SIXTH ANNUAL AIRPORT PROJECT DELIVERY

SUMMIT

Best Practices – Airport Owner’s Share Experiences

David MaasDeputy DirectorSan Jose International Airport

Typical Delivery Method / Selection Options

Design-Bid-Build

CM at-Risk

Design-Build

DELIVERY METHOD Low Bid

Best Value:

Total CostBest Value:

Fees

Qualifications Based

Selection (QBS)

Competitive Sealed Bid; Low Bid; Inv. to Bid (IFB)

CM/GC; GC/CM; CMc; ECI

Engineer-Procure-Construct (EPC)

n/a n/a

IPD Not Typical

Not Typical

n/a

Multi-party; Alliancing

Common Nicknames

SJC n/a

n/a n/a

SJCn/an/aSJC

n/an/a

n/a

Some History – The Program in 2001$2.8 billion Capital Development Program

(completion 2010)

Serve 17.6 Million Passengers By 2010

6% Projected Passenger Growth

40 Gates Terminal Complex

Central Terminal, Terminal A Concourse Only

Double-Deck Roadway

14,000 Space Combined Rental Car/Public Garage

8,700 Space Long-Term Parking Garage

Approved Master Plan

Central Terminal Rendering

North Concourse Construction

$324 Million Budget

Design Bid Build – Multi-Prime Contracting

• 10 Packages

Program Manager – PB Aviation

Master Architect – Gensler

Agency Construction Manager – Gilbane

Owner Airport/Public Works

North Concourse PackagesSite prep and excavationFoundation, Structural Steel, Building EnclosureBaggage SystemsFit OutFF&ESignage & GraphicsShared Use IT SystemBoarding BridgesSecurity EquipmentEDS Procurement

DBB Multi Prime ExperienceGoal was to accelerate scheduleOwner Responsible to Manage Risk• Phasing• Constructability• Conflicts in drawingsRequires a lot of management by ownerNeed to set clear team roles and expectationsFormal PartneringNorth Concourse was ultimately on budget

Fast Forward to 2005Revised Forecast Projected 17.6 million passenger activity by 2017

Capital Development Program escalated to $4.2 billion

Activity Forecast 4% passenger growth

Competitive cost per enplaned passenger (CPE) between $8.00 - $9.00

Resulting Financial Model Supported a Capital Program of $1.5 billion

Community wanted Airport modernization

TAIP Goals

Meet the program needs of stakeholders

Complete Program as quickly as possible

Budget and Schedule Fixed

Adjust Scope as necessary

TAIP Program Scope

Temporary Terminal C and Future Removal (Dark Grey)

Terminal B – Phase I (Orange)

North Concourse (Yellow)

Terminal A Modifications (Green)

ConRAC (Purple) and Surface Parking (Grey)

Roadway and Overcrossings

Phase I Program Budget

Terminal C Renovation $ 26 millionTerminal C Demolition $ 10 millionTerminal A Modifications $ 105 millionTerminal B, Phase I $ 165 millionConRAC Garage $ 260 millionRoadways/Surface Parking $ 141 millionNorth Concourse $ 324 millionTerminal A/A+ Equity Upgrades $ 40 millionAll Other Program Costs $ 323 millionProgram Total, Phase I $1,394.0 million

Why Design Build?

Owner’s Requirements Design/Bid/BuildMultiple Prime Fast Tracked Design-Build

Save Money Best Choice

Save Time Good Choice Best Choice

Limit Changes Orders and Contractor Claims Best Choice

Creative Solutions to Achieve Schedule, Scope & Budget Objectives

Best Choice

Evaluation of Contracting Delivery Options:

Need For One Entity In Control of Constrained SiteDesign Builder Best Able to Manage Risk

– Design– Constructability– Escalation– Conflicts Between Project Elements

Maximize Construction Through Schedule Acceleration

Fixed Schedule & Scope, Variable ScopeConcern over control of quality

Decision to Use Design Build

Qualifications Based SelectionPre Advertise

– Web site– Exemplar Contract

Advertise– Single Point of Contact– Prequalification

RFP/Interview– Four Proposals– Three Interviewed

Criteria– Knowledge, Skills and abilities– Team structure & past working relationships– Past experience with Design Build & Airport work

