HomeMy WebLinkAboutResolution 07-43 10/01/2007
Attachment 2
RESOLUTION NO. 07-43
A RESOLUTION AUTHORIZING AN EXEMPTION TO BIDDING REQUIREMENTS
PURSUANT TO ORS 279C.335(1) AND SPRINGFIELD PUBLIC CONTRACTING
ORDINANCE 2.71O(2)(V) FOR CONSTRUCTION OF THE SPRINGFIELD FIRE STATION
#16.
WHEREAS, The site for the replacement fire facility includes the present Fire Station #16 fire
and emergency medical operations, and
WHEREAS, Phasing of the construction work may need to occur since the existing fire and
emergency medical functions must remain in operation during the construction of the new
facility, and
WHEREAS the Springfield Common Council is the Contract Review Board for the City, and
WHEREAS, the Springfield Common Council has reviewed the applicable Findings of Fact,
Conclusions of Law and Construction Exemption Resolution for the "CM/GC Process for the City
of Springfield, prepared by City of Springfield staff, dated September 19, 2007, which is
attached as part of this Resolution, and
WHEREAS, the Springfield City Council has conducted a public hearing and considered
testimony and other evidence from the public on the subject of whether the use of the Contract
Manager/General Contractor ("CM/GC") project delivery method is in the public interest.
THE CITY OF SPRINGFIELD MAKES THE FOLLOWING FINDINGS:
1. The City of Springfield has determined that, in response to the
community's desires for increased public safety, a replacement Springfield Fire
Station #16 in Thurston is needed to adequately provide for the public's health,
safety and welfare; and
2. The ability to fund the Fire Station Project with available revenue requires
that value engineering be employed throughout the design and construction
processes to ensure that the building is completed within the target budget; and
3. The complex design and construction requirements, the site being
occupied by the current fire and emergency medical services functions, and the
ability for fire and emergency medical services to maintain ongoing operations,
and the possibility of phased construction, require close communication between
the City of Springfield, the facility architect, and the general contractor to ensure
that all project requirements are met in a coordinated, cost effective manner; and
4. The Construction Manager/General Contractor ("CM/GC") bidding and
project delivery method provides for the close communication between the City
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Attachment 2
of Springfield, the facility architect, and the general contractor necessary to
produce the coordinated, cost saving completion of the project; and
5. This exemption request complies with the criteria outlined III ORS
279C.335(2), and City of Springfield City Public Contract Rules Sections
2.703(1) and (13), in that it is unlikely that the exemption will encourage
favoritism or substantially diminish competition, as the selection process for the
CM/GC will be open to all interested, qualified proposers, in accordance with the
Attorney General's Model Public Contracting Rules, OAR Chapter 137, Division
49, and the City's Public Contracting rules. The subcontracting process will also
be open to all interested offerors, and subcontracts will generally be awarded to
the responsible firms submitting the lowest responsive offers; and
6. The CM/GC bidding method is widely used and recognized on projects of
this type as an effective means of controlling project costs and generally produces
greater value for the funds spent; and
7. The CM/GC project delivery system utilizes a competitive selection
process to select the project's designer and general contractor, thereby ensuring a
fair, competitive process to determine the most qualified project team; and
8. Based on the attached findings it is unlikely that exempting the design and
construction of the Springfield Fire Station # 16 from the public contracting law
competitive bidding process to the extent necessary to use the CM/GC method
will encourage favoritism in the awarding of public contracts or substantially
diminish competition in the award of this contract; and
9. Based on the attached findings, utilization of the CM/GC method will
result in substantial cost savings over the conventional design-bid-build method,
as the CM/GC process provides a guarantee of cost and schedule, which is not
provided by the use of a conventional construction manager coordinating phased
construction for multiple design-bid-build contracts, and because the project will
be constructed on the existing site, and fire and emergency medical services
operations must be maintained throughout construction.
RESOLUTION NO. 07-43
Attachment 2
NOW THEREFORE THE CITY OF SPRINGFIELD DOES RESOLVE AS FOLLOWS:
1. The Springfield Common Council, acting as the Public Contract Review Board for the
City, exempts the project(s) described herein from competitive bidding, and authorizes
the construction of the project(s) through the use of the construction manager/general
contractor (CM/GC) process, to be implemented according to the rules described in the
contract documents. The City Manager, or designee, is authorized to procure the services
of a qualified CM/GC firm. Construction services are authorized to begin as appropriate.
