TM 17 Bellingham Delivery Method

Technical Memorandum
701 Pike Street, Suite 1200

Seattle, WA 98101
T: 206.624.0100
Prepared for: City of Bellingham Public Works Department

Project Title: Post Point Resource Recovery Plant Biosolids Project Phase 3 – Facility Plan and Nitrogen
Removal Impact Study and Phase 4 – Preliminary Design
Project No.: 154154.330.331
Technical Memorandum No. 17

Subject: Post Point Resource Recovery Plant Biosolids Project Delivery Method Evaluation
Date: October 18, 2021
To: Steven Bradshaw, City of Bellingham, Superintendent of Plants
From: Mike Thorstenson, Brown and Caldwell, Project Manager
Prepared by:
Mike Thorstenson, Brown and Caldwell, Senior Director
Reviewed by:
Tadd Giesbrecht, Carollo Engineers, Inc., Vice President
Limitations:
This is a draft memorandum and is not intended to be a final representation of the work done or recommendations made by Brown and Caldwell. It
should not be relied upon; consult the final report.
This document was prepared solely for the City of Bellingham in accordance with professional standards at the time the services were performed
and in accordance with the contract between City of Bellingham and Brown and Caldwell dated November 18, 2019. This document is governed by
the specific scope of work authorized by the City of Bellingham; it is not intended to be relied upon by any other party except for regulatory authorities
contemplated by the scope of work. We have relied on information or instructions provided by the City of Bellingham and other parties and, unless
otherwise expressly indicated, have made no independent investigation as to the validity, completeness, or accuracy of such information.
City of Bellingham Biosolids Facility Planning Report: TM 17 – Post Point Resource Recovery Plant Delivery Method Evaluation
Table of Contents
List of Figures ............................................................................................................................................................ ii
Summary ................................................................................................................................................................... 1
Section 1: Introduction ............................................................................................................................................. 1
Section 2: Delivery Method Options Considered .................................................................................................... 2
2.1 Methods Evaluated ............................................................................................................................................ 2
2.1.1 Advantages and Disadvantages of Each Method ............................................................................ 2
2.1.2 Design-Bid-Build................................................................................................................................. 3
2.2 General Contractor/Construction Manager (GC/CM) ...................................................................................... 5
2.3 Design Build ....................................................................................................................................................... 6
1.3.1 Progressive Design-Build (PDB) ........................................................................................................... 6
1.3.2 Fixed Price Design-Build (FPDB) .......................................................................................................... 7
Section 3: Workshops and Outcomes ..................................................................................................................... 8
3.1 Workshop 1 – Project Drivers (March 24, 2021) ............................................................................................ 9
3.2 Workshop 2 - Implementing Collaborative Delivery (March 31, 2021) ........................................................ 10
3.3 Workshop 3 – Risk, Detailed Scoring, and Preliminary Recommendations (May 4, 2021) ....................... 12
Section 3: Post-Workshop Discussions and Recommendations ......................................................................... 14
Attachment A: Delivery Model Analysis Workshop 2: Comfort Zones ................................................................... 1
Attachment B: Delivery Model Analysis Workshop 3: Risk and Delivery .............................................................. 1
List of Figures
Figure 1. Potential Project Delivery Methods Spectrum Considered for the City of Bellingham ......................... 3
Figure 2. Workshop 2 Agenda ............................................................................................................................... 10
Figure 3. Comfort Zone Assessment ..................................................................................................................... 11
Figure 4. Workshop 3 Agenda ............................................................................................................................... 13
Figure 5. Program Schedule Assumed for Delivery Model Analyses ................................................................... 13
Figure 6. Detailed Assessment of Delivery Methods (as revised during Workshop 3) ...................................... 14
ii
DRAFT for review purposes only. Use of contents on this sheet is subject to the limitations specified at the beginning of this document.
Bellingham Delivery Method TM17_DRAFT
City of Bellingham Biosolids Facility Planning Report: TM 17 – Post Point Resource Recovery Plant Biosolids Project Delivery Method
Evaluation
Summary
This Technical Memorandum (TM) summarizes the activities and Brown and Caldwell’s (BC)
recommendations to date for the Post Point Resource Recovery Biosolids Project (Project) delivery method
evaluation for onsite facilities.
This TM is based on information obtained via three workshops held between City of Bellingham (City) staff
and BC, supported with materials provided by the Water Design-Build Council (WDBC) and the Design-Build
Institute of America (DBIA). The three workshops were held:
• Workshop 1 – Project Drivers (March 24, 2021)
• Workshop 2 – Implementing Collaborative Delivery (March 31, 2021)
• Workshop 3 – Risk, Detailed Scoring, and Preliminary Recommendations (May 4, 2021)
At the outset of Workshop 1, the City asked BC to consider both General Contractor/Construction Manager
(GC/CM, also referred to as Construction Management at Risk [CMAR]) and Design-Build (DB) delivery
methods as an alternative to Design-Bid Build (DBB) delivery, although DBB was discussed as a baseline for
context.
In summary, both GC/CM and PDB implementations would serve the City well. However, the City’s past
positive experience with GC/CM and the certainty of applying proven treatment process design points to a
GC/CM delivery methodology for the Project.
Section 1: Introduction
The City is in the planning process to evaluate options for long-term biosolids management and beneficial
use opportunities for wastewater solids recovered from Post Point.
The Project planning process has followed a phased approach, including Phases 1, 2, and 3, to consider all
possible alternatives and narrow down options to a preferred biosolids and energy management alternative.
The City’s phased planning and project implementation process includes Phase 1 – Preferred Conceptual
Alternative Selection, Phase 2 – Final Alternative Selection, Phase 3 – Biosolids Facility Plan and Nitrogen
Removal Impact Study, Phase 4 – Preliminary Design, Phase 5 – Detailed Design, and Phase 6 –
Construction.
Phase 1 included the initial identification of all potential biosolids and energy alternatives, screening to
identify viable alternatives for further evaluation, and the selection of a preferred conceptual alternative. In
February 2019, the results of Phase 1 were summarized in Technical Memorandum (TM) No. 1 (TM 1) –
Preferred Conceptual Alternative Selection. Phase 2 further developed the preferred conceptual alternative
and evaluated specific processes for biosolids treatment, biogas end uses, and other processes. In
May 2019, TM 2 – Final Alternative Selection summarized the results of Project planning Phase 2. Phase 3
further refines the selected alternative technical requirements and documents the planning effort within the
Biosolids Facility Planning Report (Biosolids Facility Plan) and is an update to the City’s existing,
comprehensive 2011 Wastewater Facility Planning Report (Carollo, 2011).
This TM No.17 (TM 17) describes the delivery method evaluation for the onsite portion of the Project and
provides the path forward for a delivery approach. Off-site facilities delivery methods are not within the scope
of TM 17.
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Section 2: Delivery Method Options Considered

2.1 Methods Evaluated
BC reviewed potential procurement and delivery methods with the City in order to make recommendations
regarding the most appropriate delivery method for the Post Point on-site project components.
Delivery methods discussed and evaluated for the Project:
• Traditional Design-Bid-Build (DBB)
• General Contractor/Construction Manager (GC/CM)
(also commonly referred to as Construction Management At-Risk [CMAR])
• Design-Build (DB) options
− Progressive Design-Build (PDB)
− Fixed-Price Design-Build (FPDB)
In support of the above, this TM summarizes the benefits and risks of each delivery approach and applies
several evaluation criteria based on the City’s Project objectives to support in the ultimate recommendation
of delivery method(s) for the Project.
A key consideration in assessing the collaborative delivery spectrum is permissibility under applicable state
and local statutes. In Washington, per state and local laws (RCW 39.10 – Alternative Public Works
Contracting Procedures), collaborative delivery methods are permissible for public agencies delivering
projects greater than $2 million and that meet other criteria. An approval process applies for obtaining State
authorization for using a delivery method other than DBB. While specifics of this approval process are
beyond the scope of this TM-17, the delivery methods evaluated are all permissible in the State of
Washington.
2.1.1 Advantages and Disadvantages of Each Method

