Lessons Learned by a Design-Build General Contractor: Johnston Construction

Trey Johnston, PE, DBIA, President & CEO and Mike Geissler, PE, DBIA, Design-Build Manager

Who is Johnston Construction?

Johnston Construction Company

Multi-trade Engineered Construction since 1976

Regionally focused, full service design-build environmental general contractor

Integrated design-build partner with experience from raw to finished water & influent to effluent

Treatment plant construction accounts for 80% of our work with other related construction accounting for the balance

Johnston Construction Company: Differentiating Capabilities

Fully Integrated Design-Build (small projects) Team Approach to Design-Build (majority of

projects) Professional Certifications including PE & DBIA Full Self Perform Capabilities (excavation,

concrete, mechanical) Vast Design-Build Experience (since 1980s)

An Academic Perspective: Performance Evaluation of Design-Build vs. Design-Bid-Buildfor Water and Wastewater Facilities

Research Study Directors Susan Bogus Halter, PhD, PE (Univ. of New Mexico) Keith Molenaar, PhD, DBIA (Univ. of Colorado) Jennifer Shane, PhD (Iowa State Univ.)

Research Study Objectives Develop a statistically-significant data set of municipal

water and wastewater infrastructure projects Quantify the relative cost, schedule, and quality

differences Provide an overall evaluation of design-build and

design-bid-build delivery methods Funded by the Water Design-Build Council

The median schedule growth after contract award for design-build projects is half as large as the schedule growth for design-bid-build projects;

Design-build projects finish on or below contract price twice as often as design-bid-build projects;

The average intensity (value of work completed per month) of design-build projects is more than double that of design-bid-build projects;

Contracts using guaranteed maximum prices (GMPs) are more likely to have no schedule or cost growth as compared to projects with lump-sum contracts; and

There is no significant difference in constructed quality between design-build and design-bid-build projects.

Key Study Findings: Performance Evaluation of Design-Build vs. Design-Bid-Buildfor Water and Wastewater Facilities

Lessons Learned: Design-Build Cost Advantages

Lesson Learned: Design-Build Cost Advantages

Design-Build RFPs provide project costs from multiple teams prior to the owner investing in the project

Minimal expense is incurred in developing the RFPs

Sole source responsibility minimizes owner’s risk

Benefit from not having to adhere to Spearin Doctrine (owner warrants plans and specs) which does not apply to design-build

Change orders result from changes in scope (not design omissions)

Standard bidding documents are not required

The common practice is for the design to comply with standard specification and details

The owner should plainly state the specific features wanted in the RFP

Lesson Learned: Design-Build Cost Advantages (con’t)

Lesson Learned: The Fast Track Requires Team Commitment

Team Challenges of Fast Tracked Projects

Preliminary design, equipment selection and pricing are performed concurrently during the RFP and proposal stage.

The owner should provide direction on the acceptability of the major equipment selection when the proposal is accepted.

The design is finalized around specific equipment manufactures rather than specifications.

Equipment may be procured and shop drawings may be reviewed while the final design is being completed.

Lesson Learned: Use Cost Information to Guide the Design

Use Cost Information to Guide the Design

General Contractors have the unique perspective of working with many engineers and seeing different approaches to similar projects – they frequently think outside the box

Constructability issues can be identified and corrected early - before costs are incurred

General Contractors may offer the most economical construction means and methods during the preliminary design phase.

Complete estimates can be done along with conceptual designs

Lessons Learned: Key Tenets of a Successful RFP

Lesson Learned: Key Tenets of a Successful RFP

Clearly define the project objective Identify regulatory deadline Upgrade plant while maintaining operation Increase capacity

Be upfront about the level of owner control required Submittal review & approval authority Compliance with standard specifications and details Identify plant specific items that must be included in the

project Use descriptive form (prescriptive only as needed) Clearly define the evaluation criteria

RFP Format: General – Descriptive

A general RFP has a descriptive style Gives Design-Build team maximum flexibility and owner least control Owner will realize the greatest cost and time savings Owner should be comfortable with the lack of control or problems will

arise during the project Recommendation: The design-builder should include a detailed scope

of work with clarifications in the proposal Not recommended if the owner has strong preferences for equipment,

materials and finishes Highly recommend an allowance/contingency format to allow the

owner to add upgrades or additional scope Examples

Preference for maximum thickness slabs Preference for FRP panels instead of gypsum board The addition of wash down stations for maintenance personnel Additional spare parts and extended warranties

RFP Format: Specification - Prescriptive

A Specification-based RFP has a prescriptive style Gives Design-Build team limited flexibility and

owner greatest control Owner limits cost and time saving opportunities Owner retains maximum control Design creativity is limited as a result of specified

equipment and finishes May expose owner to liability for performance and

delivery issues

Lesson Learned: Design-Build Offers Flexibility in Proposal Evaluation

Low Bid – price only Once prequalified, assume qualifications are equivalent Frequently followed on smaller projects where a

qualification proposal is not warranted The RFQ process is typically by invitation only based on the

owner’s past experience with Design-Builders Experience & Price

A point system can be developed for evaluating proposals Experience and price proposals submitted in separate

envelopes Qualifications are rated before opening and evaluating

price proposal to avoid influencing the qualification evaluation.

