HomeMy WebLinkAboutMINUTES - 10262004 - D2 TO: BOARD OF SUPERVISORS -,-s._..-z�•,�� Contra
_--.
FROM: JOHN SWEETEN, COUNTY ADMINISTRATOR •� 3 _ �* Costa
p,
ATE: OCTOBER 20 2004
c-
vr�
„r Countyo
SUBJECT: BUSINESS PRACTICE IMPROVEMENTS IN
THE DEVELOPMENT AND DELIVERY OF COUNTY CAPITAL PROJECTS d2
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
Alpha/CPM ML tb
RECOMMENDATIONS:
1. ACKNOWLEDGE that the County Administrator's Office and the General Services
Department have examined the management and administration of County capital
projects with the goals of minimizing contractor performance problems and improving
the overall efficiency of capital project delivery.
2. AUTHORIZE the General Services Director to implement procedures to evaluate the
performance qualifications of contractors, as permitted by State law, prior to awarding
construction contracts.
3. DIRECT the County Administrator to pursue with the help of the County's legislative
advocate, and with input from the local building construction industry and labor
organizations, legislation that would lower the existing threshold in Public Contract
Code Section 20133 for negotiated "best value" design-build construction projects
from $20 million to $1 million.
4. AUTHORIZE the General Services Director, when appropriate, to employ alternative
project delivery methods such as negotiated "best value" design-build and
"construction manager at-risk" to shorten project delivery timeframes, provide
improved cost control, better allocate risk, and enhance project collaboration.
CONTINUED ON ATTACHMENT: X YES SIGNATUR .
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMEND TI OF BOA COMMITTEE
APPROVE OTHER
SIGNATURE(S):
--------------------- --------------------------------------------------_--_-_--_-____-____-------------_-_-------------------------------------------------------------------ACTION OF
BOARD ON APPROVE AS RECOMMENDED X E)THE -
VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE
AND CORRECT COPY OF AN ACTION TAKEN
UNANIMOUS(ABSENT AND ENTERED ON THE MINUTES OF THE
BOARD OF SUPERVISORS ON THE DATE
AYES: NOES: SHOWN.
ABSENT: ABSTAIN:
ATTESTED
MEDIA CONTACT:BARTON J.GILBERT(313-7100) JOHN SW STEN,CLERK OF THE BOARD OF
SUPERVISORS AND COUNTY ADMINISTRATOR
CC: General Services Department
Capital Projects Management Division
Accounting ,
CPM File: Alpha/CPM
County Administrator's Office
County Counsel
Auditor Controller
n A
BUSINESS PRACTICE IMPROVEMENTS IN October 26, 2004
THE DEVELOPMENT AND DELIVERY OF COUNTY
CAPITAL PROJECTS
FINANCIAL IMPACT
The recommended business practice changes can be implemented with minimal expense.
While cost savings are difficult to quantify, it is anticipated that the business practice changes
and implementation of alternative project delivery methods will improve the management and
administration of capital projects.
BACKGROUND
The County Administrator's Office and the General Services Department have examined the
County's capital project management practices with two goals in mind:
I
1. Minimize contractor performance problems, and;
2. Improve administrative practices to shorten project delivery time and reduce project cost.
Changes to the County's capital project management practices designed to further these two
goals are addressed below.
Avoidance of Contractor Non-Performance
To improve the selection of responsible contractors capable of fulfilling their contractual
obligations on construction projects, staff recommends the County strengthen its procedures for
evaluating the performance capabilities and track record of contractors prior to selection.
Procedures for evaluating the performance capabilities of potential contractors can be applied
either before or after bids for a project are received. Such procedures will add some additional
time and cost to capital projects, and therefore should be used primarily on larger and more
complex projects where the benefits are likely to outweigh the costs. For all projects with
construction cost projected to exceed $1 million, staff recommend that pre-qualification of
contractors take place before bids are received to ensure a pool of qualified contractors bidding
on the job. For smaller projects, with construction cost estimated as $1 million or less, use of
contractor evaluation methods either before or after receipt of bids would be at the discretion of
the General Services Director based on the uniqueness and complexity of the project.
Evaluating Contractors Before Bids are Received
In 1999, the California Legislature enacted a law that authorizes cities, counties and special
districts to require licensed contractors to pre-qualify for public construction projects before
bidding. Public Contract Code Section 20101 establishes the following procedures for pre-
qualification:
1. Use of a standardized questionnaire and financial statement in a form specified by the
public entity;
2. Adoption and application of a uniform system of rating bidders on objective criteria on the
basis of the completed questionnaires and financial statements; and
3. Creation of an appeal procedure by which a contractor that is denied pre-qualification
may seek a reversal of that determination.
