An alternative project delivery method for fast-tracked municipal construction projects
implementing design/build projects with municipal agencies
Record rainfall events during the past three years resulted in the frequent flooding of businesses and homes in portions of the City of Milwaukee, Wis. In response, the Milwaukee Metropolitan Sewerage District (MMSD) made a commitment to fast track several flood control and relief sewer projects. Hydraulic analyses of tributary storm and sanitary sewers found that the flooding resulted from sanitary and storm sewer backups. To have the projects in place for the following year's spring rains, the MMSD had to design and construct four separate improvement projects worth more than $16 million within nine months.
Specifically, the proposed solution to the overall flooding required the completion of the following four projects:
• 30th Street Relief Sewer. This project consisted of approximately 4,300 feet of 60-inch diameter relief sewer constructed in a tunnel. Included were three major diversion structures that connect live sewers to the relief sewer.
• 35th Street Siphon. This siphon consisted of drop and riser structures, upstream and downstream junction structures, two 30-inch and one 24-inch siphon barrels, and a 160-foot-long rock tunnel.
• 32nd Street and Hampton Combined Sewer Overflow Pump Station Addition. This project included the construction of a 123 million-gallon per day (mgd) combined sewer overflow relief pump station containing four pumps, connecting sewers, stand-by power and discharge to a local stream.
• 35th Street Floodplain Lowering Detention Basins. This project involved lowering approximately 10 acres of the floodplain along Lincoln Creek by forming two detention basins. Construction work included extensive construction site erosion control, outlet piping and excavating and removing 70,000 cubic yards of material.
These projects were all part of the MMSD's long-term capital improvement plan; some were already in initial stages of design completion.
Evaluation of Project Delivery Options
After assessing the schedule required to complete the estimated $16 million in construction within nine months, the MMSD evaluated three separate project delivery methods. The first was its traditional design/bid/build method as most of the MMSD's work was completed through this process. In traditional methods, engineering consultants are hired based on a combination of qualifications and price. Construction is awarded to the lowest responsive, responsible bidder. The estimated schedule for the design/bid/build method to complete this project is shown in Exhibit 1. Based on typical times required to complete the final design, advertise and award a bid, obtain permits and mobilize into the field, it would have been nearly a year before construction could begin. The design/bid/build method was clearly not quick enough to meet the overall project schedule.
The MMSD then evaluated two alternative project delivery methods. The first was to undertake the project using a design/build method where an overall design/build team would be responsible for finalizing the designs and completing construction. The second approach, considered a hybrid approach, was to hire an overall design consultant to manage design completion of all four projects concurrently. This prime consultant would also help the MMSD select a contractor based on a combination of qualifications and pricing from the preliminary designs. Finally, the prime consultant would provide field coordination between the contractors on each of the four construction projects. In this case, the contractors would actually be contracted directly with the MMSD. Either of these methods had the potential to meet the overall construction completion schedule. However, each delivery method presented different challenges and advantages in terms of contracting and coordination. An evaluation summary of these two options is shown in Exhibit 2.
Based on the factors summarized in Exhibit 2, the MMSD decided to implement the hybrid approach. This approach enabled the MMSD to implement its typical design and construction contracts, achieve the greatest flexibility for overall coordination of the project, obtain competitive pricing from the contractors and realize the technical expertise of existing consultants during design completion and construction.
Key Aspects of the Hybrid Alternative
The MMSD's first action was to hire a firm to provide program management for the four projects. The selection criteria required responses from firms with adequate resources, previous experience with both the MMSD and design/build projects, and a history of delivering projects on schedule and budget. Concerned that ongoing projects not be delayed, the MMSD took into account the number and size of existing projects each firm being considered had. HNTB Corporation was selected as the program manager with design being performed in conjunction with CDM and Earthtech. A traditional request for proposal (RFP) process was not used and the consultants were on board with two days of the emergency declaration.
Similar criteria were used to select the contractors invited to submit bids. Approximately four contractors were selected to submit proposals for each project based on their history and ability to deliver MMSD projects on schedule and provide a quality product. Also considered was their expertise in the types of projects being constructed and whether they had adequate resources to do the work. Contractors were interviewed early in the design process to brief them on the projects and solicit input on timesaving measures. One contractor pointed out that the pump station would require several major pieces of equipment with long lead times. This input allowed the designer to prepare bid packages early in the design process to avoid delays due to late equipment delivery. This change also saved the MMSD money by avoiding the payment of a markup from the general contractor.
The MMSD also recognized the importance of involving regulatory and permitting agencies early in the process. The Wisconsin Department of Natural Resources (WDNR) requires the review and approval of plans and specifications prior to construction. The program manager was able to comply with this requirement on three of the four emergency projects. To meet the schedule, however, the pump station had to be bid with only 30% of the design complete. Recognizing the urgent nature of the project and the threat of continued flooding to public health, the WDNR dealt with the situation outside its normal regulatory requirements and allowed the project to proceed. Had this contact not been made early in the process, it is unlikely the project would have been completed on time.
The implementation of this hybrid approach can be assessed both in its ability to meet the schedule and to provide overall cost-effective construction.
While any of the three project delivery methods would have required about seven months of actual construction time to reach substantial completion, the time saved in this project was due to the concurrent completion of design, contractor selection, equipment procurement and permitting using the hybrid approach. These parallel tasks are shown in Exhibit 1. While designers were completing each of the four designs to a level of completion sufficient for cost estimating, the prime consultant developed a combined price- and qualifications-based contractor selection process. After the preliminary plans were completed, proposals were obtained from the selected contractors. While they were preparing their cost proposals, work continued on the designs.
At the same time, long-lead time equipment purchases were identified. Based on sizing criteria established in the preliminary design, bids were obtained for key pieces of equipment. Based on preliminary designs, the process of obtaining environmental permits was initiated before contractor selection. The hybrid approach allowed the project to progress from preliminary design to field mobilization in just three months.
The ability to achieve aggressive schedules must be balanced with the ability of public agencies to assure its rate payers that the work being done is at a competitive cost. Exhibit 3 shows the range of bids received and the actual construction costs for each of the four concurrent emergency projects.
As shown in Exhibit 3, base bids for each of the four projects were within a reasonable range. This suggested that the drawings and specifications, although preliminary, were still sufficient for the contractors to provide accurate pricing. The exhibit also shows the final cost after construction. In all three cases, final costs were within a small percent of the base bid. This provided further evidence that competitive and accurate bids were obtained from the contractors.
There are a variety of delivery methods public agencies can consider for the wide range of projects they're expected to complete. When time and schedule are of critical importance, the hybrid approach employed on the four emergency projects for the MMSD can prove to be the most efficient and effective way of delivering quality results in a creative and cost-effective manner that rate payers expect.
Proceedings of the Project Management Institute Annual Seminars & Symposium
November 1–10, 2001 • Nashville, Tenn., USA