Example: Clearly Defined Evaluation Criteria (next slide)

Example: Clearly Defined Evaluation Criteria

Lesson Learned: A Successful Project Requires Design-Build Process

Design-Build Processes

Importance of specific design-build process is often overlooked

Traditional processes must be reinvented to handle typical characteristics of design-build

Design-build is often fast paced Design-build often includes concurrent

design & construction Design-build teams operate from many

locations Success requires a well organized,

documented process Team experience with design-build is critical

Submittals Require Effective Distribution & Clearly Defined Direction

The process must evolve as technology moves forward to encourage usage and participation

Encourages collaboration from all team members from various design disciplines, maintenance groups and operations personnel

Remote offices are included as if they were on-site Communication is faster, easier and more efficient The project will stay organized from procurement

through startup and training when comments are organized and the comment history is maintained

Submittals Require Effective Distribution & Clearly Defined Direction

Lesson Learned: Successful Design-Build Teams are Aligned

A Design-Build Philosophy Guides the Team to Make Decisions that Advance the Project

JCC leads project throughout the entire process to ensure there are zero accidents and project is on time and below cost

JCC will deliver value to the owner while containing costs and maximizing profits

JCC accepts the additional risks that come with design-build but is attracted to the opportunities to utilize our strengths in personnel, processes, and knowledge base to achieve exceptional client satisfaction

JCC will proactively address issues that threaten the safety of the project participants, conformity with project schedule, and economic return of the team

JCC will manage employees, subcontractors, vendors, suppliers, design professionals, quality control professionals, owner representatives, regulatory agencies and all other extended team members that influence the project success

Lesson Learned: Build Great Design-Build Teams

Design-Build Team Basics

The best teams are built to offer the best value to owners

Trust and cooperation will determine the success of the project

The reputation of team members is an important selection criteria Integrity Quality Safety

The Design-Build Contractor and Engineer will protect their quality reputation

Can the team demonstrate a history of success on past projects?

How have they handled difficult situations on past projects?

Have the Construction PM & Design PM worked cooperatively in the past?

Will the Construction PM and Design PM work well together?

Design-Build Team Success Factors

Lesson Learned: Efficiency and Speedin Execution

6th Street Water Treatment Plant

Completion of the project within regulatory deadlines required a fast-tracked construction schedule with

close coordination between team members

A fast-tracked project was required to accommodate treatment of a new raw water source

Black & Veach Construction, Inc. worked with United Water to permit and procure the selected equipment while selecting a design-build

contractor

The design-build approach saved time over preparing 100% drawings and specifications before contractor selection

6th Street Water Treatment Plant

Quantico Mainside TreatmentPlant Upgrade

A previous upgrade that had not addressed all treatment requirements and left the plant unable to meet permitted discharge limits. The design-build approach was selected under a special fast-tracked contract method to identify key issues and correct

them quickly and economically.

The RFP presented a brief engineering report highlighting areas which needed improvementThe successful team was to provide the most value for the available fundsThe project includes design, permitting, construction and commissioning of improvements, such as:Procurement was accelerated - shop drawings were requested within one week of contract execution based on contingent orders and verbal commitments. Owner Control – various equipment scope changes increased the time required to procure some equipment. These issues were incorporated into the procurement plan quickly; however, funding issues put strain on the schedule.

Quantico Mainside TreatmentPlant Upgrade

Quantico Mainside TreatmentPlant Upgrade (Chlorine Contact Tank)

Quantico Mainside TreatmentPlant Upgrade (UV Channels)

Lesson Learned: Collaboration/Innovation

Amber Meadows Pump Station

The design-build approach yielded creative solutions to seemingly impossible issues facing the upgrade of

an existing station with confined space issues, adjacent property boundary constraints and bypass

requirements.

Station located inside 20ft sewer easement

No right-away flexibility Adjacent roadway &

apartment complex

Amber Meadows Pump Station(Before)

Utilize suction lift pumps in lieu of submersibles

Utilize existing wetwell Minimize bypass pumping Eliminate confined space issues

Amber Meadows Pump Station(After)

Little Patuxent WRF – Dreyer’s Ice Cream

The additional of a major ice cream manufacturer in the service area required the fast-tracked upgrade of the

treatment process to handle high organic loading. CMAR was chosen to incentivize the team to provide a successful fast-tracked construction project in a collaborative setting

during the design and construction of the project.

Collaboration using an Alternate Delivery Method, CMAR, allowed the project to progress through design, permitting and construction with maximum input from all personnel

An open book approach was taken to cost estimating with owner and owners representative participating directly in the building of the estimate. An off-ramp was available if

a price could not be negotiated successfully.

