April 23, 2024
4:00 p.m.
In Chambers
Council Chambers
99 E. Ramsey Street
Banning, CA 92220
1. CALL TO ORDER
2. PUBLIC COMMENTS - Agenda Items Only
3. WORKSHOP ITEMS
3.1 Discussion Regarding the Progressive Design Build Delivery Method for the Wastewater Treatment Plant Project
4. ADJOURNMENT
AGENDA
SPECIAL CITY COUNCIL MEETING (WORKSHOP) OF THE BANNING CITY COUNCIL
CITY OF BANNING, CALIFORNIA
The following information comprises the agenda for the regular meeting of the Banning City Council, a joint meeting of the City Council and Banning Utility Authority, and the Banning City Council sitting in its capacity as the Banning Successor Agency Board.
Per City Council Resolution 2016-44, matters taken up by the Council before 10 p.m. may be concluded, but no new matters shall be taken up except upon a unanimous vote of the council members present and voting. Such an extension shall only be valid for one hour and each hour thereafter shall require a renewed action for the meeting to continue.
Recommendation: Receive and file.
AFFIDAVIT • DECLARACIÓN JURADA
IT IS HEREBY CERTIFIED under the laws of the State of California that the above agenda was posted on the City's website (www.banningca.gov) as well as the Bulletin Board at Banning City Hall, located at 99 E Ramsey Street, Banning, CA 92220, at least 24 hours in advance of the meeting.
__________________________
Caroline Patton, Administrative City Clerk
Secretario adjunto de la ciudad
Special City Council Meeting (Workshop) Agenda
April 23, 2024
1 PUBLIC NOTICE • NOTICIA PÚBLICA
Meeting Agendas and Notices
Interested in receiving email and/or text notifications of upcoming City Council meetings? Sign up for meeting notifications through the City's website. Pursuant to amended Government Code §54957.5(b), staff reports and other public records related to open session agenda items are available on the City's website (www.banningca.gov/).
Public Comment
Agenda Items
Any member of the public may address this meeting of the City Council on any item appearing on the agenda. A five-minute limitation shall apply to each member of the public and no member of the public shall be permitted to share their time with any other person.
Non-Agenda Items
Any member of the public may address this meeting of the Council on any item which does not appear on the regular meeting agenda but is of interest to the general public and is an item upon which the Council may act. A three-minute limitation shall apply to each member of the public and no member shall be permitted to share their time with any other person. No action shall be taken, nor discussion held by the Council, on any item which does not appear on the agenda, unless the action is otherwise authorized in accordance with the provisions of subdivision (b) of §54954.2 of the Government Code.
Special Assistance/Accessibility Requests
In compliance with the Americans with Disabilities Act, any member of the public may request that the agenda and agenda packet be mailed to them. If you need special assistance to participate in this meeting (such as translation services), please contact the City Clerk's Office. Advanced notification of at least 48 hours prior to the meeting will allow the city to make arrangements to ensure your accessibility.
¿Necesita servicios de traducción para participar? Contacto Oficina del Secretario de la Ciudad.
CONTACT • CONTACTO
City Clerk's Office | 951-922-3102 | [email protected] 99 East Ramsey Street, Banning, California 92220
Special City Council Meeting (Workshop) Agenda
April 23, 2024
2 CITY OF BANNING
STAFF REPORT
TO: CITY COUNCIL
FROM: Douglas Schulze, City Manager
PREPARED BY: Art Vela, Public Works Director
MEETING DATE: April 23, 2024
SUBJECT: Discussion Regarding the Progressive Design Build Delivery Method for the Wastewater Treatment Plant Project
RECOMMENDATION:
Receive and file.
BACKGROUND:
The City of Banning Wastewater Treatment Plant (WWTP), also known as the Water Reclamation Facility, provides for the collection, treatment, and disposal of municipal sewage. The City has recognized that the WWTP is in need of capacity and treatment improvements in order to keep up with the City’s growth as well as to produce recycled water supply to bolster it’s water supply portfolio and to meet impending wastewater effluent discharge quality permit requirements.
On December 13, 2022, the City Council approved Resolution 2022-14UA, “Awarding a Professional Services Agreement to N2W Engineering to Provide Owner Advisor Services and Preliminary Engineering for the Wastewater Treatment Plant Improvement Project.
N2W and staff has met to discuss the potential delivery methods for the project including: Design-BidBuild, Fixed Price Design-Build and Progressive-Design-Build (PDB). After discussing and rating the alternatives staff has determined that the PDB delivery method would provide the best results in the shortest amount of time.
The purpose of this workshop is to introduce City Council and the public to the PDB approach.
JUSTIFICATION:
The Wastewater Treatment Plant Improvement project includes the design and construction of major complex treatment technologies that will allow the City to comply with impending wastewater discharge requirements and to produce recycled water. A PDB approach is a collaborative delivery method that involves the design-builder throughout the design and construction process resulting in a project that will meet the City's needs for the best value.