The procurement methods and their resulting delivery models available to the City take numerous forms,
ranging from standard DBB delivery to turn-key approaches with significant risk transfer, including several
variants of Design-Build (DB). GC/CM and DB methods (collectively referred to as “collaborative delivery”
methods) were the approaches primarily considered by the City during the workshops, in the context of a
general discussion that included the full spectrum of delivery options, including fixed-price Design-Build as a
baseline reference.
The spectrum of available options considered for the City is illustrated in Figure 1.
The project delivery and procurement methods, as shown in Figure 1, have generally evolved from the
traditional DBB approach, which is considered the “baseline” (i.e., most commonly used) by public entities.
In recent decades, various collaborative delivery methodologies have emerged as viable alternatives to
traditional delivery. These alternatives to DBB seek to better allocate risk and responsibility, save time, and
support selection methodologies beyond low-bid capital price. The potential improvement to traditional
delivery is supported by re-defined contractual relationships. These relationships are shown in Figure 1 via
two forms:
• Formal Contractual Relationships (illustrated with the puzzle piece, and as amended with the dotted-line
puzzle piece) indicate firm contractual agreements executed between the given entities, and
• Embedded Relationships (illustrated with the dotted green line) represent the collaborative connections
required, but not formally contracted, to make the given model a success.
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Figure 1. Potential Project Delivery Methods Spectrum Considered for the City of Bellingham
(Graphics credit: Water and Wastewater Design-Build Handbook, 5th Edition,
permission for use under terms of Brown and Caldwell’s WDBC Membership)
Each of the traditional and collaborative project delivery methods has its own attributes that generally differ
in terms of allocation of risks and responsibilities, scheduling and schedule certainty, ownership,
performance guarantees, and procurement complexity. In practice, the City may opt for a combination of
delivery methods across various components of its Project. While multiple construction packages were
discussed, this analysis is focused on one construction package for the Project. If the City elects to
implement the program with separate project packages, a separate delivery method consideration should be
given to each package.
2.1.2 Design-Bid-Build
Design-Bid-Build (DBB) has historically been the most common approach to development of public
infrastructure projects. The DBB process has also been used extensively by the private sector to procure new
facilities. DBB is considered the “baseline” contract delivery model.
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A typical DBB project involves the Owner engaging one or more engineering firms to develop detailed plans
and specifications and to assist with obtaining local, state, and federal approvals for the project, as required.
The Owner then uses the detailed plans and specifications package as part of a tender package to obtain
bids from Contractors. The Contractor selected through the bidding process is subsequently engaged to
construct the facility in accordance with plans and specifications provided by the Owner for its as-bid price
and schedule. The as-bid price may be lump sum for the entire project, lump sum for specific bid items, or
unit price. Typically, the Contractor is paid monthly progress payments, and the Owner applies holdbacks on
payments in accordance with governing state or local law.
A typical DBB project schedule consists of completing the design and permitting prior to construction
bidding. This sequence often results in a longer overall delivery schedule, but it also reduces exposing the
Owner to capital and schedule risks resulting from permitting delays or unexpected changes in permit
conditions.
Roles in a DBB project are normally very clearly defined. Project definition, site
acquisition, and project integration is retained by the City. Responsibility for
design performed to meet the Standard of Care lies with the Engineer.
Construction and scheduling risks lie with the Contractor, and the Contractor is
responsible for building the project as defined in the plans and specifications.
Operations and maintenance risk rests with the City. However, operators often
do not – and Contractors do not – have significant input into the design, which
can contribute to change orders. Change orders and claims during construction
are common, and the requirement for some re-design during construction
exists, typically at the Owner’s cost. In addition, project performance (i.e.,
achieving specified performance outcomes) and/or lifecycle responsibility and
risk are not typically transferable using DBB delivery. This is because the Contractor is only responsible for
constructing the project as designed, not for meeting intended performance.
Advantages to Bellingham Disadvantages to Bellingham

• Well understood and time-tested process and • Linear process takes time
procedures • Designer/Contractor collaboration limited to evaluation of bid alternatives and change order
• Provides significant control by Owner over design negotiations, requests for information, and performance verification during construction
as Owner involved through final design • Initially-designed solution may not reflect best potential construction technologies or
• Ability to select consultants by qualifications and Contractor’s best practices
cost in the traditional manner. Professional firms • Relies on Engineer’s estimates until bids are received from Contractors
limited to Standard of Care for design
• Bids are subject to design omissions and resulting change orders
• Contactor typically selected on low bid. In some
• No opportunity to select Contractor primarily on qualifications and past performance in lieu of
circumstances, Owners have the ability to
low bid price
consider past performance via a pre-
qualifications process, but the ultimate selection • Separate contracts for design and construction creates multiple points of contact for Owner,
is based on low bid. Construction bids are made and who must then take responsibility for resolving competing interests
to full plans and specifications • Does not inherently allow performance risk transfer - design obligation is traditional
• Full construction price known at bid time “Standard of Care,” and construction obligation is to build according to the specified contract
documents
• Fully accepted and viable under applicable
procurement statutes • Not readily conducive to integration of a lifecycle evaluation component or a performance-
based operations commitment
Note that this summary of advantages and disadvantages represents a general industry consensus, but local practice may differ, and project-specific
exceptions are common.
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2.2 General Contractor/Construction Manager (GC/CM)

General Contractor/Construction Manager (GC/CM) is also considered a traditional delivery model, albeit a
value-added approach where an intentional schedule overlap is created between the Engineer and the
Contractor, allowing the Contractor to bring construction insight to bear as early as practical in the design
process. Sometimes referred to as “design-build-light,” this methodology maintains two separate contracts
between the City and the Design and GC/CM firms, similar to DBB, but encourages collaboration during
design to reduce risk once the Contractor proceeds to construction in the field. GC/CM is very similar to
Construction Management at-Risk (CMAR), which is the term used by the WDBC as illustrated in the
accompanying graphics.
While procurement processes for the Engineer or Designer is based on traditional
professional services criteria, the selection of the Contractor is largely
qualifications-based, without any hard bid of the construction cost (although
construction fees, or mark-ups on construction cost are often used as a price-
related selection criterion). The ultimate construction cost is developed during the
design period, typically in an open-book fashion, and ultimately agreed upon as a
“Guaranteed Price” (GP), which is then implemented “maximum allowable
construction cost” basis in Washington State prior to authorizing the start of
construction.
Where agreement on a GP cannot be reached, or when subcontracted construction pricing competitiveness
cannot be verified, Owners often maintain the option to convert the construction scope to a hard-bid
process, commonly known as the contractual “off-ramp.”
While promoting collaboration early in the design process, the formal contract vehicles consisting of
separate agreements between the Owner and Engineer and the Owner and Contractor are essentially
unchanged compared to traditional DBB delivery but with the construction cost and price development
methodology contractually defined as described above. During construction delivery, traditional practices for
managing Contractor change orders, requests for information (RFIs) from the Designer, and verification of
construction performance remain unchanged.
• Relies on proven, accepted method for selecting • Relies on Engineer’s estimate for initial cost characterization
professional engineering services based on qualifications • Creates a “forced arrangement” between Designer and Contractor that may – or
• Integrates constructability early in the design process may not – work
• Provides Contractor-led estimates earlier and allows scope • Final construction scope still subject to change order potential
revision during design to meet project budget • Added cost to Owner for Contractor’s pre-construction phase services (although may
• Can reduce overall project risk and contingency be offset with construction savings due to early collaboration)
• Can reduce design misunderstandings and resulting • Requires selection of Contractor based on qualifications without knowing full
potential for change orders construction price
• Allows qualifications and past performance to be • Separate contracts for design and construction creates multiple points of contact
considered when selecting a Contractor along with for Owner, and who must then take responsibility for resolving competing interests
consideration of certain price information (i.e., percent fee) • Does not inherently allow or support performance risk transfer - design obligation is
• Allows permitting process to be better integrated into traditional “Standard of Care,” and construction obligation is to build according to
design and construction planning the specified design
• Not as readily conducive to integration of a lifecycle approach or a performance-
based operations commitment
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Evaluation
2.3 Design Build

Under a DB structure, the Owner enters into a single contract with a single DB entity or a consortium of
entities acting together as one entity (e.g., a Joint Venture). Generally, the DB Contractor has the
responsibility of designing and building a project that meets Owner-prescribed performance standards, and
the Owner then pays the DB entity based on certain construction and performance milestones being
achieved. While not relevant to the City’s Project, easement acquisition scope may also be assigned to the
Design-Builder.
In practice, DB can be procured using several different methods, tailored to meet procurement statutes, to
align with project complexity, and the level of design completion anticipated prior to the procurement (often
referred to as an “indicative design or “bridging documents”). Design-Build models also support performance
risk transfer for both design and construction via extended acceptance testing and commissioning scope.
O&M and lifecycle considerations may also be integrated into Design-Build delivery (albeit not to the extent
of the Design-Build-Operate [DBO] method, which was not evaluated for the City in this case).
The various forms of DB differ largely on when pricing is requested of proposers and to the degree design
definition is developed in advance of the DB procurement and subsequently provided to the Design-Builder
as part of a request for qualifications (RFQ)/request for proposals (RFP). Two Design-Build methods were
considered for the City:
1.3.1 Progressive Design-Build (PDB)

