q
Prepare an RFP
¾Including factors that will be considered
¾Determine weight to be given to each
¾Determine whether or not to have
interviews
Q
Establish procedure for final selection
9
Selecting The Design-Build Entity
Program architect is disqualified
Q Base selection on either low bid or
objective “best value”, including:
Q
¾Price
¾Features and functions
¾Life-cycle costs
¾Plus technical expertise, misc.
Q
Make findings in writing re: basis of
selection
¾Including ranking and
scores
10
5
The Design-Build Entity
Q
Must provide bonds and insurance
¾Including errors and omissions coverage
Q
Any trade contractors not part of the
proposing entity must be selected after
semi-public bidding
¾Successful trade contractors protected by
subcontractors’ listing law
No deviation from District’s Program
Q Retention to be set by District
Q
11
District’s Responsibilities
Prepare labor compliance program
Q Retain architect/engineer to monitor
compliance (recommended)
Q Retain project inspector
Q Obtain DSA approval of plans and
specifications prior to construction
Q Follow state guidelines (to be issued by
July 2002)
Q Submit final report to Legislative
Analyst
Q
12
6
THE TOP 10
13
10. Understand the
Motivations of the
Parties
14
7
10. Understand the
Motivations of the Parties
Q The
Problem
¾The Program sets the standard
¾The economic interests of all parties are
shifted
District to Architect
9 Architect to Builder
9 Builder to District
9
¾Changes to the Program are disruptive -and expensive
15
10. Understand the
Motivations of the Parties
Q The
Solution
¾Make sure the Program really is what the
District wants -- all of the decision-makers
¾Acknowledge the roles and economic
interests of each party as part of deciding
whether or not to use Design-Build
¾Remember that the other parties will view
the District differently too
16
8
9. Select the Right
Owner’s Team
17
9. Select the Right
Owner’s Team
Q The
Problem
¾The most common complaint:
unsophisticated owners
¾Aside from the Program Architect,
District is on its own
¾Like traditional construction, no
substitute for adequate in-house staffing
and oversight -- i.e., $$$
18
9
9. Select the Right
Owner’s Team
Q The
Solution
¾Consider what outside consultants to
retain
9
9
Program Architect
Construction management services?
¾Realistically assess in-house capabilities
¾Assign roles specific to Design-Build
¾Who will report to the Board and public?
19
8. Draft Good
Contracts
20
10
8. Draft Good Contracts
Q The
Problem
¾District is handing over control much
earlier than on traditional projects
¾The less involvement and control the
owner has, the more important the
agreements become
¾Easy to forget the basics with new
contracting methodologies
21
8. Draft Good Contracts
Q The
Solution
¾Understand Design-Build
¾Focus on basics first:
9
9
9
Who is responsible for what
Money: what is the maximum the District can pay?
Program: what is the minimum the District can
accept?
¾Don’t necessarily rely on standardized
forms
22
11
7. Tie Scope to
Schedule and Budget
23
7. Tie the Scope
to Budget and Schedule
Q The
Problem
¾Everyone wants everything for nothing
¾Owner hasn’t established a project scope
or budget
¾Design/Build team doesn’t set limits
¾Owner sets unrealistic schedule
24
12
7. Tie the Scope
to Budget and Schedule
Q The
Solution
¾Everyone has realistic expectations
¾Owner understands and provides a
succinct project scope
¾Everyone shares in refining budget and
schedule
25
6. Document and Track
the Project
26
13
6. Document and
Track the Project
Q The
Problem
¾Stakeholders are not acting as a team
¾Lack of decision making documentation
¾Stakeholders do not know the delivery
method process/needs
27
6. Document and
Track the Project
Q The
Solution
¾Roles of participation are understood
¾Everyone participates in setting realistic
milestones
¾Accurate documentation to speed decision
making process
¾Strong management practices are used
28
14
5. Don’t Tinker
with the Design
29
5. Don’t Tinker with the Design
Q The
Problem
¾Team is working independently and not
at a team
¾Owner doesn’t make timely decisions
¾Design phase of project is never allowed
to end
30
15
5. Don’t Tinker with the Design
Q The
Solution
¾Owner needs to set well defined project
scope/criteria at beginning
¾Team efforts provide decisions everyone
lives with throughout the project
31
4. Don’t Assume
It’s the Best Alternative
32
16
4. Don’t Assume
It’s the Best Alternative
Q The
Problem
¾ The rep of design/build
¾ Well-publicized great projects
33
Bill 1402
for Projects Over $10M
The benefits of a design-build project delivery include an accelerated
completion, cost containment, reduction of construction complexity,
and reduced exposure to risk for the school district.
34
17
Design/Build Dogma
Q
Q
Q
It’s faster!
It’s cheaper!
It reduces disputes!