FISCAL IMPACT:
None related to this workshop. Fiscal impacts of the project will be presented to City Council at a later date.
ALTERNATIVES:
Not applicable.
3 ATTACHMENTS:
1. PDB Primer.pdf
2. PDB Fact Sheet.pdf
3. PDB Frequently Asked Questions.pdf
4. California-2021-SB991-Chaptered.pdf
5. PDB vs FDB vs DBB.pdf
4 Progressive Design-Build
1 Progressive
Design-Build
A Design-Build Done RightTM Primer
Design-Build Procured with a Progressive Design & Price 5 Progressive Design-Build
2 Progressive Design-build
Design-Build Procured with a Progressive Design & Price
A DESIGN-BUILD DONE RIGHTTM PRIMER
Background
Design-Build Project Delivery
Design-build has been used in the private sector for
decades, particularly in the industrial and process
industries (often known as EPC or engineeringprocurement-construction). In executing their designbuild projects, private sector owners typically contract with their design-builders early in the project’s life. They not only want to take full advantage of the designbuilder’s expertise, but also want to work collaboratively with the design-builder to develop a design that meets
the project’s goals. Recognizing the benefits of having the best team working on their behalf, private sector
owners typically select their design-builders primarily on qualifications. While most private sector owners
ultimately expect their design-builders to provide price, schedule and performance commitments, they defer
obtaining these commitments until after the design has
been sufficiently defined — enhancing the opportunity
for collaboration, teamwork and the likelihood of
project success. Once the parties have negotiated and
agreed upon the commercial terms of their relationship, the owner can be more assured that the design-builder’s commitments will be honored — the design-builder’s
continuum of involvement creates ownership and leads
to reliable commitments. The concept here is that the
design-builder helps create it and will therefore support it. This effort essentially aligns expectations up front before executing the work of design and construction,
thus significantly reducing the misaligned expectations for scope, cost and schedule between the owner and
design-builder.
Although public sector owners have embraced designbuild since the late 1990s, they often approach their design-build relationships differently than most private sector owners. Public sector owners oftentimes require
that a final project price be established at the time
the design-builder is selected, demonstrating how
they will meet the owner’s requirements within the
established budget.
In reviewing this primer keep in mind that “project
delivery” is a comprehensive process including
planning, programming, design, construction
and consideration of operations and maintenance
required to execute and complete a building facility
or other type of project. When choosing design-build
project delivery, an owner can choose from among
various approaches for “procurement” and “contracting”
as outlined on page 5. Design-build utilizing a
“progressive” procurement and contracting approach is
the basis of this primer.
Regardless of the design-build approach selected,
industry studies have shown that projects delivered
through design-build perform far better in terms of cost, quality and schedule than those using design-bid-build
and construction management at-risk. Throughout this
primer you’ll see reference to the term Design-Build
Done Right™. This refers to design-build performed
according to DBIA Best Practices, regardless of the
procurement or contract approach.
Photo credit: Veterans Memorial Bridge in Martin County, Florida 6 Progressive Design-Build
3 What is Progressive Design-Build?
design development, preconstruction services and the
negotiation of a firm contract price (either lump sum
or guaranteed maximum price) for Phase Two; and (b)
Phase Two including final design, construction and
commissioning.
Phase One Services are also called Preliminary or
Preconstruction Services. The design-builder first
collaborates with the owner and its consultants to create or confirm the project’s basis of design, programming
requirements and then advances that design. Design
and other project decisions are based on cost, schedule, quality, operability, life cycle and other considerations, with the design-builder providing ongoing, transparent
cost estimates to ensure that the owner’s budgetary
requirements are being achieved. At the point in time
where the design has been advanced to an appropriate
level of definition that aligns with the owner’s
requirements, the design-builder will provide a formal
commercial proposal (including the overall contract
price) for Phase Two services. The proposal is often
established when the design is approximately 40 to 60
percent complete, but it can occur anytime (including as One application of design-build delivery is via a
stepped, or progressive process (commonly referred
to as Progressive Design-Build or PDB). PDB uses
a qualifications-based or best value selection,
followed by a process whereby the owner then
“progresses” towards a design and contract price
with the team (thus the term “Progressive”).
While procurement laws vary for public owners, some
have the flexibility to implement a PDB procurement
approach that essentially replicates that used by private sector owners. PDB core features include the following:
l The design-builder is retained by the owner early in
the life of the project and, in some cases, before the
design has been developed at all.
l The design-builder is generally selected primarily,
if not exclusively, on qualifications and the designbuilder’s final project cost/price and schedule commitment is not established as part of the selection
process.
l The design-builder delivers the project in two distinct phases with: (a) Phase One including budget level
7 Progressive Design-Build
4 late as 90 to 100 percent design completion), depending on the amount of control the owner desires to maintain
over the design definition.