The 1999 State law also required the Department of Industrial Relations (DIR}to draft a
standardized questionnaire and to develop model guidelines for pre-qualifying bidders on public
agency construction projects. These guidelines were released in October 2000. The General
Services Department proposes to implement pre-qualification procedures consistent with the
DIR guidelines.
Evaluating Contractors After Bids are Received
Contractor performance qualifications can also be evaluated after bids are received but before
the contract is awarded. This process is called post-bid assessment. In this process, bidders
2
BUSINESS PRACTICE IMPROVEMENTS IN October 26, 2004
THE DEVELOPMENT AND DELIVERY OF COUNTY
CAPITAL PROJECTS
are required to submit a questionnaire at the time bids are due. The questionnaire is developed -
by the County and used to evaluate a bidder's quality and capacity to perform the required work.
If a bidder is deemed "non-responsible," the bid is rejected, even though it may be the low
monetary bid. The accepted bid must meet both criteria of"responsible" and price.
Enhancing Efficient Project Delivery
The General Services Department continually strives to improve the efficiency of capital project
delivery. Over the past two years, the Department has implemented the Job Order Contract
{JOC) Program as a way to reduce the time and cost of delivering smaller capital projects.
Together with the County Administrator's Office, the General Services Department has reviewed
its practices for implementing larger capital projects and seeks the Board's direction to consider
alternative approaches for delivering future capital projects, as appropriate, and to advocate for
legislative changes to increase the ability of counties to utilize such approaches.
Alternative Project Delivery Methods
Design/Bid/Build {DBB) is the traditional project delivery method for public works construction
and is the project delivery method used by the County for most construction projects. This
method involves the following three steps:
• The County contracts with a design firm to provide detailed plans and specifications
describing the project;
• Those documents are then provided to prospective bidders to develop and submit a price
for the work;
• The construction contract is awarded to the lowest responsive responsible bidder to build
the project.
The DBB method is a linear process and requires more time than either the "design/build" or
"construction manager at-risk" approaches discussed below. The "design/build" and
"construction manager at-risk" project delivery methods are alternative project delivery methods
that have been used for many years by the private sector and have been increasingly used in
the public sector.
Design/Build
Design/build is a project delivery method wherein a single entity is selected to perform both
design and construction. Public Contract Code Section 20133 authorizes Contra Costa and six
other counties to use the design-build method for projects in excess of$10 million. The
design/build entity is selected through a low bid approach. For projects exceeding $20 million,
these same counties are allowed to use a negotiated "best value" design/build approach, which
considers multiple factors such as qualifications, experience, past performance, and price.
The design/build project delivery method may provide the County with faster project completion
and improved collaboration between the designer and construction team, which in turn may
reduce change orders, claims, and litigation. The design/build selection process can also be
crafted to incorporate existing County policies and procedures relative to outreach and project
labor agreements.
The County could benefit from a negotiated "best value" design/build approach. Given that the
majority of the County's capital projects cost far less than the existing $20 million threshold for
use of negotiated "best value," it is recommended that the County Administrator be authorized
to pursue —with the help of the County's legislative advocate and input from the local building
industry and labor organizations — legislation to lower the existing threshold for negotiated "best
value" design/build construction projects from $20 million to $1 million.
Construction Manager At-Risk
"Construction manager at-risk" is another alternative project delivery method where the County
would concurrently contract with a design firm and construction management firm on a fixed-fee
basis. Using this approach, the construction manager participates throughout the design
process, oversees the bidding of subcontractor work, and has financial responsibility for
3
BUSINESS PRACTICE IMPROVEMENTS IN October 26, 2004
THE DEVELOPMENT AND DELIVERY OF COUNTY
CAPITAL PROJECTS
delivering the project for an agreed-upon cost. A Guaranteed Maximum Price approach can be
used, with the construction manager at risk if the project goes over budget.
The construction manager is selected based on qualifications and is made a part of a
collaborative team from the beginning of the project. The construction manager provides pre-
construction services including estimating, scheduling, value engineering and constructability
reviews, and managing trade contractor bidding and contracts. All subcontractor construction
work is competitively bid and the construction manager coordinates the work of the
subcontractors during construction.
With the "construction manager at-risk" approach, a project can be fast-tracked, similar to
design/build. The "construction manager at-risk" model provides more certainty up-front
regarding schedule and costs and has been used successfully by public agencies in California
including San Mateo County, Santa Clara County, the City of Oakland, and Redwood City. It is
also commonly used by the public sector in the States of Washington, Oregon, Utah, Arizona
and Colorado.
As with design/build, the "construction manager at-risk" approach can be customized to
incorporate existing County policy and procedures related to outreach and project labor
agreements.
4