2. This Resolution shall take effect upon adoption by the Council and approval by the
Mayor.
ADOPTED by the Common Council of the City of Springfield this ~ day of October 2007, by
a vote of --.i.. for and ~ against. (2 absent)
APPROVED by the Mayor of the City of Springfield this...ls.t... day of October 2007.
Mayor
ATTEST:
~bWR-
REViEWtD & APPROVED
~~RM~ L~~
DATE:-=.[j 2'1/l{/
LEGAL COUNSEL
RESOLUTION NO. 07-43
Draft Findings of Fact, Conclusions of Law and
Construction Exemption Resolution for the CM/GC Process for
The City of Springfield
September 19, 2007
Hearing on this proposed exemption: At the meeting ofthe City Council of Springfield on Monday,
October 1,2007.
Findine:s of Fact
1. Proi ect Description. On October 1, 2007, the City Council of Springfield will be receiving a
recommendation from the project staff for construction of a replacement Springfield Fire
Station #16 (Thurston) using the CM/GC alternative construction method rather than the
conventional competitive design-bid-build process. A public hearing, as required by ORS
279C.335, will be conducted by the City Council on October 1,2007, for the purpose of
receiving public comment conceri1ing the draft findings. It is anticipated that the Council
will take action on the proposed public contracting exemption following the public hearing.
The project will be constructed at the site ofthe existing Fire Station #16. Phasing of the
construction work may need to occur to maintain current fire and medical response
operations on the existing site and/or adjacent parcel during the construction of the new
facility. '
The project is to be funded by a combination of loans and City reserves.
In April 2007 the City issued an RFP for the procurement of architecture/engineering
services for this project. The AlE firm of Paul Bentley Architect has been selected and is
under contract with the City.
2. Construction methodology. It is in the best interest of the City to use the construction
manager/general contractor (CM/GC) form of contracting for the above described work.
Under this form of contracting, the CM/GC firm is hired at the beginning of the project to
assist with design considerations, administrative coordination, scheduling, budget estimating,
constructability review, and value engineering. The CM/GC provides these management
services, as well as management ofthe construction, for a negotiated fixed fee. In addition,
the CM/GC will provide, during the design process, a guaranteed maximum price (GMP) for
the full value of the construction, supported by a full performance and payment bond.
Subject to parameters described within the contract, "subcontractable" work will be
competitively bid to the CM/GC firm, with the oversight of the City.
The CM/GC process is being proposed for five major reasons: (1) To assist in evaluating the
potential building configurations. The CM/GC will be expected to provide constructability
and cost assessment for each option; (2) To provide for a coordinated and safe utilization of
the phasing of construction, if necessary, to maintain current operations at the site while the
new facilities are being constrUcted in close proximity; (3) To provide construction expertise
during design to ensure the most cost effective construction to match the City's scope. The
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expertise of the contractor will help to ensure the optimal allocation of resources. The total
project cost will be kept within budget through the GMP, for which there is a contractual
agreement before the project goes to construction. The CM/GC's participation in the design
process serves to minimize the actual cost, which is generally below the GMP; (4) Should
time be a factor, the project construction can be phased, so that initial work can begin while
the fmal elements of the project are still in design.
3. Favoritism will not be encouraged and competition will not be diminished. The CM/GC will
be selected through a competitive and-formally advertised RFP process in accordance with a
primarily qualifications-based selection format, with identified selection criteria. The
"subcontractable" work (approximately 85%-90% of the project) will be placed out to
competitive procurement by the CM/GC, who, in turn, will contract with the lowest
responsible offerors. The provisions of the Attorney General's Model Public Contracting
rules in OAR Chapter 137 Division 49 as well as the City's Public Contracting rules will be
used to hire the CM/GC firm.
4. The use ofthe CM/GC process will result in substantial cost savings to the City.
Costly change orders should be reduced. The CM/GC, working early on design and
coordination, can help to minimize change orders.
The GMP is established during the design process. The CM/GC will obtain a complete
understanding of the City's needs, the architect's design intent, the specific peculiarities of
this project, and the scope of the project (including operational needs) by participating in the
design process. With the benefit of this knowledge, as well as an experiential data base for
similar fire station or other emergency services facility construction costs, the CM/GC will
be able to provide an early contractual guarantee of the total cost. This is before the detailed
design considerations are fully worked out.
