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HomeMy WebLinkAboutItem 15 Consideration of Exemption from the City of Springfield Contract Review Board Rules to Allow Use of the Construction Manager/General Contractor (CM/GC) Project Delilvery System for Addition/Remodel of the Springfield Fire Station #3 and to Combin Meeting Date: Meeting Type: Department: Staff Contact: Staff Phone No: Estimated Time: December 3, 2007 Regular sessio~ City Manager's Office Carole Knape x 3672 10 minutes AGENDA ITEM SUMMARY SP R I N G FIE L D CITY COUNCIL ITEM TITLE: ACTION REQUESTED: CONSIDERATION OF EXEMPTION FROM THE CITY OF SPRINGFIELD CONTRACT REVIEW BOARD RULES TO ALLOW USE. OF THE CONSTRUCTION MANAGER/GENERAL CONTRACTOR (CM/GC) PROJECT DELIVERY SYSTEM FOR ADDITION/REMODEL OF THE SPRINGFIELD FIRE STATION #3 AND TO COMBINE THE FIRE STATION #3 PROJECT WITH THE FIRE STATION #16 PROJECT. P 20547; P 20534 Conduct a Public Hearing and Approve/Not Approve the following Resolution: A RESOLUTION AUTHORIZING AN EXEMPTION TO BIDDING REQUIREMENTS PURSUANT TO ORS 279C.335(2) AND SPRINGFIELD PUBLIC CONTRACTING ORDINANCE 2.710(2)(d) FOR ADDITION/REMODEL OF THE SPRINGFIELD FIRE STATION #3 AND TO COMBINE THE FIRE STATION #3 PROJECT WITH THE FIRE STATION #16 PROJECT. ISSUE . STATEMENT: ATTACHMENTS DISCUSSION/ FINANCIAL IMPACT: Oregon Revised Statutes (ORS) allow for alternative methods of contracting when the project presents unique construction requirements and when there are budget lImitations, schedule constraints and a complex project scope. The Fire Station #3 project may benefit from combining this project with the Thurston Fire Station #16 project and the use of the CM/GC strategy because it meets these characteristics. In order to utilize this strategy, Council must conduct a public hearing, consider testimony, and adopt a resolution exempting the project from competitive bidding. Attachment 1 - Council Briefing Memo Attachment 2 - Adopting Resolution and Findings The Fire Station #3 project was initiated in 2004 as a result of an overall review of the Fire and Life Safety facilities. At that time it was recognized that, at a minimum, the facility must be improved to provide individual sleeping rooms and restrooms in orderto meet requirem'ents of gender equity. Funding for this project was provided through a combination of G .0. Bond funds and Bancroft funds in the FY 04-05 budget. A total of $285,000 is available for construction of these improvements. Staff proposes to utilize a Construction Manager/General Contractor (CM/GC) method of contracting for the Fire Station #3 project by including this work in the contract for the construction of the Thurston Fire Station #16 project. In order to use the CM/GC strategy, the project must meet certain requirements, including: 1) using the CM/GC method will likely result in substantial cost savings, and 2) it is unlikely that the exemption will encourage favoritism or substantially diminish competition. The attached fmdings and conclusions of law detail how the project meets these requirements. Subject: November 27,2007 . Gino Grimaldi, City Manager Carole Knapel Fire Station #3 Remodel and Renovation - Contracting Strategy COUNCIL BRIEFING MEMORANDUM Date: To: From: ISSUE: Oregon Revised Statutes allows for alternative methods of contracting when a project presents unique construction requirements and when there are budget limitations, schedule constraints and a complex project scope. The Fire Station #3 project presents these issues and staff therefore recommends the use of a Construction Manager/General Contractor construction strategy. In order to implement this strategy, staff recommends combining the Fire Station #3 project (sleeping room/restroom addition and kitchen remodel) with the Fire Station # 16 project (new replacement station) and using the selected Fir~ Station # 16 CM/GC for both sites. DISCUSSION: Oregon Revised Statues provide for alternative methods of contracting when the project presents unique requirements. One of the alternative methods is Construction Manager/General Contractor (CM/GC). Under this method, the project owner selects a CM/GC during the design phase of the project. The CM/GC is selected using specific criteria based on the project's requirements. Criteria for a public safety project includes factors such as experience in working on publicly-funded projects, prior CM/GC experience of proposed staff, prior record of on-time, on-budget project completion, experience in phasing of construction work, and the proposed fee for pre-construction and construction phased services. An additional criteria is the knowledge of the local contracting environment. Once a CM/GC is selected, the fIrm actively participates in the design process by providing cost estimates, constructability review and phasing options. This work supports the