Phase Two Services are also called Final Design and
Construction Services. Once the owner and designbuilder agree upon commercial terms (including the project’s price and schedule), the design-builder will
complete the design and construction of the facility
in accordance with those commercial terms. The
design-builder will also be responsible for any testing, commissioning, and other services that have been
agreed upon.
If, for any reason, the parties cannot reach agreement
on the Phase Two commercial terms, then the owner
may consider an “off-ramp” option — where it can use
the design and move forward with the project through
another contract strategy.
As discussed more later, a PDB relationship can be
established with the parties entering into two separate contracts for each phase of work or a single contract that covers both phases. Also, while there appears to be a
“bright line” between Phase One and Phase Two Services, the pragmatics of expediting project schedules often
require that some Phase Two work be started before the
commercial proposal has been agreed upon. As a result,
many PDB projects allow the design-builder to proceed
on “early work” packages for discrete elements of the
physical work (e.g., procurement of long lead items,
demolition or site work) before Phase Two authorization.
Terminial 2, San Francisco International Airport
Why Would an Owner Choose PDB?
Owners with flexibility as it relates to procurement laws may find the following value-added with PDB:
l Streamlines and simplifies the procurement process,
which encourages competition and has a schedule
benefit to the project — benefiting both the owner
and the design-builder.
l Enables the owner to provide substantial input on
the design and buyout decisions, as it collaborates
with design-builder during design development and
buyout (excluding key trade partners).
l Lessens pressure from the owner in terms of the time
required to review and act upon design submittals, as
this is typically being done during Phase One, before
the contract’s commercial terms (including contract
price and schedule) have been guaranteed by the
design-builder.
l Shortens the overall project schedule with a quicker
procurement process and opportunity to use early
work packages in phasing the work.
l GMP offers the owner transparency into the designbuilder’s proposal cost (including the pricing for risk and contingencies) and the ultimate cost for final
design and construction.
l Offers the owner an “off-ramp” should the owner fail to accept the design-builder’s price or other commercial
terms.
l Provides a collaborative way to establish “single point of responsibility” and eliminate an owner’s Spearin
Doctrine liability risk.
While all the above attributes can be important, PDB is an excellent option when an owner wants to use designbuild but remain actively involved in the design decisions. “One application of design-build
delivery is via a stepped, or progressive
process (commonly referred to as
Progressive Design-Build or PDB). PDB
uses a qualifications-based or best value
selection, followed by a process whereby
the owner then ‘progresses’ towards a
contract price with the team (thus the
term ‘Progressive’).”
8 Progressive Design-Build
5 Potential Obstacles to PDB?
Despite the positive attributes, there are several reasons that a public owner may not be interested in, or even
able to use, PDB. Among these reasons are the following:
l Restrictive procurement regulations. If the public
authority has the ability to use qualifications-based
selection (QBS), PDB can be an optimal choice.
However, if the procurement regulations only allow
for the typical two-phase best value source selection
process, PDB may not be permissable.
l Awarding without full competition on the overall
design-build contract price. PDB calls for the
owner to select the design-builder largely on the
basis of qualifications, without the benefit of price
competition on the overall design-build contract
price. Some owners find awarding a construction
contract without full price competition to be
politically impractical, and prefer to have price
factored into the selection process. They may also
feel uncomfortable in negotiating the commercial
terms of the arrangement.
l Exercising the “off-ramp”. Owners may be
uncomfortable in exercising the “off-ramp” in
the event the parties cannot reach commercial
agreement on the design-builder’s proposal.
l Subcontractor procurement challenges.
Procurement regulations may require subcontractors
to be procured competitively. This can limit
collaboration and deprive the project of valuable
subcontractor input during the design process.
l Lack of interest in changing approaches. Owners
may feel that the best value design-build process
works well and that there is no reason to try
something different.
The PDB Procurement Process
9 Progressive Design-Build
6 As with any variation of design-build, when an owner
decides to use PDB, it should have a single fundamental procurement objective — select the right team, using
a process that is as streamlined and simple as possible based upon applicable regulations. Who is the right
team?
l The team that will work well and collaboratively with the owner.
l The team that offers the best chance to meet the
owner’s project goals and required outcomes.
l The team that the owner believes is trustworthy, fair, qualified and transparent.
In accomplishing this objective, an owner will either use pure QBS processes or best value selection processes,
typically by looking at what is prescribed by its
procurement regulations.
QBS is based solely on non-price selection factors,
such as qualifications and past performance of the
team members, key trade partners and key personnel,
project approach and creativity. No price information
is evaluated whatsoever. Under QBS, some owners
may ask for price information on items like the Phase
One compensation or the design-builder’s fee. This
information will be in a separate submission from the
qualifications/technical proposal, but unlike a best
value procurement, it will not be evaluated as part of
the selection process. Instead, the owner will open this submission only after determining the winning designbuilder, and will use this information for negotiating the contract with that design-build entity.