In a Progressive Design-Build (PDB) procurement, a Design-Builder is selected
based on qualifications, generally similar to the GC/CM model. However, under a
single contract PDB model, the Design-Builder develops the design and
construction cost estimate in progressive steps, often in conjunction with the 30-
and 60-percent levels of design detail. Once the design is advanced to the
satisfaction of the City (sometimes as early as 30 percent, often 60 percent and
sometimes up to 90 percent), a Guaranteed Price (GP) is defined for approval by
the Owner. (As with GC/CM, the GP can be converted to a GMP or LS for actual
delivery of the construction phase.)
If the Design-Builder and the Owner cannot reach agreement on an acceptable GP, the Owner can use the
completed design as the basis for a hard construction bid procurement. In this case, an “off-ramp” occurs,
and the project is transitioned to DBB (or, less often, a FPDB), which will likely impact schedule.
Progressive DB is often preferred over FPDB when a project lacks definition or where permitting scope is
best left to Designer of Record (instead of completed as part of a design criteria package to accompany a
FPDB RFP), or when an Owner prefers to remain involved in the design process. PDB is often preferred over
DBB to leveraging the schedule, collaboration, risk transfer, and contractual advantages provided by a DB
approach, while retaining more traditional Owner hands-on engagement in the design process. PDB is also
valuable when regulatory permitting or funding sources require well-developed design solutions, or when an
Owner believes it can lower cost by participating in design decisions and in managing risk progressively
through the project definition phase.
Owners do not generally use the progressive procurement method when a project’s definition, including
permitting, is well advanced prior to the procurement or when a fixed construction price is preferred (or
required) to select a Design-Builder.
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Evaluation

• Single contract with and point of accountability to the Owner • Requires selection based on qualifications; fees not
• Maximum control under a single contract - over project design, construction, and O&M known until negotiation and full construction cost not
lifecycle costs because final contract is not signed until a significant portion of the known until GP
design is complete • May not be as fast to deliver as FPDB due to potential
• Single-phase, straightforward (i.e., inexpensive) procurement process that can be for extended design/estimate development period,
completed in short timeframe, with qualifications-based and pricing criteria including involvement of numerous stakeholders in
the design process
• Increased competition (i.e., increased marketplace interest) due to relatively low
proposal preparation cost and best value (qualifications, past experience and certain • May not be perceived as being “competitive” for
pricing information)- selection construction pricing
• Provides a single-entity team with aligned interests for project success • Requires significant Owner staff involvement and
resources during design
• Provides progressively detailed, Contractor-based estimates of total project costs from
earliest point in project through GP definition • May limit local/small Engineer participation due to
at-risk nature of the work and typical teaming with a
• Provides maximum opportunity for design and construction functions of the Design-
Contractor
Builder and Owner to collaborate to define scope, define the project to meet schedule
and budget (sometimes referred to as “design to budget”), and tailor subcontracting plan
• Provides on “off-ramp” to hard-bid construction if GP is not competitive or cannot be
agreed upon.
• Can substantially reduce Design-Builder-initiated change orders
• Can be implemented with expected pre-design level currently being prepared for the
Project
• Provides Owner the opportunity to transfer performance risk that exceeds the inherent
limitations of Standard of Care and traditional construction contracts
In a PDB procurement, the RFQ/RFP typically includes an Owner’s conceptual or preliminary designs to
illustrate project viability, permitting constraints, and desired features. Recommended best practice is to
provide the Design-Builder with flexibility in proposing improved configurations and alternatives to these
concepts during the procurement process and during the design phase. Prescriptive elements of the pre-
design should generally be minimized.
1.3.2 Fixed Price Design-Build (FPDB)

In a fixed price Design-Build Procurement, the RFQ/RFP generally includes around
a 30 percent preliminary design (sometimes referred to as an indicative design or
“bridging” design). This level of pre-design may vary greatly from project-to-project
and among various technical disciplines. Requirements for a performance-based
approach are stated as measurable performance objectives of the completed
project rather than specific approaches, treatment processes, or specifications
that the Design-Builder is required to apply. For a prescriptive approach, the pre-
design documents are required parameters to which the Design-Builder must
largely comply.
FPDB is often considered as a highly competitive contract delivery model given its industry-recognized
success in supporting large, complex projects. A performance-based procurement gives a Design-Builder the
flexibility to propose how they will meet the City’s objectives, while requiring proposers to provide a lump
sum, fixed price for completion of the Project. Except for explicitly approved Owner changes, the Design-
Builder must conform to their originally proposed price (except for unforeseen conditions and Owner-directed
changes).
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Performance-based procurements are often preferred when an Owner has a clear vision for how a facility
must perform, has limited resources, limited time, or limited interest in the specific method for achieving
required performance. This model is used to prompt industry’s most innovative and cost-effective solutions
through what is essentially a design competition, typically in combination with a need to accelerate
schedule. Conversely, as Owner requirements come to light after selection, the Owner-directed change is
likely to be additive to the origial fixed price proposal.

• Maximum potential for Design-Build cost savings through design • If lifecycle cost is not analyzed or operations impact not included in
innovation during competitive procurement scope, may result in higher O&M costs or undesirable or low-quality
• Maximum transfer of design-related performance risk to Design-Builder project features
• Perceived as “competitive” construction pricing, providing full contract • Depending on Owner’s preferences, may entail development of
cost at time of proposal approximately 30 percent design (may vary) prior to procurement
(which may or may not be prescriptive) or Owner may select a less
• Allows selection of Design-Builder based on past performance,
prescriptive approach where outcomes (performance), design
qualifications, and ability to work as a single-entity with aligned interests
criteria, and minimum technical requirements (i.e., scope, quality)
for project success
are specified
• Can substantially eliminate Design-Builder-initiated change orders
• Proposal evaluation and selection is relatively complex
(except for unforeseen conditions)
• Limited ability to predict what will ultimately be proposed
• Provides a performance risk transfer mechanism
• Fixed-price pricing may include excess risk and contingency cost
• Single contract with and point of accountability to the Owner
due to under-defined project scope
• Limited opportunity for Owner and Design-Builder collaboration on
design during procurement process
• Limited ability for Owner to adjust proposed design, scope without
resulting in Owner-initiated change orders and resulting price
adjustments.
• May limit local/small subconsultant participation due to at-risk
nature of the work
More prescriptive procurements are often preferred when Owners are very clear on their preferences and
want to use Design-Build to accelerate the schedule while allowing selection of a Design-Builder based on a
combination of qualifications and a fixed price. While a Design-Builder may offer a variation or alternative
concept to the bridging documents, procurement procedures are often established to require review and
approval of these exceptions or “alternative technical concepts” in advance of the proposal submittal. With
this method, the lump sum price in the Design-Builder’s proposal is only adjusted for specific Owner-initiated
scope changes, generally due to unforeseen conditions or a change in law or regulatory practice.
Section 3: Workshops and Outcomes

Three workshops were held with City staff and Brown and Caldwell in support of this delivery method
analysis. The on-line workshops were held with the objectives of understanding: the City’s overall Project
objectives and success factors; previous experience with collaborative delivery methods; risk allocation; and
other variables, such as administrative familiarity and required City resources, that might inform a delivery
method recommendation.
The three workshops are summarized below.
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3.1 Workshop 1 – Project Drivers (March 24, 2021)