project architect and the project owner in delivering a project which can most effectively address cost and schedule constraints. As the project design nears completion, the CM/GC provides a Guaranteed Maximum Price (GMP) for the construction of the project. In the case of the Fire Station #3 Project, the design has been completed by the project architect. The design provides for the addition of sleeping rooms. If funds are available, the project provides for an add alternate which would modify the existing kitchen area, In order to determine how best to include all of this work within the limited construction budget, a cost estimate and value engineering can be completed by the CM/GC prior to the start of construction. The use of a CM/GC contracting strategy is most useful in certain specific situations. The Construction Engineering Management Program at Oregon State University has recommended that specific factors be considered when a jurisdiction is considering the use of a CM/GC contract. Those factors include such items as the complexity of the project, the project's schedule constraints, the need for construction phasing, project budget limitations and projects that may benefit from value engineering. For the Fire Station #3 project several of the recommended factors are relevant; · The project has a need for an expedited schedule. The sleeping room addition and kitchen remodel project have been in the design phase for several years. The current station was designed for a 3 person crew and now accommodates a 5 person crew plus a battalion chief. Five fire fighters share a small dorm room and restroom facilities with no provision for gender separation. The existing kitchen facilities were also designed for a 3 person crew and now accommodate 6 on-shift personnel plus the training staff located at this station. Attachment 1 Page 1 of 2 . The project budget is also constrained. The existing budget was established several years ago. The City needs to develop a functional facility, but the project must be completed in the most cost effective manner possible. In order to accomplish this goal, the project will benefit from an initial value-engineering review by the CM/GC and on-going value engineering discussions as the construction progresses. . The project will require phasing of some of the construction work. The station currently has one active engine crew, one active ambulance crew, and the crew Battalion Chief. The Fire Life Safety Training Department is also located in this station which includes a Battalion Chief, administrative assistant, classroom training, and outside drill space. Fire operations and training will have to continue uninterrupted during all phases. This phasing will result in a complex construction schedule. Using the CM/GC contracting strategy, the City has selected a CM/GC for the Thurston Fire Station #16 Project through a competitive RFP process. The staffwill be recommending that Council authorize the staff to negotiate a CM/GC contract with selected firm. If the Council authorizes the use of a CM/GC contract for the Fire Station #3 project, this project can be included in the contract which provides for the construction of the Thurston Fire Station #16 project. When the Guaranteed Maximum Price has been set on each project, the CM/GC fIrm will be required to bid out all work using a competitive bid process. All subcontracts will be awarded to the lowest responsible bidders, thus ensuring that the City receives the maximum value. ACTION REQUESTED: Staff requests that the Council consider an exemption from the City of Springfield Contract Review Board rules in order to allow the use of a Construction Manager/General Contractor contracting strategy. Staff further recommends that in order to implement this strategy, the Council authorize the inclusion of the Fire Station #3 Remodel Project with the Fire Station #16 Project. Attachment 1 Page 2 of 2 Draft Findings of Fact, Conclusions of Law and Construction Exemption Resolution for the CM/GC Process for The City of Springfield I November 26, 2007 , . I Hearing on this proposed exemption: At the meeting of the City Council of Springfield on Monday, , I December 3,2007. .. ' I I Findine:s of Fact , 1. Proiect Description. On December 3, 2007, the City Council of Springfield will be receiving a recommendation from the project staff for addition of sleeping rooms/restrooms and remodel of the kitchen at Springfield Fire Station #3 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 conduct~d by the City Council on December 3, 2007, for the purpose of receiving public corruhent concerning 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 of the existing Fire Station #3. Phasing of the construction work may need to occur to maintain current fire and medical response operations on the existing site during the