Best value selection chooses the design-builder based
on both non-price and price factors. Because the entire design-build contract price is not under consideration, the types of price factors are limited — such as the
Phase One compensation and design-builder’s fee noted
above. Because these are relatively small dollar values in relation to the ultimate design-build contract price, the weighting for the price factors is generally quite low (e.g., 5 to 20 percent or treated as a trade-off and not weighted at all as with the federal model) in comparison to the non-price factors.
There are several procurement decisions an owner
needs to make, regardless of whether using QBS or best
value selection. One is whether to conduct a one-step
or two-step selection process. One-step can be quite
efficient for QBS, particularly if there is little technical information being asked of the proposers. One-step
is not appropriate if the deliverables required from
proposers are substantial.
Two-step is more typical for QBS on complicated
projects or best value selection, as proposers will
be spending time and resources to respond with
more detailed technical proposals and owners must
thoroughly evaluate these proposals. The two-step
process contemplates the development of a shortlist
(typically the three most highly qualified teams), largely based on corporate qualifications and past performance, key trade partners and resumés of key personnel. The
second step contemplates the submission of technical
proposals, with the proposal focusing on what the
owner needs to meet its objective of selecting the right team. Proprietary one-on-one meetings are often used
in two-step processes. It is an excellent way to have
confidential discussions about ideas developed by the
proposers and get a sense of how proposers interact
within their team, as well as with the owner’s team.
Whether the owner uses a one-step or two-step process,
there is a strong benefit in the owner conducting formal interviews. After all, because the point of all integrated design-build project delivery is to get the right team on board, the owner should have an ability to assess how
that team presents itself.
Photo credit: Champion Petfoods Kentucky DogStar® Kitchens in Auburn, Kentucky The PDB Procurement Process
10 Progressive Design-Build
7 Contract Issues Unique to PDB
There are some important differences with PDB
contracts. The first difference is the form of contract.
Some owners will start their contractual relationship
with the design-builder with a Phase One Agreement
which, as the name indicates, just covers the Phase
One Services. They find that this streamlines getting
the design-builder under contract. Such owners
are comfortable with developing and negotiating
another contract, for Phase Two Services, as part of the commercial proposal process. Other owners prefer to
have a single design-build contract that addresses both Phase One and Phase Two Services and is signed at
the start of their relationship with the design-builder.
Among other benefits, this approach can make it easier
to execute early work packages, as the terms and
conditions related to procurement and construction are
already covered by the contract. For example, DBIA’s
Document No. 545, Progressive Design-Build for Water/
Wastewater Projects, uses a single design-build contract approach.
Regardless of which approach is used, the parties are
advised to focus on the preliminary services part of the relationship, as elements of that work go to the heart
of the PDB relationship. Topics that are commonly
addressed include:
l Scope of Phase One work, including cost
modeling. The contract (often through an exhibit)
will specifically state what work the design-builder
will perform for Phase One, including the extent and
frequency of cost estimating and modeling.
l Ability of the design-builder to use and rely
upon owner-furnished information. Because
the design-builder is getting involved early in the
design process, there is a question as to how to
treat information obtained by the owner before
the design-builder was involved (like geotechnical
reports and technology decisions). Working
collaboratively, most owners and design-builders
make informed decisions about the cost-benefit of
having the design-builder validate previously done
studies and then treat findings appropriately in the
contract.
l Early work packages. The contract should address
the processes for developing and authorizing
early work packages. This includes procuring
subcontractors, evaluating self-performance of the
design-builder and determining how to proceed if
the owner exercises the “off-ramp.”
l Design-builder self-performance. The contract
will address the applicability of self-performance,
particularly in relation to subcontractor procurement
requirements.
l Subcontractor and vendor procurement and their
involvement in Phase One. The contract should
address how (and when) subcontractors and vendors
will be procured and the owner’s role in that process.
This may be heavily influenced by statute. Likewise,
the parties need to address the role that these parties may play in Phase One and how this relates, if at all,
to their involvement in Phase Two.
l Commercial proposal. This important element of
Phase One should be thoroughly addressed in the
contract, particularly in terms of the form of the
proposal and information that the design-builder is
to submit.
l Off-ramp. The option for an owner to consider an
“off-ramp” should be clearly addressed, including the
rights of the owner to use Phase One information
for subsequent procurements associated with the
project.
Finally, the parties need to determine the process for
obtaining performance and payment bonds from the
design-builder. Work and prices are being established
a number of different times — Phase One, early work
packages and Phase Two. Often the bond will be
provided once construction starts, although some
owners will require a bond at the contract inception
(Phase One) and have the penal sum increased as work
is added. Parties should consult with legal counsel and bonding consultants on the best way to approach.