Workshop 1 consisted of a free-form discussion (no prepared slide materials) with City participants to
identify key Project drivers, informally rank them, and ultimately form a working definition of Project success.
Specific delivery models were not the focus of this workshop, but the City’s past positive experience with
GC/CM was discussed as a relevant criterion for future consideration. However, aside from assessing past
GC/CM experience, the discussion was generally “delivery method agnostic.”
In summary, the following overall Project drivers were summarized as an outcome of this discussion with City
staff:
1. Focus on operational priorities and impacts:
a) Address operational objectives during design
b) Include lifecycle emphasis during pricing and decision-making
c) Maintain operations during construction
2. Maintain a high level of City “touch” during design process (e.g., input, influence, and City control of
design details):
a) High Touch: prescriptive requirements to reflect known preferences
b) Risk Avoidance: proven technology for primary process components
c) Lower Touch: “other scope” (e.g., scope unrelated to core treatment process that can be provided by
others with minimal input or risk to the City)
3. Risk: the City is willing to “buy risk down” (e.g., mitigate risk early in the project through detailed
planning and robust design choices)
4. Cost: early certainty is preferred; however, “best value” is a meaningful concept in lieu of only a low
capital cost criterion
5. Schedule: take the time to do things “right” (e.g., spend time planning and preparing to avoid schedule
delays later)
These goals and insights were used to populate the next workshop’s discussion regarding procurement
strategy and desired outcomes, and to assess delivery methods based on the City’s “comfort zones” for
subjects such as shifting risk and retaining control of design detail.
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3.2 Workshop 2 - Implementing Collaborative Delivery (March 31, 2021)

The second workshop addressed the agenda shown in Figure 2 and Attachment A, reviewing the critical
success factors that were identified in the prior workshop, articulating the need for a Project strategy related
to procurement and the selection of delivery methods; discussed risk transfer and the concept of “comfort
zones” relative to the City’s desire and willingness to deliver under various collaborative delivery formats;
and a detailed walk-through of each delivery model, including its strengths and weakness. This workshop
used slides based on WDBC material and was hosted via an on-line session.
Figure 2. Workshop 2 Agenda
Based on the critical success factors identified in the first workshop, four issues were highlighted in this
workshop to illustrate the concept of “comfort zones” and make a preliminary assessment of delivery
method compatibility:
• Touch What You Know
A high degree of City input is desired on core treatment process components; less hands-on touch is
needed for project components that are either unfamiliar or less critical from the City’s perspective.
• Early Price Certainty
Knowing the capital cost as early as feasible in the design process is important to the City.
• Take Time to Do it Right
A delivery implementation that allows time and consideration for critical decisions is valuable to the City;
“rushed” or uniformed decision-making is to be avoided.
• “Tried – True” Avoids Risk
The City is not interested in unproven or “leading edge” technology for core treatment processes; there
is room for more innovation for ancillary project components that are not seen as being as critical.
BC presented a preliminary assessment of the City’s potential prioritization of these issues relative to each
other, and for each issue, a preliminary assessment of each delivery method’s potential strengths,
weakness, and overall potential applicability to the Project. The merits of applying one or more delivery
methods to specific elements of the Project was discussed separately. These issues’ prioritization and
weighing relative to delivery methods was adjusted based on group input and consensus. Figure 3 shows the
outcome of the workshop discussion, after issues were reprioritized and ranked with input from the
attendees.
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Figure 3. Comfort Zone Assessment

Top Slide: Preliminary Alignment of Key Issues and Delivery Methods for the Program
(as revised during Workshop 2)
Bottom Slide: Alignment of City’s Key Issues Against the “Conventional Wisdom”
Regarding the Four Delivery Methods Under Consideration
(CMAR [GC/CM] and PDB demonstrating the best alignment to the City’s “Comfort Zones”)
The ranking of the four delivery methods against City objectives, based on “conventional wisdom” of each
methods relative attributes is illustrated on the bottom slide of Figure 3.
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Evaluation
Based on this assessment, a preliminary recommendation from this workshop was to consider downgrading
(or eliminating) FPDB from further consideration because it does not address the City’s desire for high-touch
portions of the design process, upfront planning and risk mitigation, as well as the likelihood that an
unproven technology perceived as “too far ahead of us” might be offered through the FPDB “design
competition” process.
In addition, DBB delivery was not considered a viable option due to the complexities of the Project and the
City’s desire to use a collaborative delivery method, either GC/CM or PDB.
On the positive side, both GC/CM and PDB were identified as viable potential delivery methods based on
their attributes of:
• Selection on qualifications and best value
• High Owner engagement for planning and in critical design decisions
• Earlier price certainty relative to traditional delivery
Based on discussion after presentation of the workshop materials, a primary disadvantage of PDB at this
point was identified as the City’s unfamiliarity with PDB-specific procurement procedures and contract
templates (as compared to GC/CM, which the City has used successfully in the past).
3.3 Workshop 3 – Risk, Detailed Scoring, and Preliminary

Recommendations (May 4, 2021)
The third workshop addressed the agenda shown in Figure 4 and Attachment B, consisting of a review of the
Project schedule and critical success factors, followed by further details of the GC/CM and PDB delivery
models. The schedule that was used to underpin the delivery method analyses is shown in Figure 5. The
initial portion of the discussion focused on how risk can be assessed and allocated and how risk allocation is
fundamentally different for traditional (DBB and GC/CM) projects under a Standard of Care versus a Design-
Build (PDB and FPDB) model.
The follow-on to Workshop 3 included a more detailed assessment of the delivery models using “heat maps”
(Figure 6). This assessment was discussed with City participants, and minor adjustments were made to the
assessment as a result of the discussion. Key issues were grouped by both overall importance and priority to
the City, as well as according to how much the delivery method might ultimately impact or influence success
on any given priority.
The outcome of the workshop was a recommendation to the City by BC to use either GC/CM or PDB, based
on the City assessment of two key factors:
1. Does the added ability to transfer treatment performance and other project-related risks (e.g., scope
gaps or design omissions) beyond Standard of Care provide meaningful value to the City?
2. Does the above risk transfer offset the added “administrative friction” that results from implementing a
DB procurement and contract (noting that the City has not previously used PDB, in contrast to GC/CM,
where the City has familiarity and an existing contract template)?
The workshop concluded with identifying two follow-on tasks:
1. Seek to provide the City with peer-to-peer references where both GC/CM (CMAR) have been used by the
same Owner, as a means for the City to gain firsthand insight to the two potential delivery methods, side-
by-side.
2. Draft this TM with any further refinements in the recommendation. (As discussed in the following
section.)
12
Evaluation
Figure 4. Workshop 3 Agenda
Figure 5. Program Schedule Assumed for Delivery Model Analyses
13
Evaluation
Figure 6. Detailed Assessment of Delivery Methods (as revised during Workshop 3)
Section 3: Post-Workshop Discussions and Recommendations

Subsequent to the third workshop, BC offers the following refined criteria to inform the City’s selection:
Choose GC/CM If…. Choose PDB If…

Continuity with existing Design Team is of value (for funding and A single point of design and construction accountability is desired
technical considerations)
Application and understanding of existing (successful) City GC/CM Implementation of a new procurement process and delivery method is an
procurement process is of value acceptable risk
Certainty in applying a proven core treatment process design is of value Potential innovation or “fresh eyes” on treatment process approach is of
value
There is perception of little meaningful risk to transfer for the ultimate A treatment process performance or other forms of performance
treatment process performance guarantees (e.g., design gaps or omissions or “fit for purpose”) is valuable
These criteria represent a summary of the significant differences between GC/CM and PDB to consider as
the City makes its delivery method decision. In short, if the City is committed to establish a PDB procurement
process and committing the resources to support the PDB Phase 1 design process, PDB has the edge. If the
City’s resources are constrained, then the familiarity of the GC/CM process and the more traditional design
implementation points toward a GC/CM decision.
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Evaluation
An additional input that was discussed subsequent to the workshops was level of market interest. Based on
the views of various potential Designers and Contractors who reached out to the City about the Project, there
are two perspectives to consider for both GC/CM and PDB:
• GC/CM will attract stand-alone Contractors, both regionally and nationally, without the need for engaging
a separate engineering firm as part of a team.
This approach requires less lead time for teaming and may attract a greater number of interested
parties familiar with GC/CM commonly used in Washington. However, GC/CM is not likely to attract
integrated Design-Build firms that favor an integrated DB approach and that do not typically propose on
CMAR projects without a design component.
• PDB will require formation of Design-Build teams (e.g., aligning Engineers and Contractors under a single
entity), in addition to potentially attracting “integrated” Design-Builders that are engaged in the City’s
geographic market.
This approach requires a bit more advance notice for quality teams to form, and potentially fewer
“pairings” will participate, but will more likely attract larger “integrated” Design-Builders that are
comfortable with providing a single point of accountability with contractual performance guarantees for
treatment process related performance and/or for scope gaps and fitness of purpose.
While initial market feedback points to a PDB preference, market interest is likely strong for both
methodologies, but may be best verified with further market and peer-agency outreach as other Owners’
experience in procuring both GC/CM (CMAR) and PDB projects can provide additional valuable insight.
Procurement schedules for both GC/CM and PDB would be relatively similar, with an estimated additional 1-
2 months for PDB as the City would need to prepare RFP front ends and a contract for that
methodology. Additionally, for either method, some municipalities procure an Owner Advisor separate from
the Pre-Design Engineer, while others incorporate the Owner Advisor role into the Pre-Design Engineer.
In summary, both GC/CM and PDB implementations would serve the City well. However, the City’s past
positive experience with GC/CM and the certainty of applying proven treatment process design points to a
GC/CM delivery methodology for the Project.
15
Evaluation
Attachment A: Delivery Model Analysis Workshop 2:

Comfort Zones
A-1
11/16/2021
Bellingham, Washington Agenda

Delivery Model Analysis
• Review of Program Schedule
Workshop 2: Comfort Zones
March 31, 2021 • Review of Critical Success Factors
• Presentation of Procurement Delivery Models
• Next Steps
Deciding to Implement a Collaborative Delivery Project r2020.01 TM © 2017-20 Water Design-Build Council Deciding to Implement a Collaborative Delivery Project r2020.01 TM © 2017-20 Water Design-Build Council
1 2
Program Schedule
Critical Success Factors – Key Takeaways

a) Addressing operational objectives during design
b) Lifecycle emphasis and pricing and decision-making
c) Maintaining operations during construction
2. Level of “Touch” during design process:
a) High Touch: Prescriptive requirements to reflect known preferences (City)
b) Risk Avoidance: Proven technology for primary process components (BC)
c) Lower Touch: “Other stuff” (Others)
3. Risk: willing to “buy it down”
4. Cost: early certainty preferred, “best value” means something
5. Schedule: take the time to do things “right”
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Water Design-Build Council
Procurement Delivery Models A non-profit educational

association established in 2005.
Mission
To evolve best practices for
Purpose: to help owners and
successful implementation of
industry practitioners understand
water projects through
the best practices for use in
collaborative-delivery methods by
design-build delivery methods for
facilitating thought leadership with
the water and wastewater
stakeholders through research,
infrastructure.
education, and communication.
Income is solely dedicated to
research, education and outreach.
Introduction r2020.01 TM © 2017-20 Water Design-Build Council Deciding to Implement a Collaborative Delivery Project r2020.01 TM © 2017-20 Water Design-Build Council
5 6
WDBC Members Advisor Group Members

Each member firm designates a representative and
Advise WDBC in the advancement of design-build delivery methods through
alternate to the Board of Directors
communication of industry trends, lessons learned, and advocacy of best practices
7 8
11/16/2021
WDBC Education Platform
• Original Research Deciding to Implement a

• Water and Wastewater Design-Build
Handbook, Fifth Edition Collaborative Delivery Project
• Procurement Guides
• CMAR
• Progressive Design-Build (PDB)
• Fixed-Price Design Build (FPDB)
• Publications and Blogs
• Partnerships
• AWWA/WEF/NACWA
• DBIA Best Practices
• W/WW Specialty Conference
• PDB Contract Document
9 10
Deciding to Implement: Key Concepts Structuring An Approach Choose A Delivery Model

• Structuring an approach choose the right delivery model Project success
• Strategy Strategy with a
• Tactics defined delivery approach
• Implementation
• What can you – or can’t – you do in your geography?
• Reflecting project priorities
• What’s the best approach for your specific project?
• Assessing Bellingham’s design-build Comfort Zones
• What needs to happen prior to a procurement?
Outcome = Best Possible Project

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11/16/2021
Structuring An Approach Choose A Delivery Model Structuring An Approach Choose A delivery Model
Procurement strategy
Tactics that result Project
in a successful Award Implementation
that reflects your vision for success
• How much design needs to be
done? • What happens after Award?
• How do we evaluate qualifications • What do we need to do organizationally
and proposals? to prepare and deliver?
• How do we select a contract and
evaluate financials?
Outcome = Best Possible Project Outcome = Best Possible Project

13 14
Identifying Project Priorities: What Are The Key Topics?

Issue: Design Effort
Statutory and Regulatory Requirements Organizational Capacity
How much pre-design is Issue: Design Approvals
• Understand state and local statutes • Owner level of involvement How much oversight of
• Apply procurement regulations and policies Technical Criteria and Scope • Leadership knowledge required to ensure you get
• Refine scope and project definition • Staff knowledge
Issue: Schedule design should you have?
• Understand market precedent what you want (versus
Permitting and Technical Requirements • Define specifications and requirements • Technical resources How can the
• Refine performance and prescription balance • Definition of roles performance specifications)?
• Accommodate permitting constraints procurement process
• Balance innovation and prescription • Create “bridging” documents • Augmentation of resources
• Define project location and scope (only as required) Project Implementation Plan be varied if schedule
Funding Considerations • Identify technology/design constraints and create • Organizational preparation is critical?
• Define/obtain funding/ financing options opportunities for innovation • Procurement preparation
• Understand market capacity/ risk tolerance Define the Procurement Process • Implementation Issue: Price
• Apply cash-flow constraints • Create 1- or 2-phase RFQ/RFP documents Scope During Construction How do you evaluate
Key Project Drivers • Define evaluation priorities and methodology • Provide field support and inspection Issue: Risk Sharing proposals beyond price?
• Control and share risk • Develop evaluation criteria and process • Provide required third-party testing How are risks best shared?
• Define “cost” and its importance • Establish milestones and schedule • Cost monitoring Does low price always win?
• Identify the importance of schedule • Plan for market orientation and engagement • Contract compliance monitoring
• Recognize the value of innovation Financial and Commercial Requirements • Support quality and safety programs Issue: Selection Criteria
• Identify/address key stakeholders • Establish budget and contingency approach What criteria are important to
• Assess operational impacts • Define required financial capacity and security success?
Define Project Objectives • Calculate potential damages and incentives
• Align to delivery models • Develop payment mechanism and criteria What’s the best indicator of Issue: Innovation
• Establish insurance requirements future performance? Issue: Scope
• Optimize risk allocation How do you ensure
• Establish metrics for success Legal Advice and Form of Contract What elements of the
Consider • Engage legal counsel innovation and
projects should be DB versus
Outcome = Best Possible Project
• Conducting a Market Sounding
• Developing a preliminary risk assessment
Using an Owner Advisor
• Select and tailor form of contract
• Iterate the contract with the market
Risk and Opportunity Assessment
traditional delivery?
quality?
• Determine need • Identify, assess, manage, and assign risk and

• Define technical scope opportunity in support of all the above
Deciding •
toDefine role and
Implement responsibilities
a Collaborative Delivery Project r2020.01 TM © 2017-20 Water Design-Build Council Deciding to Implement a Collaborative Delivery Project r2020.01 TM © 2017-20 Water Design-Build Council
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Identifying Project Priorities : What Are The Key Topics? Identifying Project Priorities: Consolidating Key Project Drivers
Issue: Design Effort
How much pre-design is Issue: Design Approvals
required to ensure you get How much oversight of
Issue: Schedule design should you have?
what you want (versus
How can the
performance specifications)?
procurement process
be varied if schedule
Touch What You Know
is critical?
Issue: Price Early Price Certainty
How do you evaluate
Issue: Risk Sharing proposals beyond price?
How are risks best shared? Does low price always win? Take Time to Do it Right
Issue: Selection Criteria
What criteria are important to “Tried - True” Avoids Risk
success?
What’s the best indicator of Issue: Innovation
future performance? Issue: Scope
How do you ensure
What elements of the
innovation and
projects should be DB versus
quality?
traditional delivery?
17 18
Identifying Project Priorities: Project Delivery “Comfort Zones” Comfort Zone: Avoiding Stakeholder Surprises
Bellingham Critical
Success Factors
Post Point
Priorities?
? ?
1
Touch What You Know Touch What You Know
2
Early Price Certainty Early Price Certainty
3 Take Time to Do it Right
Take Time to Do it Right
4 “Tried - True” Avoids Risk “Tried - True” Avoids Risk

Traditional Collaborative Traditional Collaborative
Procurement Delivery Procurement Delivery
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Comfort Zone: Avoiding Stakeholder Surprises Comfort Zone: Meeting the State Budget
Bellingham maintains control... DB firm assumes some control...