Little Patuxent WRF – Dreyer’s Ice Cream

Lesson Learned: Sole Source Advantages

BIMC Sanitary & Storm Pump Station

The single source responsibility of design-build and a clear and concise proposal allowed the

maintenance contractor to upgrade aging infrastructure quickly.

A small scope should not deter an owner from pursuing design-build

Maintenance projects can be completed quickly – without major permitting

Design, specification, and drawing preparation are minimized A few projects were priced, not all were funded, and the

owner/maintenance contractor did not pay anything in design fees

BIMC Sanitary & Storm Pump Station

Deer Path Woods Pump Station

Small pump station project performed for a repeat client. The use of design-build reduced the overall project cost by taking advantage of single source responsibility and eliminating duplication found in

a traditional design and construction project.

Small projects are well suited to design-buildDesign costs can be minimized when a team has a history of working togetherCost savings are achieved when drawings are prepared by the installing contractor

Deer Path Woods Pump Station

Lesson Learned: Effective Use of Expertise

Northrop Grumman AIMS Pretreatment Plant

JCC and Siemens teamed to turnkey the pretreatment plant for a new printed circuit board manufacturing process. Selection of team members provided the ability to fast track a specialized facility.

Northrop Grumman AIMS Pretreatment Plant

The team provided the owner with a high quality turnkey solution Siemens is a leader in pretreatment technology for the printed circuit board segment and provided a system from their standard catalogue of products. This provided a high confidence level in the ability of the system to perform and allowed us to quickly progress the designJCC is a quality, regional design-build contractor with the ability to provide sole source responsibility and self perform all trades

Frederick SolidsHandling Upgrade

JCC and Buchart-Horn teamed to upgrade the digesters to accommodate ENR loading and restore usage after complete failure of the covers occurred. The team had prior knowledge of the digesters and plant operations and they had

done a design-build project to improve digester mixing on one of digesters previously.

Frederick Solids Handling Upgrade

The design-build team each brought significant expertise to the project to benefit the owner

WSSC Energy Conservation Measures

Building a team of specialists, JCC and BG&E, partnered to provide an energy performance project which upgraded failed equipment without using the

capital or operating budget.

WSSC Energy Conservation Measures

The Constellation Energy Division of BGE has the expertise to perform innovative energy performance projects which self fundJCC provided the expertise to price many Energy Conservation Measures (ECMs) based on conceptual estimates for evaluation by the ownerThe procurement method had not been applied to waste water treatment in the past - teamwork overcame those barriers

Sidebar: Design-Build Opportunities in Energy Performance Contracting

Energy Performance Contracting Provides Design-Build Opportunities

“Energy represents the largest controllable cost of providing water or wastewater services to the public. Most facilities were designed and built when energy costs were not a major concern. With large pumps, drives, motors, and other equipment operating 24 hours a day, water and wastewater utilities can be among the largest individual energy users in a community.” (Ensuring a Sustainable Future: An Energy Management Guidebook for Wastewater and Water Utilities)

Opportunities: Find the Low Hanging Fruit – Energy Usage is an Easy Target

Accounts for 3% of the TOTAL electric load in the US (CEE, 2007) Eighty percent of water treatment plant energy consumption goes

to pumping – raw water, high service, backwash, and distribution system boosters (EPRI 2002)

Drinking water and wastewater treatment consume up to 35 percent of a utility’s operating budget (Jacobs, Kerestes, and Riddle 2003/WRF)

Energy costs for water and wastewater can be 1/3 of a municipality's total energy bill (Ensuring a Sustainable Future: An Energy Management Guidebook for Wastewater and Water Utilities)

Electricity is the 2nd largest operating cost at WWTPs, ~25 to 40% of the total operating budget (PGE, 2003)

Loads expected to increase by 20% in next 15 years due to increased populations and more stringent regulations (Ensuring a Sustainable Future: An Energy Management Guidebook for Wastewater and Water Utilities)

Electricity accounts for ~80% of all water processing and distribution costs at WTPs (EPRI, 2002)

Action Areas

Takeaway: Opportunities for Action

Changes in regulations, aging infrastructure and new technology provide potential opportunities

Energy efficiency investments often have outstanding rates of return and can reduce costs at a facility by 5%, 10%, 25%, or more (Ensuring a Sustainable Future: An Energy Management Guidebook for Wastewater and Water Utilities)

Upgrades will SELF FUND though FUTURE ENERGY SAVINGS Additional projects may be incorporated using the excess

cost savings Suggest Incorporating ECMs into the strategic plan

ECMs often go hand-in-hand with increased efficiency ECMs often include increased capacity ECMs often include increased ability to meet effluent

limitations ECMs often reduce O&M requirements ECMs result in reduced energy costs

Questions?

Trey Johnston, PE, DBIA, President & CEO and Mike Geissler, PE, DBIA, Design-Build Manager