construction of the ne\}' addition (sleeping rooms . and single user restrooms) and remodel of the kitchen. The project is to be funded by existing budget allocations. The AlE firm of Paul Bentley Architect has been selected and is under contract with the City. I 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 of the construction, for a negotiated fixed fee. In addition, prior to the start of construction, the CM/GC will provide a g'uaranteed 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, "suDcontractable" work will be competitively bid to the CM/GC firm, with the oversight of the ,city. I I I The CM/GC process is being proposed for five major reasons: (1) To assist in evaluating the project building configurations. The CM/GC will be expected to provide constructability and cost assessment for each component of the work; (2) To provid~ for a coordinated and safe utilization of the phasing of construction, if necessary, to maintain current operations at the I site while the new facilities are being constructed; (3 ) To provide ,construction expertise prior. to the start of construction to ensure the most cost effective consiruction to match the City's scope and budget. The expertise of the contractor will help to edsure the optimal allocation 1 Attachment 2 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 prior to start of construction will serve to maximize the available resources; (4) Should time be a factor, the project construction can be phased, so that initial work can begin immediately while minimizing the impact of construction on ongoing operations. 3. Favoritism will not be encouraged and competition will not be diminished. A CM/GC fIrm has been selected for the Thurston Fire Station #16 Project 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 tht? 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 will review the design documents and complete a constructability review to identify options for the most cost effective materials and methods thus minimizing change orders. The GMP is established prior to construction. 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 carefully reviewing the design. 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. Prior to starting construction, there will be an opportunity to identify any design details which might be modifIed in order to complete the project in the most cost effective manner on an accelerated schedule. Conversely, under the traditional design-bid-build method, bids are developed by contractors without the benefIt of the contractor's participation. At the close of the bid period there will be no assurance that the project cost will be within the project budget. . Involving the contractor 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 orders 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 2 Attachment 2 opposed to the industry standard of 10%. I 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 avJilable to the City for the procurement of alternates, or, alternatively, savings could be spli~ 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 ofthe CM/GC process. the public agency should assure itself that it has the appropriate expertise to adequately manage the process. I I The City Project Manager has previous experience in the manage~ent 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 proc1;lfement ,solicitation for the proposed CM/GC firm for the Thurston Fire Station # 16 Project identified $election criteria from each firm's prior CM/dc experience. The City Attorney is experie~ded in the development of CM/GC contracts. Additionally, the architect under contract wi~ the City is experienced in CM/GC work. 6. ORS 279C.335. requires that. in addition to the general finding~ 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.: I a. Operation. budget and financial data. Cost estimating considerations, as noted above, will be best addressed through use of the CMlGC process. b. Public benefits. It is generally agreed that public safety is one Qf the most important public goals. Maximizing the value received and ensuring the highes~ quality construction best serves the community. In addition, current fire and medical reSponse operations must be maintained from the site during construction of the new addition kd remodel of the kitchen. I 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 contractorr s expertise and experience to maintain uninterrupted emergency services. : i I C. Value engineering. It is anticipated that the CM/GC firm will pring expertise to the table that will facilitate better and more cost-efficient building methodologies. I d. Specialized expertise required. Expertise in the construction df essential facilities and in 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. 3 Attachment 2 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 was 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 [mdings. 