and keeps most of the risk ? and shares risk via KPIs
result:
Bellingham directs a solution
result :
Bellingham delegates a solution
?
Bellingham Design-Builder
Touch What You Know
Directs Accountable Touch What You Know
Early Price Certainty
“Tried - True” Avoids Risk

21 22
Comfort Zone: Meeting the Stated Budget Comfort Zone: Coordinating Easements Early
Fixed design fees and Single project price, often in combination
low-bid contracting ? with performance guarantee
result: result:
Potential lower first price, Potential higher first price, ?
later change potential more price certainty
Touch What You Know
Initially “Best Value”
Lowest Price Price Early Price Certainty

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Comfort Zone: Coordinating Easements Early Comfort Zone: Minimizing Construction Impacts
Typical 5-year project involves The same 5-year project might take
multiple, discrete steps ? 2 or 3 years involving parallel activities
result:
More detailed planning time
result:
Less detailed planning time
?
Touch What You Know
Lowest Price Price Early Price Certainty
More Prep Less Prep
Prior to Take Time to Do it Right Prior to Take Time to Do it Right
Construction Construction
25 26
Comfort Zone: Minimizing Construction Impacts Comfort Zone Assessment Informs Procurement Method Selection
Where does
Complex challenges with Complex challenges with ?
Bellingham Fall?
technical alternatives
result:
? technical alternatives
result:
City’s “Comfort Level”
Key Issues:
“Proven” “Innovative” Order of Overall
Best Technical Approach Best Technical Approach Importance
Bellingham Design-Builder Bellingham 1 Design-Builder

Directs Accountable Directs Accountable
Initially “Best Value” Initially “Best Value”
Lowest Price
Low Price
4 Early Price Certainty
Price Price
More Prep Prior Less Prep Prior More Prep Prior Less Prep Prior
to Construction Take Time to Do it Right
to Construction to Construction 2 Take Time to Do it Right
to Construction
“Proven” “Tried - True” Avoids Risk “Innovative” “Proven” “Tried - True” Avoids Risk “Innovative”
Approach Approach Approach 3 Approach
Traditional Collaborative
Procurement Delivery Traditional Collaborative
Procurement Delivery
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Collaborative Delivery
Methods Course Principles and Best Practices of
Principles and Best Practices of Collaborative Delivery r2020.01 TM © 2017-20 Water Design-Build Council Deciding to Implement a Collaborative Delivery Project r2020.01 TM © 2017-20 Water Design-Build Council
29 30
Collaborative Delivery Methods - Key Concepts “Alternative Collaborative Delivery”

• Collaborative Delivery Defined
• Spectrum of Collaborative Delivery Options
• Delivery Methods
• Baseline: Design-Bid-Build (DBB)
• Construction Management at Risk (CMAR)
• Design-Build
• Progressive Design-Build (PDB)
• Fixed Price Design-Build (FPDB)
• Summary of Key Attributes
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“Alternative Collaborative Delivery” Spectrum of Collaborative Project Delivery Options
Traditional Collaborative Design-Build
-Fifth Edition, Chapter 2
33 34
Baseline: Design-Bid-Build (DBB) Design-Bid-Build Comfort Zones

Where does
The traditional project
delivery system for
• Traditional “cast” ?
Bellingham Fall?
of participants City’s “Comfort Level”
public entities under which
the Owner holds separate • Widely accepted, well Key Issues:
contracts with a Designer established linear Order of Overall “Conventional Wisdom” for
followed by a Contractor. development process Importance Design-Bid-Build
• Distinct milestones that Bellingham Design-Builder
create expected results 1 Touch What You Know
Directs Accountable
• Design is completed Initially “Best Value”
prior to bidding Low Price
Price
• Bidding is completed More Prep Prior
2 Take Time to Do it Right Less Prep Prior
prior to construction to Construction to Construction
“Proven” “Tried - True” Avoids Risk “Innovative”
Approach 3 Approach
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Construction Management at Risk (CMAR) CMAR Comfort Zones

Separate contracts with a Where does
Designer and a Contractor, • Familiar “cast” of participants,
but can be delivered faster
?
Bellingham Fall?
but working together. City’s “Comfort Level”
• Still two separate contracts Key Issues:
Design is performed with CW Order of Overall “Conventional Wisdom” for
in parallel with the
• Traditional selection of Importance CMAR
construction planning
and estimating. Designer, but alternative
method to select the Bellingham 1 Design-Builder
Construction can start after Touch What You Know
Contractor Directs Accountable
mutual agreement on
cost and price. • Sometimes called Initially “Best Value”
Low Price
“design-build light” or Price
an “arranged marriage” More Prep Prior Less Prep Prior
to Construction 2 Take Time to Do it Right
to Construction
• Construction costs estimated
in parallel with design “Proven” “Innovative”
3 “Tried - True” Avoids Risk
Approach Approach
38 40
Multiple Approaches to Design-Build (DB) Progressive Design-Build (PDB)

A single entity or purpose-
Design-Build built team to deliver both
• New cast of participants
Design and Construction
via a single contract. • Concurrent activities reduce
A single entity or purpose- Design detail and schedule – construction can
built team to deliver both construction estimate is start before design is
Design and Construction developed progressively. complete
through one contract with • Selection based on quals and
the Owner. Construction starts after
fee, not a fixed price
mutual agreement on price.
• “Design to budget” via
There are several commonly design and estimate iteration
used variations of design-build:
• GMP, Lump Sum, and
• Progressive (PDB)
Shared Savings options
• Fixed Price (FPDB)
• Hard-bid “off-ramp” if
construction pricing not
acceptable
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Progressive Design-Build Comfort Zones Fixed Price Design-Build (FPDB)

Where does
?
Bellingham Fall?
A single entity or purpose-
built team to deliver both • Variable “cast” of participants,
City’s “Comfort Level” Design and Construction depending on project
Key Issues: via a single contract. complexity
Order of Overall “Conventional Wisdom” for Design detail and • Multiple variations: two-
Importance Progressive Design-Build construction estimate phase selection is common
provided as part of a • Can require a lengthy
Bellingham 1 Design-Builder fixed-price proposal.
Touch What You Know procurement process,
Directs Accountable
Construction can start reduced delivery time
Low Price
4 Early Price Certainty quickly after selection. • The proposal is essentially a
Price
“design competition”
More Prep Prior Less Prep Prior
to Construction
• May use performance-based
criteria or prescriptive criteria
“Proven” “Tried - True” Avoids Risk “Innovative” – or usually a balance of both
Approach 3 Approach • Construction price fixed at
selection
44 45
Fixed-Price Design-Build Comfort Zones Comparison

Where does
?
Bellingham Fall?
City’s “Comfort Level”
Key Issues:
Order of Overall “Conventional Wisdom” for
Importance Fixed-Price Design-Build
Bellingham 1 Design-Builder
Touch What You Know
Directs Accountable
Low Price
Price
More Prep Prior Less Prep Prior
to Construction
“Proven” “Tried - True” Avoids Risk “Innovative”
Approach 3 Approach
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Delivery Methods: Summary of Key Attributes

Most accepted method
Allows Owner involvement
Creates collaborative environment
Performance risk transfer
Schedule acceleration
Next Steps
Market-test Potential schedule acceleration Owner can stay involved (PDB)
Initial cost certainty Accepted procurement process Design to budget (PDB)
Existing procedures/contracts High market acceptance Availability of off-ramp (PDB)
Legal everywhere Availability of the off-ramp
Potential for shared savings
Early cost certainty early (FPDB)
Potential for innovation (FPDB) • Refine analyses based on comfort zones
Owner responsible for scope
and unforeseen conditions
Owner responsible for scope and
unforeseen conditions
Owner responsible for scope and
unforeseen conditions
• Workshop 3 – Risk Allocation
Owner “owns” delivery issues
Owner “owns” delivery issues, Design-builder takes • After April 26th
but mitigates challenges early responsibility for delivery
Well-understood risk allocation Existing risk allocation managed with Appropriate risk transfer
(history of Change Orders) early contractor involvement (performance, schedule, permits)
Specification-based Specification-based with input Performance-based
Predictable schedule Accelerated schedule; Potentially fastest delivery;
(linear and usually longer) concurrent procurements Concurrent design/construct
Proven and familiar, but known Design-Build “lite” – familiar Proven, but not as familiar
challenges to success yet introduces collaboration Ensures collaboration
Multiple contracts and separate Multiple contracts; Single contract;
deliverables coordinated deliverables single-point responsibility
Multiple procurements Multiple procurements Single procurement
Existing procurement process Adapt existing process New procurement process
Traditional roles Traditional roles/untraditional times New roles
49 50
Evaluation
Attachment B: Delivery Model Analysis Workshop 3:

Risk and Delivery
B-1
11/16/2021
Bellingham, Washington Agenda

Delivery Model Analysis
• Review of Program Schedule/Critical Success Factors
Workshop 3: Risk and Delivery
May 4, 2021 • Presentation of Procurement Delivery Models
• Next Steps
Implementing Collaborative Delivery Project - Risk Considerations r2020.01 TM © Portions 2017-21 Water Design-Build Council Implementing Collaborative Delivery Project - Risk Considerations r2020.01 TM © Portions 2017-21 Water Design-Build Council
1 2
Program Schedule
Critical Success Factors – Key Takeaways

a) Addressing operational objectives during design
b) Lifecycle emphasis and pricing and decision-making
c) Maintaining operations during construction
2. Level of “Touch” during design process:
a) High Touch: Prescriptive requirements to reflect known preferences (City)
b) Risk Avoidance: Proven technology for primary process components (BC)
c) Lower Touch: “Other stuff” (Others)
3. Risk: willing to “buy it down”
4. Cost: early certainty preferred, “best value” means something
5. Schedule: take the time to do things “right”
3 4
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Spectrum of Collaborative Project Delivery Options

Meeting Purpose
Traditional Collaborative Design-Build

Initial Assessment
(Where we left off…)
5 6
Design-Bid-Build Comfort Zones CMAR Comfort Zones

Where does Where does
?
Bellingham Fall? ?
Bellingham Fall?
City’s “Comfort Level” City’s “Comfort Level”
Key Issues: Key Issues:
Order of Overall “Conventional Wisdom” for Order of Overall “Conventional Wisdom” for
Importance Design-Bid-Build Importance CMAR
Bellingham 1 Design-Builder Bellingham 1 Design-Builder

Low Price
Low Price
Price Price
Less Prep Prior More Prep Prior Less Prep Prior More Prep Prior
to Construction
Approach 3 Approach Approach 3 Approach

7 8
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Progressive Design-Build Comfort Zones Fixed-Price Design-Build Comfort Zones

Where does Where does
?
Bellingham Fall? ?
Bellingham Fall?
City’s “Comfort Level” City’s “Comfort Level”
Key Issues: Key Issues:
Order of Overall “Conventional Wisdom” for Order of Overall “Conventional Wisdom” for
Importance Progressive Design-Build Importance Fixed-Price Design-Build
Bellingham 1 Design-Builder Bellingham 1 Design-Builder

Low Price
Low Price
Price Price
Less Prep Prior More Prep Prior Less Prep Prior More Prep Prior
to Construction
Approach 3 Approach Approach 3 Approach

9 10
Comparison One More Variable:

Risk Management Fundamentals
Risk Management and Contracts r2020.01 TM © 2017-20 Water Design-Build Council
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Risk Management and Contracts: Key Concepts What is “Risk” and “Risk Allocation”?
• Guiding principles of risk -Fifth Edition, Glossary
• Risk-related definitions
• Fundamental risk allocation shift:
Traditional risk allocation to Performance-based Risk Allocation
• Commercial concepts specific to
CMAR and and Progressive Design-Build
Risk Management and Contracts r2020.01 TM © 2017-20 Water Design-Build Council Risk Management and Contracts r2020.01 TM © 2017-20 Water Design-Build Council
13 14
Design Build: A Fundamental Shift in Risk Allocation Collaborative Project Risks and Allocation Principles
Traditional Risk Allocation
-Fifth Edition, Chapter 3, Table 3.1  Retained by Owner
Performance-Based Risk Allocation  Shared
 Assumed by Collaborative Delivery Entity
Professional Services Construction Single Entity or Consortium

“Design” “Bid” “Build” “Design-Build”
Scope Scope Scope
Planning, consulting, design, Equipment, materials, construction, A comprehensive project, inclusive of all scope from
engineering, design, services during startup, and construction warranty. design through construction, and sometimes short- or
construction. long-term O&M.
$$
$$ Typically bid as a fixed price. $$
Typically sold as billable hours. Proposed fee on actual cost (Progressive) delivered
Risk
Risk Conformance with as-bid on a GMP or lump sum basis; or a fixed price.
Standard of care, competence is documents, verified by a third-party, Risk
assumed, but responsibility for total independently tested where Commitment to performance within a contractually
installed cost and performance appropriate, and managed through a defined set of input and output parameters.
ultimately transferred to the Owner. quality compliance mechanism.
Defined Deliverables Defined Project Performance

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Risk Allocation= Progression of Risk Allocation and Management

Risk Management Defined Deliverables Defined Project Performance
-Fifth Edition, Chapter 3, Tables 3.1 and 3.2
Designer Designer Design-Builder Design-Builder

• Full plans • Full plans • Design risk (with • Design risk (with
(Standard of Care) potential potential few
(Standard of Care) exceptions)
✚ potential for exceptions)
design iteration • Cost estimate ✚ Cost estimate
Contractor based on based on proposal
Contractor collaborative
• Conformance to collaborative
• Conformance to design and design and
plans, schedule, plans, schedule,
bid price procurement procurement
bid price ✚ construction cost • Project • Project
✚ potential for performance performance
partial design risk • Schedule • Schedule
(obvious errors/ • Admin ✚ Admin + potential
omissions) permits regulatory permits
17 18
Risk Registers Create Risk Transparency

From Concept to Contract -Fifth Edition, Chapter 3, Figure 3.2
-Fifth Edition, Chapter 3, Table 3.2
Best Practices for Risk Management
• Provide early communication with Proponents
via a conceptual risk allocation table like this one
(Pre-RFQ or with the RFQ)
• Use a design-build form of contract as a starting
point (not a DBB contract)
• Provide more detail as the procurement progresses:
o Provide a DRAFT Contract with the RFP
(or earlier, just after short-list)
o Provide opportunity for comment, input, and at
least one revision prior to Proposal submittal
o Use confidential one-on-one meetings with
Proponents for efficient commercial discussions
Create Risk Transparency
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The Contract: Commercial Concepts The Contract: Commercial Concepts

Key Commercial Concepts
Key Commercial Concepts • Definition of Cost/Cost of Work Key Commercial Concepts
• Definition of Cost/Cost of Work • Open Book • Definition of Cost/Cost of Work
• Open Book • Price • Open Book
• Preconstruction Services
• Price • Construction Fee • Price
• Preconstruction Services • Preconstruction Services
• Construction Fee • Shared Savings • Construction Fee
• Shared Savings • Open Book Contingency • Shared Savings
• Open Book Contingency • The Off-Ramp • Open Book Contingency
• The Off-Ramp • The Off-Ramp
21 22

