alternative delivery for large programs ......design-build delivery $, t, q •contract...
TRANSCRIPT
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FARUK OKSUZ, P.E.
ALTERNATIVE DELIVERY FOR LARGE PROGRAMS & PROJECTS
September 12-15, 2016
Vice President & Infrastructure Systems Director
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Design-Build delivery is often the “norm” for global construction and tunneling industry.
• Introduction - What is “Alternative Delivery?”
• Key performance indicators and the “Delivery Spectrum”
• Drivers for large tunneling programs
• Trends and cases in the North American and Global tunneling
OUTLINE
Owners, engineers, contractors, and operators are all vested stakeholders
and beneficiaries of successful Project Delivery
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COMMONLY USED ALTERNATIVE DELIVERY OPTIONS • Design-Build (lowest lump sum bid) and
Progressive Design-Build
• Third Party Program Management and Construction Management (PM/CM)
• Construction Management at Risk (CMAR)
• Design-Build-Operate-Finance (DBOF)
• Design-Build-Operate/Maintain-Transfer (DBOT)
• Public Private Partnership (PPP)
• Alliance Contracting
• Others
Alternative delivery is intended to bridge gap between the Owner and Contractor during procurement.
McCook Tunnel Project above was awarded based on “best-value” selection.
Owners want flexibility - custom variations such as best value selection, are also used as alternative procurement though projects are delivered using traditional design-bid-build delivery.
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September 12, 2016
ACKNOWLEDGE GROUND RULES
• Safety is never compromised
• Dichotomy of quality vs. price will prevail
• Schedule certainty (speed of delivery may be accelerated)
• Inherit risks do not transfer or go away, and must be properly addressed
• Market drives the price
Basic Principles of Contracting are not
Alternatives.
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September 12, 2016
CONTRACTING STRATEGY MUST RESULT IN BEST DELIVERY THROUGHOUT ALL PROJECT PHASES
COMMISSIONING & OPERATION
CONSTRUCTION
PREDESIGN
PLANNING
Project Progression / Realization
Rela
tive
Impa
ct o
n Pr
ojec
t O
utco
me
& S
ucce
ss
FINAL DESIGN
Northwest Side Tunnel APWA 2006
Thornton Transitional Reservoir APWA 2016
AWARD-WINNING PROJECTS
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Once qualified, Bid Price should drive the selection for alternative delivery.
• Safe, constructible and operable systems
• Risks are well managed
• Meet the Owner’s primary delivery expectations: • Quality • Cost effective and within budget • On time • Regulatory compliant • Neighborhood friendly
• Cost savings through • Innovative ideas • Flexibilities in means and methods • Accelerated delivery
• Systems reliability, redundancy, guarantees
PROJECT DELIVERY MUST SATISFY INDUSTRY’S KEY PERFORMANCE INDICATORS - KPIs
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PROJECT DELIVERY SPECTRUM September 12, 2016
Traditional Delivery Alternative Delivery
DBB CMAR Progr. DB DB DBOF/T Alliance PM/CM
Schedule/Cost Savings
Tolerance for Risk
Owner Control
Innovation
EPCM
?
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WHEN TO DECIDE BEST DELIVERY OPTION – PROJECT GATEWAYS
Stage 1 – Initiation
Engineering Deliverables
Contract Packages &
Delivery Options
Stage 2 - Feasibility
Front End Engineering
Performance Specifications
Stage 3 - Execution
Design / Design- Build
Stage 4 - Operations
Startup & Turnover
1
3
2
1 Gateway 1 – Program Management Strategy and Implementation
Stage 2 - Feasibility • Facilities Layout • Investigations • P&I D • Alternatives Definition • Alternatives Selection • FEED • Performance Specs • Cost Estimates • Schedule • Value Analysis, Constructability Review • Preliminary Engineering • Guidance Documents and SOPs for Engineering and Construction • Market Conditions •Project Sanction Prior to Execution and Delivery Decisions
Stage 1- Initiation • Program Objectives • Program Organization • Program Controls (budget, schedule, documentation, information technology, communications) • Safety • Stakeholders • Risk Management • Quality • Environmental Management • Sustainability • Regulatory •Technical Integrity Panel • Legal • Financial • Operations • Contract Packaging Strategy • Delivery Options
Stage 3 – Execution • Design • Design and Design-Build Contracts • Construction • CM and RE Roles • Contractor VE Proposals • Chartering • Award / Penalty Criteria • Performance Management
Stage 4 – Operations • Substantial Completion • Testing and Startups • Commissioning • O&M Manuals • Training • Warranty Transfers • Facilities Acceptance and Turnover • Project Records • Project Awards
Construction ►
►
►
2 Gateway 2 – Program Components, Delivery, Design Liability, Procurement and Execution Strategy, Safety, Budget, Schedule, Operations, and Quality Criteria and Performance Metrics are Established.