11 Progressive Design-Build
8 Preparing to Implement PDB:
Helpful Tips
As with design-build, an owner should carefully consider what it needs to make the PDB process successful. A few suggestions are as follows:
1. Assess the appropriateness of PDB for the project.
Owners should gain a full understanding of PDB and
conduct a proactive/objective assessment of the
characteristics of its project and determine if PDB is
the appropriate delivery method for its project.
2. Understand procurement limitations. While some
public sector owners have a clear ability to use QBS,
most public sector owners are required to consider
price within the source selection process. Likewise,
many owners are required to comply with statutes
that address subcontractor procurement. It is critical
for the owner to fully appreciate its procurement
opportunities and limitations in formulating a
procurement plan, and engage experienced in-house
or outside legal counsel to facilitate.
3. Have a strong cost estimator on your design-build
team. Conceptual cost estimating is an important
and difficult skill. The owner needs to ensure that
the design-builder has competent resources in
this regard, allowing seamless evaluation of the
reasonableness of the design-builder’s cost modeling
and price proposal.
4. Make an early decision on subcontractor
procurement and design-builder selfperformance. These issues can be major factors in determining whether organizations are interested
in competing. Moreover, if the owner decides that
it wants to have most, if not all, subcontractors
competitively procured, this issue could influence the
ability to obtain collaboration and design innovation,
given that subcontractors are often the repository of
such knowledge.
5. Ensure that your team is willing and able to
collaborate and trust. While any form of designbuild requires collaboration, flexibility and trust, these factors are often the very essence of why an
owner has chosen PDB. The owner’s team members
should understand the importance of collaboration,
and senior management needs to ensure that
collaboration and integration is supported and
carried out throughout performance of the project
delivery process.
A Word About
Design-Build Done Right™
As discussed above, the principles of Design-Build Done Right™ apply to all variations of design-build, including PDB. PDB is another “tool in the toolbox” for owners, and, consistent with Design-Build Done Right™ principles, the owner needs to make an informed decision as to which
approach is most appropriate for its needs.
Regardless of which approach is used, experience
shows that project success is predicated on the parties using the principles expressed in Design-Build Done
Right™ such as: (a) selecting the most qualified team;
(b) letting the design-builder use its ingenuity and
experience to develop design solutions; (c) weighting
price significantly less important than non-price
factors; and (d) seeking best value solutions, such as
energy efficiency, durability, sustainability and ease of maintenance.
Design-Build Done Right™ teaming philosophies of
integration and collaboration, as well as environments
based on trust and flexibility — characterized by
integrity and honest communication and mutual
respect for and appreciation of diverse perspectives and ideas, are also critical to design-build success.
Stated simply, if a project team can operate in accordance with Design-Build Done Right™ values, there is a
significantly improved likelihood of superior project
outcomes under design-build of any variation, including PDB.
DBIA endorses all variations of design-build when
done according to best practices and not on a pure
low-bid basis. The approach selected depends on the
application and needs of the owner.
12 Progressive Design-Build
9 “DESIGN-BUILD DONE RIGHT™” AND CERTIFICATION
Certification provides the only measureable standard by which to judge an individual’s understanding of "design-build done right.”
DBIA certification in design-build project delivery educates owners as well as designers and builders on teamcentered approaches to design and construction. Owners want successfully executed design-build projects and are looking for a demonstration of both relevant continuing education and experience — both of which can be gained through DBIA certification.
DBIA offers t wo t ypes of Cer tification.
Attaining the DBIATM requires from two to six years of hands-on experience of pre and post-award design-build. Credential holders who display “DBIA” after their names come from traditional design and construction backgrounds; they are private or public sector architects, engineers and construction professionals. Some attorneys and academic practitioners who specialize in design and construction generally and design-build specifically may also fulfill the DBIA™ requirements.
Unlike the DBIATM credential, obtaining the Assoc. DBIATM does not require hands-on field experience. Instead, this credential is focused on three key types of individuals who possess a different type of experience: (1) pre-award professionals focusing on critical aspects of the design-build process such as business development and acquisition/procurement; (2) seasoned professionals who are new to design-build project delivery, but not new to the design and construction industry; and (3) emerging professionals such as recent college graduates with relevant educational background in the AEC industry.
For more information, visit w ww.dbia.org/get-certified
DESIGN-BUILD
PROFESSIONAL
13 Progressive Design-Build
10 Additional Resources
DBIA Manual of Practice
DBIA Standard Form of Contracts
DBIA Universally Applicable Best Practices
DBIA Sector Specific Best Practices
Choosing A Project Delivery Method
DBIA Position Statements
...and much more
Can be found at dbia.org
14 Progressive Design-Build
11 MISSION:
DBIA promotes the value of design-build project delivery and teaches the effective integration of design and construction services to ensure success for owners and design and construction practitioners.
VISION:
DBIA will be the industry’s preeminent resource for leadership, education, objective expertise and best practices for the successful integrated delivery of capital projects.