Key Commercial Concepts Key Commercial Concepts
• Definition of Cost/Cost of Work Definition of Cost • Definition of Cost/Cost of Work Open Book
• Open Book • Critical foundation for all Open-Book • Open Book • Requires costs to be clearly defined and validated.
• Price methodologies: the contract should define • Price • It means what it says: the estimate of costs is open,
• Preconstruction Services what “Cost” means. • Preconstruction Services transparent, and shared among all parties.
• Construction Fee • Construction Fee
• Start with verifiable, documented actual cost
• Shared Savings • Shared Savings • The degree of detail that is shared can be debated
of directly purchased goods and services.
– but should be defined up-front.
• Open Book Contingency • Define whether subcontracted scope is, by • Open Book Contingency
• Subcontract quotes are treated as stand-alone
• The Off-Ramp definition, a cost to the Prime Contract. • The Off-Ramp
costs, but the process for obtaining the quotes
• Address “soft” cost such as overheads, needs to be transparent.
equipment leasing, and other similar scope
What are some other costs that are that can be open for interpretation.
a challenge to validate? • Consider defining any “soft costs” up front,
How can these be defined ahead of even if approximations
time in the contract? (e.g., overhead rates).
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Key Commercial Concepts Key Commercial Concepts
• Definition of Cost/Cost of Work • Definition of Cost/Cost of Work Price
• Open Book • Open Book • Cost is not the same as price.
• Price • Price • Price includes cost plus anything else –
• Preconstruction Services • Preconstruction Services including profit.
• Construction Fee • Construction Fee
• Shared Savings • Shared Savings • Hard Bid, Lump Sum, and Fixed-Price approaches
combine cost plus anything else (such as profit)
• Open Book Contingency • Open Book Contingency to equal the price.
• The Off-Ramp • The Off-Ramp
• GMP and other open book approaches define
and document actual cost.
• A Fee is then added to cover anything else
5th Edition, Page 2-9 (typically overhead and profit) to define
Applies to CMAR, Progressive Design-Build, the price.
and Cost + Fee methodologies An open book cost with a fee added to create a
Does not apply to Fixed-Price price can be converted to a Lump Sum, closed
methodologies or during Lump Sum delivery book approach for delivery.
25 26
The Contract: CMAR/PDB Shared Savings The Contract: CMAR/PDB Open Book Contingency
Key Commercial Concepts
• Definition of Cost/Cost of Work Shared Savings Contingency
• Open Book • Applies to “open book” approaches. • Fixed-Price Design-Builders will include
• Price contingency in their price, to use at their
• Accommodates the potential for actual
• Preconstruction Services discretion.
cost to be less than estimated cost
• Construction Fee • CMARs and Progressive Design-Builders
(an underrun).
• Shared Savings must define contingency as part of project
• The Contract sets a ratio to share any
• Open Book Contingency cost, based on a collaborative, open book
underrun between the Owner and risk and opportunity assessment.
• The Off-Ramp CMAR/Design-Builder.
• The contract should define when the
• Shared savings can be reimbursed
contingency can be used:
PROS CONS or used for additional scope.
• “If that price was so darn good, ‒ Does it cover scope changes?
• Incentivizes continued
efficiency and VE after why should we have anything • Want to share an overrun? ‒ Does it cover CMAR/Design-Builder
agreement on the price. left over?” Consider a “Target Price” model construction errors?
• Provides flexibility to add back • “Any savings should accrue to
desired scope that may have the public owner and Owners may create two funds:
been removed to achieve price. ratepayers without sharing.” one that they control and
• Supports collaborative • “Efficiency should accrue to the one that the CMAR/ PDB can use at will.
decision-making Contractor – use Lump Sum.”
27 28
11/16/2021
The Contract: The CMAR/PDB Off-Ramp Delivery Method Ranking Heat Map
Relative Importance Design-Bid-Build CMAR Progressive DB Fixed-Price DB
The Off-Ramp Delivery Method
Key Selection Criteria to Bellingham Favorability Favorability Favorability Favorability
• Key Contract clause for CMAR and Progressive Design-Build. Potential Risk Transfer Benefits may HIGHLY Impact Delivery Method Selection
Ability to transfer performance risk Very UNfavorable UNfavorable Favorable Very Favorable
• At the Owner’s sole discretion, forgoes the construction phase.
Performance guarantee Performance guarantee
Relative value of risk transfer for SOLIDS [LOW-MED] Equipment warranty only Extended warranty
with LDs with LDs
• Owner has the option of finishing the design in any manner.
Performance guarantee Performance guarantee
Relative value of risk transfer for BIOGAS [MED-HIGH] Equipment warranty only Extended warranty
with LDs with LDs
• Owner has the option of traditionally bidding the work.
Project-Specific Criteria HIGHLY Impacted by Delivery Model Selection
Touch What You Know HIGH Traditional design Traditional design direction Collaborative interaction: Design criteria set at
(City input/decisions on critical design/scope) direction/interaction with contractor input City with design-builder RFP phase
Creates incentive Early Price Certainty HIGH Price known after 100% design Price known at 60% design, Price known at 60% design, Price known at proposal,
(Set a realistic budget early, and stick to it) and bid, then subject to COs subject to GMP+COs subject to GMP Very limited COs
for the CMAR or Design-Builder Take Time to Do it Right Linear process takes too much Heavy lift prior to RFP; some
HIGH Phase 1 collaboration Phase 1 collaboration
to achieve an agreeable GMP. (Go slower to get things set up well, and then go faster) time; limited collaboration interaction during proposal
“Tried - True” Avoids Risk HIGH City gets what it prescribes

City gets what it prescribes, City gets what it prescribes, City prescribes performance
Downside for the Owner: (Require proven technology for critical scope) with construction input with DB collaboration specification, gets what it gets
taking the off-ramp can significantly delay construction. Any Other Critical Issue(s)
(Fill in for individual concerns)
?
Other Criteria that COULD be Impacted by Delivery Model Selection
Long lead time to project Very integrated approach,
WIFIA and Other Funding Considerations MED shovel in the ground
Supports early application
supports application process
Earliest to be be shovel-ready
New to City, Completely new procurement

New/Complex Procurement Method MED Very familiar to City Familiar to City
but similar to CMAR and contracting process
Least popular method for High interest from both High interest from both Limited interest in a busy
Market Acceptance/Interest HIGH quality contractors in W/WW engineers and contractors engineers and contractors market, high cost to propose
29 30
Recommendation Next Steps

• CMAR for lower risk transfer
• Pros: Simpler procurement process; contract template in hand;
design continuity
• Cons: lack of risk transfer mechanism;
traditional change order process during construction
• PDB for more risk transfer
• Pros: Risk transfer potential; single entity coordination; single procurement;
scope change management
• Cons: New contract template/new procurement process;
may not be value in risk transfer; requires OA scope
• Similar for Both
• Price certainty at 60% design; collaboration during design process;
high market interest; WIFIA compatibility; schedule efficiency
31 32

TM 17 Bellingham Delivery Method

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Technical Memorandum

701 Pike Street, Suite 1200

Prepared for: City of Bellingham Public Works Department

Technical Memorandum No. 17

Section 2: Delivery Method Options Considered

2.1.1 Advantages and Disadvantages of Each Method

Advantages to Bellingham Disadvantages to Bellingham

2.2 General Contractor/Construction Manager (GC/CM)

2.3 Design Build

1.3.1 Progressive Design-Build (PDB)

Advantages to Bellingham Disadvantages to Bellingham

1.3.2 Fixed Price Design-Build (FPDB)

Advantages to Bellingham Disadvantages to Bellingham

Section 3: Workshops and Outcomes

3.1 Workshop 1 – Project Drivers (March 24, 2021)

3.2 Workshop 2 - Implementing Collaborative Delivery (March 31, 2021)

Figure 2. Workshop 2 Agenda

Figure 3. Comfort Zone Assessment

3.3 Workshop 3 – Risk, Detailed Scoring, and Preliminary

Figure 4. Workshop 3 Agenda

Figure 5. Program Schedule Assumed for Delivery Model Analyses

Figure 6. Detailed Assessment of Delivery Methods (as revised during Workshop 3)

Section 3: Post-Workshop Discussions and Recommendations

Choose GC/CM If…. Choose PDB If…

Attachment A: Delivery Model Analysis Workshop 2:

Bellingham, Washington Agenda

1. Focus on operational priorities and impacts:

Water Design-Build Council

Procurement Delivery Models A non-profit educational

WDBC Members Advisor Group Members

WDBC Education Platform

• Original Research Deciding to Implement a

Deciding to Implement: Key Concepts Structuring An Approach Choose A Delivery Model

Outcome = Best Possible Project

Outcome = Best Possible Project Outcome = Best Possible Project

Identifying Project Priorities: What Are The Key Topics?

• Determine need • Identify, assess, manage, and assign risk and

4 “Tried - True” Avoids Risk “Tried - True” Avoids Risk

Bellingham maintains control... DB firm assumes some control...

Early Price Certainty

Take Time to Do it Right

“Tried - True” Avoids Risk

Take Time to Do it Right

“Tried - True” Avoids Risk

Bellingham Design-Builder Bellingham 1 Design-Builder

Collaborative Delivery Methods - Key Concepts “Alternative Collaborative Delivery”

“Alternative Collaborative Delivery” Spectrum of Collaborative Project Delivery Options

Traditional Collaborative Design-Build

-Fifth Edition, Chapter 2

Baseline: Design-Bid-Build (DBB) Design-Bid-Build Comfort Zones

Construction Management at Risk (CMAR) CMAR Comfort Zones

Multiple Approaches to Design-Build (DB) Progressive Design-Build (PDB)

Progressive Design-Build Comfort Zones Fixed Price Design-Build (FPDB)

Fixed-Price Design-Build Comfort Zones Comparison

Delivery Methods: Summary of Key Attributes

Attachment B: Delivery Model Analysis Workshop 3:

Bellingham, Washington Agenda

1. Focus on operational priorities and impacts:

Spectrum of Collaborative Project Delivery Options

Traditional Collaborative Design-Build