3 Gateway 3 – Compliant Facilities Construction Using Various Procurement Methods, Assurances to Meet Design and Operations Intent and Criteria, Implement Project Controls and Documentation
Owner Determines Gateways - Critical Project Milestone Accomplishments
Project Completion and Close Out
2016 2017
►
DELIVERY OPTIONS BECOMES CLEAR
September 12, 2016
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Alternative delivery drivers overlap with KPIs for successful execution
• Single Point Accountability
• Accelerated (speed of) Delivery
• Transfer of Risks and Fewer Change Orders
• Leveraging innovations in construction industry and flexibility in the means and methods
• Lower Price (due to shorter schedule)
• Resources (or lack thereof) including funding, project professionals, etc.
DRIVERS FOR LARGE DESIGN-BUILD PROGRAMS & PROJECTS
Water Design-Build Council Handbook waterdesignbuild.com
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Is there a design-build in the cards?
• Front-End (Preliminary) Engineering • Operational criteria (regulatory compliant) • Site engineering (geology, geotech, utilities,
hydraulics, etc.) • Assessment of risks • Permitting & easements • Neighborhood friendly • Scope of work (quantities)
• DB Procurement Contract • Safety, quality, cost & schedule • Minimum requirements, reviews, approvals • Bid form and payment terms (lump sum and
negotiated or unit priced items) • Legal framework • Must achieve competitive bids
DESIGN-BUILD DELIVERY
$, T, Q
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• Contract specifications must include owner’s typical details, state and local codes (building, fire, health department, etc.)
• References and compliance with applicable industry standards (ASTM, NASSCO, AWWA, AASHTO, DOTs, etc.)
• Completion, payment, and acceptance terms
• Warranty transfers
DB CONTRACTS MUST BE COMPLIANT WITH CODES, INDUSTRY STANDARDS AND OWNER’S SPECIFICATIONS
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Partnering, disputes resolution, and contract contingencies and allowances are essential for successful implementation
• Lump Sum • Safety • Project management / administration • Regulatory compliance • General mobilization and crew setup • General geologic/ground conditions
established • Length, size, type of pipeline for water
tunnels • Early design effort and reports • Typical traffic control, bypass, and
permits • Typical disposal, site cleanup, &
restoration
DESIGN-BUILD CONTRACT SETUP FOR TUNNEL CONSTRUCTION
• Negotiated (based on contract unit prices established or change orders) • Additional inspections and
investigations • Additional easements • Dealing with unknown or
concealed conditions • Utility conflicts resolution • Access and schedule restrictions
due to operations of existing systems
• Community concerns (working hours, noise, dust control, etc.)
• Commissioning, Operations and Maintenance (O&M) Requirements
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• Set aside traditional processes
• Use a stringent prequalification process to limit proposers to 5 or less
• Provide full access to the site and data to qualified bidders
• Conduct a balanced evaluation
• Ask for reasonable submission requirements
• Develop succinct criteria specifications
• Limit early design in the RFP (or allow time and money for design)
• Conduct separate evaluation of cost and quality issues
• Use lump sum contracts, if competitive price proposal process
SUCCESSFUL PROCUREMENT TIPS FOR DESIGN-BUILD
Owners must have the opportunity to review designs and accept/reject completed work
Pain/gain provisions in the Contract help align objectives of the parties
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September 12, 2016
OTHER GOOD IDEAS ! • Early advertisement, contractor information meetings,
widen early competition
• Receptive to new technologies and innovations
• Good bid forms, measurement and payment terms
• Develop consistent design documents (plans, specs, geotechnical data and baseline reports, etc.)
