ARIZONA DEPARTMENT OF TRANSPORTATION
OFFICE MEMO
January 11, 2002
TO:
|
EDWARD D. WRIGHT
State Engineer, 102A |
FROM:
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RONALD C. WILLIAMS
Assistant State Engineer
Construction Group, 172A |
RE:
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2001 Status Report of the Design-Build Process
In Accordance with A.R.S. 28-7363 |
Senate Bill 1253 (1996) established A.R.S. 28-7362 to authorize Design-Build contracting and went into effect July 1996. House Bill 2651(1998) modified the process and went into effect August 1998. In 2000 House Bill 2340 established design-build as a permanent program in statute for the Arizona Department of Transportation (ADOT), counties, cities, and other parties to be used by ADOT procurement agents and others. Minor modifications to he Design/Build Program were made in 2001 through House Bill 2425.
I am pleased to report exceptional progress on implementing the design-build process within the Arizona Department of Transportation. This report fulfills the requirements of A.R.S. 28-7363.
EXECUTIVE SUMMARY
The principal benefit received from using the Design Build method of construction is SPEED of construction and early completion of projects. In 2000, the widening of Interstate 17 in Phoenix between Thomas Road and Peoria Avenue was completed in 610 days, approximately one year earlier than estimated by ADOT. To complete all this work by the conventional design-bid-build method would have required 5 years instead of the 21 months used for completion. This resulted in a cost savings of lost time to delayed motorists of $1,600,000. Based upon ADOT average closing costs of projects, this project was completed at a cost of 6 percent lower than design-bid-build projects. This represents a SAVINGS OF APPROXIMATELY 5 MILLION DOLLARS.
Construction Work is nearly complete on converting 13.5 Miles of State Route 68 between Kingman and Bullhead City to a four lane divided highway from the existing two lane highway. This project will be completed 1-½ years sooner than through use of conventional construction. Final completion will be Spring of 2002. A SAVINGS OF APPROXIMATELY $2-3 MILLION IS ANTICIPATED.
Bid proposals were received for the widening and addition of High Occupancy Vehicle (HOV) lanes to U.S. 60 (Superstition Freeway) and addition of High Occupancy Vehicle (HOV) lanes to US 60(Superstition Freeway) between Interstate 10 and Val Vista Road. This project also includes construction of a major structure to connect the HOV lanes of Interstate 10 to U.S.60. The estimated cost of this project was $255 million, the largest in ADOT history. The successful proposer, Granite²Sundt a Joint Venture, submitted a price of $184,292,800.00. This represents a SAVINGS OF $70 MILLION under estimated cost. The contractor submitted a completion time of 25 months, eleven months quicker than ADOT estimates and a full three years ahead of conventional design and construct methods. This will alleviate one of the most congested freeway sections on the highway system.
Details of these projects are included in a following section of this report.
There are benefits to using the Design Build process, the principal one being speed of construction, design, and construction cost savings, savings in contract administration, and tremendous reductions in motorist delay. ADOT will continue to use this method in appropriate situations where these benefits will be realized.
BENEFITS AND SAVINGS
The most recent survey of motorists revealed that speed of construction in transportation projects is their number one desired improvement. The Design Build method of construction provides this improvement.
In Phoenix the I 17 widening was completed in just 21 months, resulting in a cost savings of $1.6 million of motorist delay which did not occur. Also two major automobile dealers and other commercial activities on major city cross streets were only inconvenienced the minimum time needed to speedily permit reconstruction of the interchanges.
In Mohave County, it is anticipated a savings of 1½ years will occur in the reconstruction of State Route 68. Final cost will be approximately 5 percent lower than a conventional Design-Bid-Build project.
In Tempe and Mesa, reconstruction and widening of US 60 will be completed in 25 months instead of five years. Completion is anticipated to be July 2003.
Costs of Procurement are estimated to be less than conventional methods. There is a major difference in the procurement methods. Under conventional design – bid-build methods a design concept report is prepared, complete plans and specifications are developed, a contract bid package is prepared and the projected is constructed. Under Design Build the plans preparation is not an ADOT activity and plans are developed simultaneously with construction activities by the Design Build contractor. With all parties providing immediate input into plans preparation repetition and duplication are avoided and engineering firms involved in this activity have informed us plans are prepared more economically than when conventional systems are used.
Administrative costs on this type of Design Build construction are reduced. In addition to the speed of construction which reduces time of inspection, smaller engineering crews are needed by ADOT as quality responsibilities and documentation are contractor responsibilities. The payment method is established as lump sum with agreement as to monthly payments being developed from contractor’s critical path work item schedule . Work completed each month is agreed upon by the project managers of both ADOT and the contractor and payment is made. A very detailed and lengthy conventional monthly payment estimate developed by ADOT and normally used has been limited from the process, eliminating numerous office personal work time. On this project Construction Engineering expenses were 5%, approximately 1 to 2 per cent lower than normal
This process is only successful with constant close teamwork, consensus development and issue resolution. As a result the need for supplemental agreements has all but been eliminated. On the I 17 project, value of $89 Million , only 16 Change Orders were needed. On a project of this magnitude normally 60 or more change orders may be necessary. At an administrative processing cost of $1500 per change order, this savings alone was approximately equal to $66,000.
It appears there are actual hard cost savings by using this method. There is definitely more risk assigned to the contractor, however extreme care is taken by ADOT to fully define the scope of work required, attempting to keep risk at a minimum. Engineering staffs assigned to these projects are carefully selected to provide the best experience possible. It is known that costs incurred are within normal expected construction practices. All issues are resolved by project personnel through ADOT’s Partnering Program and there are no expenses involved in settling claims The I-17 project was completed 5% over bid amount with most increases caused at ADOT’s request. Conventional projects finish approximately 10 percent above bid costs, considering all contract supplemental agreements. These same savings are anticipated on other projects underway.
PROJECT DETAILS
Under the two-step selection process six proposals were received in June 1998. Three firms were selected to submit a full technical proposal which we received on October 16, 1998.
Price proposals were opened on November 13, 1998 and adjusted by technical evaluation score. The project was awarded in December by the Transportation Board. The state had estimated construction will take 30 months but the proposal indicated the project would be completed in 21 months. This completed all the work on Interstate 17 three years ahead of the current schedule.
The concept of “a +b” (cost + time) bidding was used in selecting the low bidder. Each bidder figured the shortest time in which he can build the job, multiplied that number of days times a daily value of $16,000 per day and added that to his cost to determine his job cost for selection purposes. This value was divided by the technical proposal score to determine the Best Value lowest bidder.
Eight incentives were built into this contract to alleviate customer (motorist) inconvenience:
Quick Opening of Camelback Roads and Glendale Avenues
Placing Auxiliary Lanes into operation.
Placing New lighting into operation.
Operating a Superior Public Relations Program.
Providing Superior Construction Quality Management Performance
Smoothness of Asphalt Surface
Additional thickness of Portland Cement Concrete Pavement
Additional strength of Portland Cement Concrete Pavement