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. 4 Attachment 2 RESOLUTION NO. I '.1 I . i . A RESOLUTION AUTHORIZING AN EXEMPTION TO BIDDING REQUIREMENTS . I PURSUANT TO ORS 279C.335(2) AND SPRINGFIELD PUBLIC CONTRACTING . I ORDINANCE 2.710(2)( d) FOR ADDITIONIREMODEL OF THE SPRINGFIELD FIRE I STATION #3 AND TO COMBINE THE FIRE STATION #3 PROJEOr WITH THE FIRE I STATION #16 PROJECT. .j WHEREAS, The ~ite for the addition toa.n d remodel o. fthe fire facilitylinclUdeS the existing Fire Station #3 fIre and emergency medical operations, and' . i WHEREAS, Phasing of the construction work may need to occur smce the existing fire and . emergency medical functions must remain in operation during the addit~on and remodel, and . I .. I WHEREAS the Springfield Common Council is the Contract Review Board for the City, and WHEREAS, the Springfield Common Council has reviewed theapp~icable 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 November 1~, 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 onthe subject of whether the use of the Contract Manager/General Contractor ("CM/GC") project delivery method is in $e public interest. i . THE CITY OF SPRINGFIELD MAKES THE FOLLOWING FINDINGS: I 1. The City of Springfield has determined that, in response to the community's desires for increased public safety, modifications to the existing facility are required at Fire Station #3 to adequately provide housing for firefighter staff thereby increasing public's health, safety and welfare; and I . , 2. The ability to fund the FireStation Project with availabl~ revenue requires that value engineering be employed prior to and during the const;ruction processes to ensure that the addition and remodel is completed within the t'fget budget; and .3. . The complex design and construction requirements, I 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 co~tractor to ensUre. that all project requirements are met in a coordinated, cost effectiye manner; and . I 4. The Construction Manager/General Contractor ("CM/G~") bidding and project delivery method provides for the close communication between the City Attachment 2 or Springfield, the facility architect, and the general contractor necessary to produce the coordinated, cost saving completion ofthe project; and.. 5.' .. The efficient and effective management of the Fire Station #3 remodel and renovation project will be enhanced if this project is combined with the management of the Thurston Fire Station #16 project. Currently, assigned City project management staff, firefighter staff, and the project architect work on both projects. If the CM/GC is assigned the Fire Station #3 project, the entire project tealn can work most effectively. . .6. This exemption request complies with the criteria outlined in 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. was 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 for both projects will also be open to all interested offerors, and subcontracts .will generally be awarded to the responsible firms submitting the lowest responsive offers; and 7. 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 8~ 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 9. Based on the attached fmdings it is unlikely that exempting the design and construction of the Springfield Fire Station #3 addition and remodel from the . public contracting law competitive bidding process to the extent necessary to use ,. . theCM/GC method will encourage favoritism in the awarding of public contracts . or substantially diminish competition in the award of this contract; and 10. Based on the attached fmdiiigs, utilization of the CM/GCmethod 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. Attachment'2 NOW THEREFORE THE CITY OF SPRINGFIELD DOES RESOLVE AS FOLLOWS: . . I ." . . . . - , .. ,. . .. . . .1.. .; ,: .. . The Springfield Common Council, acting as the Public'Contract Re~iew 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 m'anagerlgeneral contractor. . 1 .. (CM/GC) process, to be implemented according to the rules described ip. the contract documents. The City Manager, or designee, is authorized to procure the services or a qualified CM/GC firm and to modify the scope of CM/GC services for Fire Station #16 to iridude the Fire Station #3 project. Construction services are authorized to begin as appropriate.: . . I , . , Thisresolution shall take effect upon adoption by the Council and appr9val by the Mayor. . . . I . ADOPTED by the Common Council of the City of Springfield this_iday of December 2007, by a vote of ----'- for and _ against. . I .1 1 APPROVED by the Mayor of the City of Springfield this -'---- day of~ecember 2007. , I. 1 Mayor f,P/iEWEfJ & flPPROVED . AS TO. . FORM \ .- '_ ~~.~-~ DATE:,..,..\" ~\~ OFFICE OF b . ATTORNEY ATTEST: I Attachment 2