• Owner-furnished materials, disposal sites, in-kind services
• Stiffer penalties / better incentives
• Raise the bar on quality and cost control
• Allow contractors to take “calculated” risks with incentives
• Consider Early Contractor Involvement process
• Consider Program Management/Construction Management services for large/multiple contracts
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RISK MANAGEMENT PROCESS
Legend:
Workshops with Risk Management Committee (RMC)
Independent Value Engineering
Independent Contractor Review at 75% Design
Start
w
OWNER/AGENCY REGULATORY COMPLIANCE / QA ASSURANCES
RISK REGISTER ESTABLISHED & CONTINOUSLY UPDATED
Finish
Risk Mngt Team Engaged
GBR Experts Engaged
W
Constructability & Bidding Review
Alternative Delivery Options – Design-Build
GBR-Bidding
W
Contractor Prequalification
GBR-Construction
Contract Documents
Disputes Resolution Board (DRB) Engaged in Inspections, Documentation, Records
CR
TM 95 - 100% DESIGN 50 % DESIGN BASIS OF DESIGN CONSTRUCTION
VE
VE
CR
W
September 12, 2016
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TRENDS & CASES
SUCCESSES AND OPPORTUNITIES FOR IMPROVEMENT
16
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OVER 65 ALTERNATIVE DELIVERY PROJECTS IN NORTH AMERICA IN THE PAST 10 YEARS
1
4
7
8
32
16
22
19
10
2
3
5
6
9
11
14 15
17 20
23
28
31
12 27
41
40 39
24
26
35
38 37 25
21
18
36
13
29 30
33 34
Detroit Water Works Park II WTP
Milwaukee, WI— Howard Avenue WTP Ozone Improvements
DBIA Award Winner
DBIA Award Winner
Longmont, CO — Nelson-Flanders WTP
Bakersfield, CA — NE Bakersfield WTP
San Bernardino Valley — Foothill Pump Station
DBIA Award Winner
Phoenix, AZ — Lake Pleasant WTP
San Bernardino Valley — Central Feeder Groundwater Banking/Conjunctive Use
Louisville, KY — Morris Forman WWTP
DBIA Award Winner
September 12, 2016
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JOLLYVILLE TRANSMISSION MAIN (TUNNEL)
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Jollyville Tunnel & Transmission Main (WTP 4) — City of Austin, Texas
Key Project Drivers: ▪ Schedule ▪ Cost Certainty ▪ Community & Environmental
CMAR Delivery Method for $ 508M Program
2 Separate Design and 7 Separate Construction Contracts (GMPs) Raw Water Intake Intake Tunnel & Pump
Station 50 MGD Water Treatment
Plant Jollyville Transmission Main
PROJECT OVERVIEW
Period of Services: 2009 - 2014 Tunnel Cost : $90M
September 12, 2016
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September 12, 2016
Successes (What Went Well) Single Point of Contact for City Underground Components Completed
within 1 to 3% of Original Bid Price (favorable geology)
Opportunities for Improvement Schedule Not Being Met Contract Less than Clear on who owns the
Schedule Risk Overlapping Tasks During Construction
Jollyville Tunnel & Transmission Main (WTP 4) — City of Austin, Texas
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MIDDLE FORK SURGE SHAFT REHABILITATION
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September 12, 2016
Middle Fork Surge Shaft Rehabilitation — Placer County Water Agency, Placer County, California
Key Project Driver: ▪ Cannot dewater shaft, need to perform
repairs in the “wet”
DB Delivery Method Contractor selected on
qualifications Repair of a cracked surge shaft
lining (10 ft diameter x 600 ft deep)
Installation of an 8 ft diameter steel lining over the full depth of the shaft and grouted in place
PROJECT OVERVIEW
Period of Services: 2005 - 2007 Total Project Value: $ 35 M
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Middle Fork Surge Shaft Rehabilitation Placer County Water Agency
Aerial view of shaft site
Contractor developed a custom frame to hold and lower 40-ft long pipe segments
September 12, 2016
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September 12, 2016
Successes (What Went Well) Allowed “innovations” by the Contractor
(quick connect mechanical couplings below water)
Alignment of goals between parties Communication among key project
participants Verification test program proved certainty
of means and methods reducing risks and allowing for cost savings to be incorporated into design
Construction completed below initial target price
Middle Fork Surge Shaft Rehabilitation — Placer County Water Agency, Placer County, California
Innovation and use of mechanical pipe couplings saved valuable time for divers to install underwater