VALUES: • Excellence in integrated design-build project delivery, producing high value outcomes. • An environment of trust characterized by integrity and honest communication. • Mutual respect for and appreciation of diverse perspectives and ideas. • A commitment to innovation and creativity to drive quality, value and sustainability. • Professionalism, fairness and the highest level of ethical behavior. 15 DESIGN-BUILD DONE RIGHTTM
PRIMER
A DESIGN-BUILD INSTITUTE OF AMERICA PUBLICATION
Copyright © October 2017
DBIA extends a special thanks to all of the industry leaders who helped shape this document. A special thanks is extended to the following key authors:
Michael C. Loulakis, Esq., DBIA
President/CEO, Capital Project Strategies, LLC
Reston, Virginia
Peter Kinsley, DBIA
President, Infrastructure & Transportation
The Haskell Company
Jacksonville, Florida
Geoffrey W. Neumayr, SE, P.E.
Deputy Airport Director, San Francisco International Airport San Francisco, California
Craig H. Unger, DBIA
Principal, Unger Security Solutions
Knoxville, Maryland
And The Progressive Design-Build Task Force
Cover Photo Credit
Air Traffic Control Tower, San Francisco International Airport 16
PROGRESSIVE DESIGN-BUILD
NOW AVAILABLE TO WATER
SERVICE PROJECTS
PROGRESSIVE DESIGN-BUILD (PDB)
PROCUREMENT DESIGN/PRECON
CONSTRUCTION CONTRACT 1
CONSTRUCTION MANAGEMENT AT RISK (CMAR)
PROCUREMENT DESIGN
PROCUREMENT DESIGN/PRECON
CONSTRUCTION CONTRACT 2
CONTRACT 1
DESIGN-BID-BUILD (DBB)
CONTRACT 1
CONTRACT 2
PROCUREMENT DESIGN
BID PROCUREMENT CONSTRUCTION
Bene ts of Progressive Design-Build · Balanced Risk Allocation · Efficient Timeline · Cost Transparency
OWNER ENGINEER CONTRACTOR DESIGN-BUILDER
A Milestone for California Water Agencies
Local water and wastewater agencies in California are now better equipped to deliver essential water projects more efficiently and cost-effectively during this critical time of extended drought. Previously, most cities and water agencies did not have access to progressive design-build contracting.
With the passage of Senate Bill 991, starting in 2023, local agencies including cities, counties, and specified special districts that provide water production, storage, supply, treatment, or distribution services can now use the progressive design-build (PDB) process for up to 15 public works projects estimated to cost more than $5 million each. These changes are in effect until January 1, 2029.
Progressive Design-Build 101
A Valuable Form of Collaborative Project Delivery
Access to the PDB process will reduce the overall risk, timeline, and cost of important water projects, helping local agencies address the state’s need for water. Industry studies show projects delivered through PDB perform better against these metrics compared to the design-bid-build method.
Early Involvement
The owner and design-builder are
all involved early in the process and
in some cases, before the design
is developed
Qualifications Based
The design-builder is selected primarily
or exclusively on qualifications and past
performance, as opposed to a design
package or a bid
Progressive Process
The project moves forward in phases
where the owner and design-builder work
together to progress the design toward a
maximum contract price
Newly signed into law, SB 991 allows local
agencies to use collaborative project delivery
for more efficient and cost-effective water
storage, treatment, and transportation projects.
17 A Proven Track Record of Successful Projects
PDB is a valuable form of collaborative project delivery that is becoming increasingly popular for public works projects. Here are just a few examples of the benefits of PDB in action:
Honey Creek Pump Station & Pipeline Project – DeKalb County, Georgia needed to upgrade its sewer system to meet anticipated sewer needs in the Honey Creek Sewer Basin for the next 45 years. Garney was selected as the designer and had to complete the design within less than two months of them receiving their contract, due to the fast-paced nature of the project. PDB delivery allowed collaboration among the owner, engineer, and contractor, which allowed them to work through the design process efficiently, begin construction before the design was complete, and complete the project 20 days ahead of schedule. Learn more about the project here.
Haskell Manufacturing Plant – Haskell, a global manufacturer of carbon fiber products, planned to build a manufacturing plant on a 400-acre greenfield site in Moore, South Carolina. Haskell had an agreement with the local sanitary sewer district for them to receive and treat the wastewater generated by the facility and there was an aggressive schedule for that to start, as the industrial wastewater flow would impact the hydraulic and process capacities of the treatment facility. PDB delivery allowed the owner and design-builder to collaborate on their approach factoring in cost, schedule, and risk into every decision. This resulted in an approximate savings of $20 million, which allowed the owner to pursue an additional project.
Learn more about the project here.
CO Metro Wastewater Reclamation District Northern Treatment Plant (NTP) – Colorado’s Metro Wastewater Reclamation District (Metro District) planned to build the Northern Treatment Plant (NTP), a new regional wastewater treatment facility to serve the northern Denver metropolitan area. The project was one of Colorado’s largest and most complex wastewater projects to be constructed by collaborative delivery and using PDB delivery allowed the Metro District to have input on facility design, assess project risks, and stay on budget.