Program Delivery Structure

Design-Builder - Hensel Phelps with Named Subs

Integrated City Management Team

Two Master Program Support Consultants

Cost Estimating Consultant

Financial Auditing Consultant

Airline Technical Representative

Co-Location of Design Builder and City Management Team

Design Build Contract Value

Original Contract $488,211,000City Controlled Contingency $ 24,560,000Original Contract (Not To Exceed) $512,771,000

New Scope • Amendment 1 – ConRAC $105,274,000• Amendment 2 – ConRAC $ 13,000,000• Amendment 3 – Terminal A Equity $ 27,933,000• Change Orders (10%) $ 8,996,000Subtotal Amendments to Contract $155,203,000

Total Revised (Not To Exceed) $667,974,000

Total Value of $513 Million

Task Order Based

Off ramps at 30%, 60%, and 100% Design

Guaranteed Max Price Task Orders

Shared Savings on Contractor Contingency

Schedule Incentives/Liquidated Damages

Fixed Fee

Contract Terms

Open Book Auditing

Project Labor Agreement

Subcontracting Plan

Dispute Resolution

Owner Controlled Insurance Program

Contract Terms

Authority to Execute Task Orders

Authority to Use Program Reserve

Authority to authorize Owner Controlled Contingency

Single Appropriation For TAIP

Transparency - Regular Reporting To Council & Stakeholders

Delegation of Authority

Program Validation Process

The Unit Terminal Scheme– Slide Terminal B North Wrap NC– Eliminate a Temporary Terminal C

Create an Airside Expansion at Terminal A– Move BHS to under Expansion– Consolidate Security Checkpoint – Provide a Better Flow through Terminal A

Owner’s Perspective

Drives a paradigm shift in management and staff thinking

Requires a strong belief in (and the practice of) the principles of partnering.

Demands a keen focus on teamwork.

Requires a trust in your teammates from the onset. (Ronald Reagan: “Trust but verify”.)

Owner’s Perspective

Work is completed more quickly

Reduces “finger-pointing”. Contractor and designer are contractually bound rather than independently contracted to the Owner.

Contractor (not the Owner) must work with designer to quickly resolve issues.

Owner must be willing to surrender control once the GMP is signed. Requires good Program Criteria Documents (PCDs) and initial plans (30%).

Owner’s Perspective

Designer lacks strong cost estimating skills. Contractor compensates with extensive construction cost history and job experience.

Having the Contractor “in the room” brings needed focus to phasing, constructability, budget and schedule.

Results in a smaller Owner Management Team which reduces the Owner’s costs.

Good Program Controls are essential

Interface of owner held contracts have to be well managed

Need for contingency limits scope

Final Thoughts• As the Owner you must consider your tolerance for risk.

• Selection Process:- Confirm demonstrated prior Design-Build experience- Evaluate prior Owners’ experiences with the design-build

contractor- Assess the contractor’s past relationship with the proposed

designer and contractors/subcontractors- Ensure only one Prime Contractor- Ensure Contractor and Subcontractors are not also the Designers- Architect of Record must control all of the engineers and specialty

firms contributing to design

• Fix the Contractor’s fee for the overall project during contract negotiations.

Final Thoughts

Co-locate Owner and Design-Build Team to fast track the project by streamlining communications between all design-build participants.

Understand and be prepared to meet the time demands/turn-around times required of you as the Owner to achieve your schedule objectives

Work to gain delegated authority and control all aspects of the procurement process

Final Thoughts

To ensure integrity of the design intent designer must be involved in all meetings, discussions and value management sessions affecting scope, budget & schedule.

Ensure senior-level Owner participation during design to maintain the project’s fast pace.

Ensure “design-build” concept buy-in. If the Owner manages the project with a “design-bid-build” mentality relationships will become strained and progress slowed.

Stakeholder involvement essential for timely decision-making.

Summary - Design-Build Value Added

The terminal, garage and roadway projects completed below budget and ahead of schedule.

The Design-Builder assumed a much greater role in managing the design effort thus reducing City staff costs.

Program Completed under budget

Disruption to passengers & airlines minimized

Airlines and community satisfied with facilities

Terminal B

Terminal Zone

SIXTH ANNUAL AIRPORT PROJECT DELIVERY

SUMMIT

Best Practices – Airport Owner’s Share Experiences

David MaasDeputy DirectorSan Jose International Airport