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TWIN FALLS HYDROPOWER PLANT ALLIANCE CONTRACT
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September 12, 2016
Twin Falls Hydropower Plant — WE Energies, Wisconsin
Project Drivers: Aging Infrastructure
Power generation efficiency Environmental
Alliance contract with shared risk/reward on total capital cost. B&V / CR Meyer / WE Energies
New powerhouse includes 80 foot deep rock excavation
Headwater and tailrace cofferdams
New spillway Remove existing powerhouse
PROJECT OVERVIEW
Period of Services: 2012 – 2016 Total Project Value: $70 million
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Twin Falls What is Working
Safety – No OSHA recordable Quality – No NCRs Partnering with Owner and
Contractor Cost is trending below budget
with contingency increasing On schedule with sense of
urgency across team
What Could be Improved Always can do better on safety Nothing identified at recent
executive review meeting
September 12, 2016
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LOWER BAKER HYDROELECTRIC POWERHOUSE
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September 12, 2016
Lower Baker Hydroelectric Unit 4 Powerhouse — Puget Sound Energy, Washington
Key Project Drivers: ▪ Schedule (Tax Credits) ▪ Cost Certainty ▪ Risks in Underground Construction
Design Build (Best Value) New Below Grade Powerhouse
30 MW Francis turbine generator
12 ft diameter, 1,000 ft long steel lined pressure tunnel
108 in. butterfly valve 60 in. Howell Bunger bypass
valve Unit and facility control systems
PROJECT OVERVIEW
Period of Services: Oct 2011 – June 2013 Total Project Value: $ 70 M
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September 12, 2016
Lower Baker Hydroelectric Unit 4 Powerhouse — Puget Sound Energy, Washington
Rotor Installation
Powerhouse Excavation
Tunnel Excavation
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Successes (What Went Well) Owner procured equipment assured PSE
got what they wanted. Project completed 3 months ahead of
schedule (tax credits received) Strong safety performance No lost time safety incidents Change orders – no surprises
Lower Baker Hydroelectric Unit 4 Powerhouse — Puget Sound Energy, Washington
Completed Unit 4 Powerhouse
September 12, 2016
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FIVE (5) DESIGN-BUILD CONTRACTS FOR TUNNELS
SINGAPORE PUB DEEP TUNNEL SEWERAGE SYSTEM (DTSS) PHASE 2
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DEEP TUNNEL SEWERAGE SYSTEM (DTSS)
Kranji WRP & NEWater Factory
Changi WRP & NEWater Factory
DTSS Phase 2 DTSS Phase 1
Tuas WRP & NEWater Factory
DTSS Phase 1 (2000 – 2008) Cost: S$3.4 billion • 48km tunnels (3.3m to 6m ID) • 60km link sewers (0.3m to 3m ID) • 176 MGD plant at Changi • 5km outfall (3m ID)
DE
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DTSS PHASE 2
• 50km sewer tunnels by TBM (3m to 6m ID) • 50km sewers by pipe-jacking (0.3m to 3m ID) • 176MGD plant at Tuas with 25MGD NEWater capacity
Industrial Tunnel
South Tunnel
Tunnel and Link Sewers
• Sized adequately for the future • Design for Maintenance and Resilience
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DTSS PHASE 2 – SOUTH TUNNEL
• 50km of tunneling works delivered via DB contracts • Tunnel ID ranges from 3m to 6m • Includes construction of hydraulic structures & air management
facilities
Industrial Tunnel
South Tunnel
Northwest Link Sewer Tunnel
Southern Region Link Sewer Tunnel
Pasir Panjang Link Sewer Tunnel
Holland Link Sewer Tunnel
South Spur
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Tuas WRP
Conveyance System Key Features: • Corrosion Protection • Tunnel Monitoring (fiber optic) • Air Management • Tunnel Isolation GATES • Tunnel Inspections • Integrated Data Management System (IDMS)
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LINK SEWERS - PIPE JACKING INSTALLATIONS
• 50 km of pipe-jacking works delivered via DBB contracts • Pipe ID ranges from 0.3m to 3m
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HDPE Lining
Inner Secondary Lining (MIC* Resistant Concrete)
Concrete Segmental Tunnel (Primary Lining)
*MIC – Microbiological Induced Corrosion
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Sewer Tunnel Cross Section - General
Proposed system is expected to withstand the corrosive sewer
environment over its design life of 100 years.