Learn more about the project here.
How We Can Help
The Water Collaborative Delivery Association, formerly known as the Water Design-Build Council, is a leading professional association dedicated to advancing successful collaborative delivery solutions for the water and wastewater industry.
If you would like assistance understanding or preparing to implement the benefits now available through SB 991, please contact us here.
Streamlines the procurement process
Increases transparency of the design-build
cost and provides owners with more cost
certainty earlier in the project
Shortens the overall
project schedule
Gives owners flexibility to move forward with the project if they cannot reach an agreement with the design-builder
Encourages collaboration between
owners and design-builders
Benefits of Progressive Design-Build
DeKalb County
Georgia
Moore
South Carolina
Denver
Colorado
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SB 991 PROGRESSIVE
DESIGN-BUILD:
LOCAL AGENCIES
Frequently Asked
Questions
What is SB 991?
SB 991 is a state bill that is now law in California. Under this new law, local water agencies can now use the progressive design-build (PDB) contracting method for public works projects estimated to cost more than $5 million beginning in 2023.
What will be different under SB 991?
Under the new law, local agencies (a city, county, city and county, or special district authorized by law to provide for the production, storage, supply, treatment, or distribution of any water from any source) can now use the progressive design-build (PDB) contracting method for public works projects estimated to cost more than $5 million. Previously, state legislation only granted design-build authority with specific parameters and use by water agencies was limited.
Who authored this bill and why?
State Senator Josh Newman (D-Fullerton) authored the bill, citing recent data that shows California faces an unprecedented need for additional capacity to treat water. To meet this need, the majority of California’s local water agencies will need to invest in new treatment methods that leverage cutting-edge technology that provides new opportunities to convert wastewater into drinking water.
The new law will give local agencies the option of using the progressive design-build contracting method to reduce schedules, overall project risks, and costs of these important public works projects.
What kinds of projects are eligible under the new law?
Any project that treats, pumps, stores, or conveys water, wastewater, recycled water, advanced treated water, or supporting facilities is eligible to use the progressive design-build construction procurement process. Each project must be estimated to cost more than $5 million.
What is progressive design-build (PDB)?
Progressive design-build (PDB) is a valuable form of collaborative project delivery that is becoming increasingly popular for public works projects throughout the U.S. Under a PDB contract, an owner enters into a single contract with a design-builder, selected primarily on qualifications, optionally in conjunction with price, in the early stages of a project. The three primary roles of the project—the owner, designer, and builder—then work as a team to make decisions about the project as it progresses through final design, construction, and commissioning.
What are the benefits of PDB?
The three main benefits of PDB are collaboration, schedule and timeline efficiency, and early cost certainty. In the PDB process, the owner, designer, and builder are collaborating with each other to better understand each component of the project before the design is finalized. This also allows the team to make decisions in the best interest of the project, rather than any single party.
19 2
Unlike traditional project delivery, the design-builder can be selected primarily on qualifications, which can substantially reduce procurement time. The collaborative process also ensures all the project decision-makers are in one room, which can help procure materials early and begin construction even if the design for the project is not complete.
Early involvement allows the owner to understand the risk upfront and tailor the scope of the project to meet its budget.
Price estimates are completed throughout the different phases of the project, and owners can select which items to include in the design as prices change in real time, providing them with more cost certainty throughout the project.
All parties agree to a final guaranteed maximum price before the project goes to construction.
How is PDB different from other project procurement methods? Why would a local water agency choose PDB over other options?
In traditional project delivery, known as the Design-Bid-Build method, the owner completes the design and then solicits bids for construction to contractors under a separate contract.
With the Design-Build method, the owner awards design and construction scope under the same contract, the owner provides performance standards to the design-builder, and everyone works together to deliver the project within a given budget and an accelerated timeline.
In the Construction Manager at Risk (CM/GC) method, the owner signs separate contracts with a designer and a general contractor, but they are brought on the project around the same time; the team then designs the project around the desired cost. The project timeline is typically much faster than the design-build method.
Progressive Design-Build (PDB) is a somewhat of a hybrid method where owners manage a single contract for design and construction (as opposed to the multiple contracts in traditional project delivery), based primarily on qualifications.
The design-builder is also brought into the project much earlier in the process, compared to other delivery methods.
The owner then progresses the design to obtain a guaranteed maximum construction price through collaboration and ongoing, transparent, cost estimates.
Owners that have the flexibility to use PDB will find value in the streamlined procurement process, schedule efficiency, cost transparency, and collaboration with the design-builder. PDB is a great option if an owner wants to use the designbuild method, but values its active involvement in the design of the project.