Conversely, under the traditional design-bid-build method, bids are developed by contractors
without the benefit of the bidders participating in the design. At the close of the bid period,
as well as at the end of the design period, there will be no assurance that the project cost will
be within the project budget. .
Involving the contractor throughout the design phase generally results in the need for fewer
change orders. For example, for projects with a GMP, owners typically need to carry only ~
of the construction contingency (10%) that would normally be carried on a comparable
design-bid-build project. Consequently, it is anticipated that 5% ( or more) of the initial
construction cost will be included within the bids -rather than being added through change
orders. As a general rule, change orders are more expensive to the owner than work that is
included within the original bids.
Using the CM/GC process, change orq.ers to the scope of work also cost the owner less, in
that the CM/GC only charges its negotiated fee percentage (typically in the 5% range) as
opposed to the industry standard of 10%.
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Due to the CM/GC's active construction management role, and early involvement in the
project, many CM/GC jobs finish with an actual cost less than the GMP. Should there be
such savings, which often occurs, savings would be made available to the City for the
procurement of alternates, or, alternatively, savings could be split with the CM/GC and the
City. The latter provides an incentive for the CM/GC to finish the project under the GMP. It
is not unrealistic to have savings between 1-2% of the GMP to as high as 10%.
5. Before undertaking the use of the CM/GC process. the public agency should assure itself that
it has the appropriate expertise to adequately manage the process.
The City Project Manager has previous experience in the management ofCM/GC projects in
both public sector and private sector projects. Currently, the City's Justice Center Project is
being constructed using a CM/GC contract. The procurement solicitation for the CM/GC
firm will identify selection criteria from each firm's prior CM/GC experience. The City
Attorney is experienced in the development ofCM/GC contracts. Additionally, the. architect
under contract with the City is experienced in CM/GC work.
There are many construction firms in Oregon, and several locally, which have had experience
with CM/GC public agency work. For example, the most recent additions to the Lane County
Jail, the new Federal Justice Center, and the County Juvenile Justice Complex were all
performed using the CM/GC process. The regional Metropolitan Wastewater Management
Commission is currently reviewing proposals from CM/GC firms for one of the construction
projects.
6. ORS 279C.335. requires that. in addition to the general findings that it is unlikely that the
exemption will result in encouraging favoritism or substantially diminishing competition. and
that the exemption will result in substantial cost savings. it is also necessary to have specific
findings addressing the following criteria under ORS 279C.330.
a. Operation. budget and financial data. Cost estimating considerations, as noted above, will
be best addressed through use of the CM/GC process.
b. Public benefits. It is generally agreed that public safety is one of the most important public
goals. Maximizing the value received and ensuring the highest quality construction best
serves the community. In addition, current fire and medical response operations must be
maintained from the site and/or adjacent parcel during construction of the new facility. Using
the CM/GC process will allow the contractor full understanding of the needs of the Fire Life
Safety Department. The City can benefit from the contractor's expertise and experience to
maintain uninterrupted emergency services.
c. Value engineering. It is anticipated that the CM/GC firm will bring expertise to the table
that will facilitate better and more cost-efficient building methodologies.
d. Specialized expertise required. Expertise in the construction of essential facilities and in
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the phasing of construction in order to minimize impact on on-going operations will
contribute to overall cost savings and effectiveness.
e. Public safety. As described above under public benefits.
f. Market conditions. The current volatile economic climate in building materials and the
current construction activity in the region makes cost an unknown until bid. More economic
certainty can be brought into the process using the GMP established under the CM/GC
process.
g. Technical complexity. As described above under public benefits.
h. Funding sources. Not applicable.
Conclusions of Law
This exemption request complies with the criteria outlined in ORS 279C.335(2):
1. It is unlikely that the exemption will encourage favoritism or substantially diminish
competition.
The selection process for the CM/GC will be open to all interested, qualified proposers, in
accordance with the Attorney General's Model Public Contracting Rules, OAR Chapter 137,
Division 49, and the City's Public Contracting rules. The subcontracting process will also be
open to all interested offerors, and subcontracts will generally be awarded to the responsible
firms submitting the lowest responsive offers.
2. The exemption will result in substantial cost savings to the City.
As noted above, use of the CM/GC method should result in substantial savings over the
conventional design-bid-build method. The types of cost savings are identified in the
findings. I The CM/GC process provides a guarantee of cost and schedule, which is not
provided by the use of a conventional construction manager coordinating phased construction
for multiple design-bid-build contracts.
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