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Ranges from ~10 to 20 ft (3 to 6m) dia.
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GATE PANEL ASSEMBLY
ISOMETRIC VIEW SHAFT STRUCTURE
(BASE) ISOLATION GATE SHAFT SECTION
Gate Module Rollers
Gate System
Tunnel
Link Sewer
Modular Gate System
Working Platform
Gate System (Assembled & Lowered)
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Tunnel Isolation with Roller Gates
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Fiber Optic Strain Monitoring for Structural Integrity
• Longitudinal installation • Fiber optic cables cast directly into segments during fabrication
FO Cable 1 FO Cable 2
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DTSS PHASE 2 CONTRACTS & IMPLEMENTATION TIMELINE
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2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Link Sewers
Tunnels
Tuas WRP
IWMF
Construction Consultant Tender
Detailed Design
Construction Consultant Tender
Detailed Design
Design & Construction D&B Tender
Design & Construction Pre-Q, EPC Contractor(s) & call EPC Tender(s)
Pre-Q, Owner’s Engineer (OE) & call OE Tender
DTSS PHASE 2 & IWMF OVERALL TIMELINE D
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IWMF – Integrated Waste Management Facility
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Batch Contract Tunnel Length (km)
Tunnel Internal Dia. (m)
Indicative Tender Calling
Completion
1 T-07 12 3.5 - 6.0 4Q 2016 4Q 2023
1 T-08 10 3.3 - 6.0 4Q 2016 3Q 2022
1 T-09 8 6.0 4Q 2016 4Q 2022
2 T-10 8 3.5 - 6.0 1Q 2017 2Q 2023
2 T-11 12 3.0 - 3.3 1Q 2017 1Q 2024
FIVE (5) TUNNEL CONTRACT PACKAGES D
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LINK SEWERS CONTRACT PACKAGING
Area 5
Area 4
Area 3
Area 2
Area 1
Detailed Design Consultants from 1Q 2017
Area Length (km)
Indicative Tender Calling Construction
1 9 Feb-Aug’18 Aug’18-Aug’24
2 11 Feb-Aug’18 Aug’18-Aug’24
3 13 Feb-Aug’18 Aug’18-Jan’24
4 9 Feb-Aug’18 Aug’18-Jan’24
5 6 Feb-Aug’18 Aug’18-Jan’24
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CLOSING WITH PROGRESSIVE DESIGN-BUILD
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PROGRESSIVE DESIGN BUILD Advantages
• One contract = one point of responsibility
• Good delivery method for retrofit projects
• Promotes Collaboration with Owner
• 100% of the equipment and construction are competitively bid
• Early involvement of construction professionals, O&M, and value engineering occurs throughout the project
• Shared incentives if GMP pricing model is adopted
• Fast track schedule
• Owner has off-ramp prior to GMP Establishment
Multiple Construction and Equipment Packages
Owner
DB Contractor
Disadvantage Not applicable for
completely designed projects
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TRADITIONAL DESIGN-BID-BUILD
DESIGN-BUILD
PROGRESSIVE DESIGN-BUILD
PROGRESSIVE DESIGN-BUILD OFFERS SAVINGS IN TIME AND COST
Management Plan Design Define DB Scope Proposal Procurement, Construction, Startup & Commissioning, Performance Testing
GMP Established
Lump Sum Established
Cost Established
Long Lead procurement
SAVE TIME, SAVE MONEY
Design Construction
Design
Construction
Design Construction
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Design-Bid-Build CMAR Design-Build Progressive DB
“Collaboration”
WHO IS AT RISK? Owner Owner Alt Delivery Contractor
Alt Delivery Contractor
WHO IS RESPONSIBLE for performance? Owner Owner Alt Delivery
Contractor Alt Delivery Contractor
WHO IS RESPONSIBLE for Management of Change Orders ?
Owner Owner Alt Delivery Contractor
Alt Delivery Contractor
Competitive YES YES YES YES
Market Based YES YES YES YES
Transparent NO YES NO YES
Defendable YES YES YES YES
Collaborative YES/NO YES NO YES
PROGRESSIVE DB ALLOWS “BEST FOR PROJECT” DECISIONS WITH SAME RISK MANAGEMENT LEVEL AS DB
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QUESTIONS & ANSWERS THANK YOU. Faruk Oksuz, P.E. [email protected]