How can eligible water agencies prepare to implement PDB in their procurement processes? Owners should focus on four key areas when designing a procurement process and preparing to use the PDB method:
Assess the Project: Owners should first gain a full understanding of PDB and assess if it is the appropriate delivery method for their project.
Understand Legal Limitations: Owners should verify that state and local procurement laws allow for the use of PDB and pay careful attention to the specified requirements for procurement.
Develop a Procurement Plan: Owners should have a single, fundamental objective of selecting the right team and using a streamlined and simple process.
Ensure Collaboration: Owners should ensure their team members understand the importance of collaboration and that it is applied throughout the entire project.
Where has PDB been used in California or elsewhere successfully? California has the most design-build projects compared to other states in the country. Explore our Project Library to learn more about successful progressive design-build projects. 20
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25
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DDEF_GI./36+76+/365-3,=/10,>>1-/5<1?=,+45<,:/105<.0:6B6/5,+;0673/5.001B14615./3102651,A,6:,(:1,/:,2@ DDEF`GU365-3,=/1053,::01B,6+6+1>>1-/.+:;9+/6:R,+9,0;K<MLM^<,+4,5.>/3,/4,/16501=1,:14@ abcGDGI.016B(9051B1+/6501C96014(;/365,-/=9059,+//.J1-/6.+Z.>W0/6-:1d***ef.>/31Q,:6>.0+6, Q.+5/6/9/6.+(1-,951/31.+:;-.5/5/3,/B,;(16+-90014(;,:.-,:,71+-;.05-3..:465/06-/26::(16+-90014 (1-,951/365,-/-01,/15,+12-06B1.06+>0,-/6.+<1:6B6+,/15,-06B1.06+>0,-/6.+<.0-3,+715/31=1+,:/;>.0, -06B1.06+>0,-/6.+<26/36+/31B1,+6+7.>J1-/6.+K\OOZ.>/31P.A10+B1+/Q.41<.0-3,+715/3141>6+6/6.+.>, -06B126/36+/31B1,+6+7.>J1-/6.+Z.>W0/6-:1d***ef.>/31Q,:6>.0+6,Q.+5/6/9/6.+@ 26 Notes
Cost 15% 2 0.3 3 0.45 2 0.3
In PDB ‐ the construction cost can be negotiated at the later stage after the design is more complete and defined. In PDB, GC participates in establishment of the final price, and the price is more accurate.
In DBB, the bidding environment provides potential for the lower cost. However, COs might be significant.
Cost Certainty 10% 4 0.4 2 0.2 4 0.4 FDB and DBB have more cost certainty upfront.
Funding 10% 3 0.3 2 0.2 3 0.3 Funding application and reporting is simpler in FDB and more recognizable by the funding agencies.
Materials Market Conditions 10% 2 0.2 3 0.3 2 0.2
In PDB ‐ GC can participate in the selection of the best time for procurement based on the current or historic prices, as City will have access to the real‐time actual prices.
Contingencies and Escalation 5% 1 0.05 3 0.15 2 0.1
Higher contingencies in FDB and DBB due to more unknown and potentially paid regardless if not encountered. PDB is less risk to the GC and therefore, potentially less contingencies and escalations; typically not paid if not encountered.
Delivery Method (T&M vs LS) 5% 2 0.1 3 0.15 2 0.1 PDB has more flexibility on the cost model LS and T&M.
Schedule (Ability to Fast‐Track) 5% 2 0.1 3 0.15 2 0.1 PDB has a flexibility for early packages.Risk Allocation (e.g., Contract, Schedule, Quality) 0% 1 0 2 0 1 0 More risk GC during FDB.
Quality Control 5% 2 0.1 4 0.2 1 0.05 Quality of project components are more achieved in PDB.
Design Definition Flexibility 5% 2 0.1 3 0.15 2 0.1 Typically FDB is 30‐35% in bridging documents. PDB can be lower to allow DB team innovation and less risk and liability to the City.
Flexibility During Design and Construction 5% 1 0.05 4 0.2 3 0.15 Team Collaboration/ Constructability Review 5% 1 0.05 3 0.15 2 0.1 PDB is more flexible to incorporate brainstorming and innovations GP (Construction Price Procurement) 5% 1 0.05 3 0.15 2 0.1 PDB has open book GP procurement.
Environmental/ Permitting 5% 1 0.05 3 0.15 2 0.1 PDB provides more flexibility to adjust to environmental/ permitting requirements.
Contract Management 5% 4 0.2 2 0.1 3 0.15 FDB and DBB day to day contract management is simpler to administer Competition and DB Teams Procurement 5% 1 0.05 2 0.1 1 0.05 Typically contractors prefer PDB increasing competition 100% 2.1 2.8 2.3
DBB: Design‐Bid Build
PDB: Progressive‐Design‐Build
FDB: Fixed Price Design‐Build
DELIVERY METHOD
Traditional DBB Progressive DB (PDB) Fixed DB (FDB)
27