Design/Build Trends
Q
Q
Q
Q
Growth in D/B projects
More firms moving into D/B
It may be a little faster
and/or cheaper
More claims and disputes
18
4. Don’t Assume
It’s the Best Alternative
Q The
Solution
¾ Critically analyze whether it’s the right
delivery method for your project
¾ Evaluate the relative success of your
current delivery method
37
3. Pick the Right
Design/Builder
38
19
3. Pick the Right
Design/Builder
Q The
Problem
¾ Believing that D/B solves your problems
¾ Inexperienced Design/Builders
¾ Parties agreeing to bad contract terms
because of their desire to do D/B
39
3. Pick the Right
Design/Builder
Q The
Solution
¾Understand your capabilities
¾Know the capabilities of the
design/builder
¾Understand the other parties’ intentions
40
20
2. Understand
Design/Build
Principles
41
2. Understand
Design/Build Principles
Q The
Problem
¾One party conducts the job as
design/build, the other doesn’t
¾Failing to communicate the delivery
method to implementers
42
21
Common Attitudes of the Parties
When only the Design/Builder is familiar with Design/Build
Q
Design/Builder
Q
Owner
¾ Keep your hands out of my
design
¾ It’s design/build, so I can
change anything I want
¾ You’ve had your chance to
make changes, so keep off
¾ The contract says I have
design approval
¾ I’m building, don’t bother
me
¾ Our design changed, BUT IT’S
STILL WITHIN THE D/B
SCOPE!
43
Common Attitudes of the Parties
When only the Owner is familiar with Design/Build
Q
Design/Builder
Q
Owner
¾ Here’s a change order
because we had more
design costs than planned
¾ That’s your risk
¾ Here’s a change order for
changed quantities of
concrete
¾ That’s your risk
44
22
The Project Life Cycle
Must Still Be Followed
Strategic Stage
All Projects have these same stages.
Program Execution Plan
Conceptual Stage
The tool for implementation is shown in the box
Project Manual
Design
Construction Documents
Procurement
Contracts & P.O.’s
Construction
Project Construction
Turnover
Start-up & Commission
Project Life Cycle – Work Steps
Operations
Product Manufacturing
Strategic -Concept - Engineering -Procurement- Construction -Turnover -Operations
Owner ------- Designer ---------- Constructor ------------ Designer --------- Owner
45
2. Understand
Design/Build Principles
Q The
Solution
¾ Follow the same Project Life Cycle, but
acknowledge different overlaps
¾ Have all parties understand the project
delivery method and what it means
46
23
1. Define the Scope
Appropriately
47
Certainty Chart:
Traditional Project Delivery
Known
WHAT (Ends)
HOW (Means)
Certain Ends
Certain Means
Completed Project
Traditional Project Delivery:
The Simple Way!
M
h
ot
et
v
o
wn
no
k
e
q
dr
ua
t
an
Unknown
Unknown Ends
Unknown Means
Undefined Project
48
24
Certainty Chart:
Design/Build
Known
WHAT (Ends)
HOW (Means)
Certain Ends
Certain Means
Completed Project
Typical
Design/Build
Project
Unknown
Unknown Ends
Unknown Means
Undefined Project
49
1. Define the Scope
Appropriately
Q The
Problem
¾The agreement is silent
¾The agreement is ambiguous
¾Disputes over both performance and
prescriptive specs
50
25
1. Define the Scope
Appropriately
Q The
Solution
¾A good agreement
¾Invest in a Design Criteria Package
¾Consider Bridging
¾Don’t Use Design/Build
51
Conclusion
26
Overarching Principles of
Design/Build
Q
Q
The project should be matched to the
appropriate delivery method
Communication is crucial
¾ Contract
¾ Scope definition
Q
Your people need to be:
¾ Experienced in design/build
¾ Understanding of the design/builder’s mindset
53
Q
Thom Clark
The Panel
¾ Thom Clark is an architect, and is currently the Director of Facilities & Planning for the San
Marcos USD. Thom has worked on the design and construction of several schools as an
architect prior to working as a public employee. He has spoken at several workshops and
conferences regarding the Lease/Lease Back delivery method and has participated with one
school project using a modified design/build delivery method. He is currently working with the
California Department of Education on writing the guidelines for AB1402.
¾ Phone: 760.290.2650. Fax: 760.736.2214
¾ Email: tomclark@sdcoe.K12.ca.us
Q
Mark Kelley
¾ Mark Kelley is a partner with Miller, Brown & Dannis in San Francisco. Mr. Kelley specializes in
resolving contract and claim issues on public works projects such as schools, municipal
buildings, and public housing. He has extensive experience with contract formation, and all
forms of alternative dispute resolution. He frequently speaks on construction issues, including
giving training in construction dispute avoidance and resolution. He is a frequent speaker at the
CASH Annual Conference and at the American Institute of Architects’ National Conventions.
¾ Phone: 415-543-4111. Fax: 415-543-4384
¾ Email: mkelley@mbdlaw.com
Q
Brian Torone
¾ Brian Torone, AIA, is the founder and principal of Torone Consulting in Oakland, California. He
has analyzed claims on a wide variety of K-12 projects, university projects, high-rise office
buildings, and public buildings. He has participated in numerous mediations, arbitrations, and
trials as an expert on cost overruns, schedule delays, management issues, and technical issues.
Many of his cases have involved complex design/build issues.
¾ Phone: 510-451-9120. Fax: 510-663-9702
54
¾ Email: btorone@yahoo.com
27