Public School Capital Outlay Council Public School Facilities
Public School Capital Outlay Council Public School Facilities Authority Presents NEW INITIATIVES IN CONSTRUCTION CONTRACTING For PED/NMASBO Spring Budget Workshop April 5, 2007 Public School Facilities Authority Phone: (505) 988 -5989 Ext. 2108 2019 Galisteo, Suite B-1 Fax: Santa Fe, NM 87505 E-mail: info@nmpsfa. org (505) 988 -5933
Presented by: n Public School Facilities Authority Pat Mc. Murray, AIA PSFA Senior Facilities Manager Dotty Mc. Kinney, CPPB PSFA Contract Specialist
Proposed Legislative Changes to the Procurement Code that may* affect Construction n Definitions n Statutes n * Waiting for Governor’s Signature
Local Public Works Project n Current Definition in the Procurement Code: 13 -1 -66. 1 “Local public works project” means a project of a local public body which uses architectural or engineering services requiring professional services costing twenty-five thousand dollars ($25, 000) or more, or landscape architectural or surveying services requiring professional services costing five thousand dollars ($5, 000) or more, excluding applicable state and local gross receipts taxes.
Local Public Works Project n PROPOSED NEW Definition in the Procurement Code: 13 -1 -66. 1 “Local public works project” means a project of a local public body which uses architectural or engineering services requiring professional services costing fifty thousand dollars ($50, 000) or more, or landscape architectural and surveying services requiring professional services costing ten thousand dollars ($10, 000) or more, excluding applicable state and local gross receipts taxes.
Small Purchases – HB 1147 n Proposed Changes to the Procurement Code: 13 -1 -125, Para. B: Notwithstanding the requirements of subsection A of this section, a central purchasing office may procure professional services having a value not exceeding fifty thousand dollars ($50, 000), excluding applicable state and local gross receipts taxes, except for the services of landscape architects or surveyors having a value not exceeding ten thousand ($10, 000), by issuing a direct purchase order to a contractor based upon the best obtainable price.
Procurement Options n DBB - Design/Bid/Build – 13 -1 -102 n DB n RFP - Request for Proposal - 13 -1 -111 For Construction, Maintenance, Services & Repairs CMS Construction Management Services – 13 -1 -40. 1 Not at Risk CMAR* Construction Manager – HB 303 AT RISK n n - Design/Build – 13 -1 -119. 1 *Pending signature by Governor
Procurement Options USE OF OTHER CONTRACTS * State-Wide Price Agreements * Piggy-backing * GSA (General Services Administration) * Job Order Contracting CES UNM, NMSU City of Albuquerque Public Schools Los Alamos Public Schools
Which Method To Use? What to consider when making your decision n ABILITY to use different methods n UNDERSTANDING various project delivery methods n SELECTION of appropriate method n IMPLEMENTATION of chosen project delivery method
Which Method To Use? * What is allowed by law * Who on your staff is available & qualified? * When is the Project to be ready Other factors - What Benefits (not Obstacles) are evident in the Project circumstances Which Method? The one that fits BEST!
The Four Phases (every project goes through) NEED Recognized Traditional Linear Process Other Processes Planning Design Bid Construction Occupancy Planning Design Construction Initial Guaranteed Maximum Price Occupancy
n. DESIGN / BID / BUILD Traditional Low Bid
DBB – Design/Bid/Build = Low Bid n Traditional construction procurement method 1. Owner selects designer to design building 2. Contract awarded to Lowest Responsible Bidder 3. Owner holds Design/Construction Contracts 4. Subcontracts held by General Contractor
DBB – Design/Bid/Build = Low Bid Considerations: √ Separate contracts for design & construction √ Final selection based 100% on total cost
DBB – Design/Bid/Build = Low Bid PROS: *Process intended to stimulate price competition *Process understood by owners & public *Process has established legal & procedural guidelines *Fairness of the process allows qualified contractors to compete on an equal basis *Owner has an expectation of finished product prior to construction based upon design & price
DBB – Design/Bid/Build = Low Bid CONS: *Process may require considerable time *No guarantee that bid won’t exceed budget leading to delays to re-bid or canceling project *Adversarial relationships can develop Owner – wants best possible building at lowest cost Architect – wants to satisfy Owner & meet design elements Contractor – must complete job within time & price bid *Differences in interpretation of contracts *Differences may result in claims/delays to be resolved
n. DESIGN / BUILD
DB = Design / Build n Procurement Code 13 -1 -119. 1 NMSA 1978 Definition: “means a procurement process by which a using agency contracts with one firm who has responsibility for the design, construction and delivery of a project under a single contract with the agency”. 1. Procured using the RFP method Qualifications based Evaluation criteria same as DP 2. Regulations – NMAC 1. 5. 7 Guides you step-by-step
DB = Design / Build n PROS: * One contract for design/construction saves tim * Long lead time items can be identified, order ahead * Quicker resolution on issues – design/costs * Project cost determined relatively soon * Contract documents can be less detailed * Value engineering & constructability review enhanced * Complex projects – full integration of design & construction enables fast schedule with controlled budget * Project close-out may be smoother as fewer parties are involved * Possibility of fewer disputes, changes, claims & delays
DB = Design / Build n Cons: * Owner must provide clear scope of work & project requirements * Potential loss of checks & balances (DP/Contr) * Loss of objectivity may be perceived as Owner’s decision based on qualifications, not price * Insurance/Design liability must be addressed design services require licenses of design/build team * Less detailed documents may result in misunderstandings by Owner – affect time/price * Owner may require more cost monitoring than lump-sum contracting
n REQUEST FOR PROPOSAL FOR CONSTRUCTION, MAINTENANCE, SERVICES & REPAIRS
RFP for Construction n Discussion: This competitive sealed proposal process is authorized to give agencies flexibility to obtain the best overall value from a procurement contract. This is accomplished by permitting consideration of certain contractor qualification and performance factors that add value to a procurement contract, such as past performance, technical expertise and experience, management capabilities and resources.
RFP for Construction * Procurement Code 13 -1 -111 NMSA 1978 Became Law in 2003 * Regulations 1. 4. 8 NMAC Issued by State Purchasing 2005 Step-by-step guidelines
RFP for Construction n Process 1. Owner hires DP, develops Scope/Design 2. Owner issues Request for Proposal Qualifications Team of Subcontractors 3. Offerors (General Contractor) are evaluated on criteria determined by Owner 4. Short List – Best & Final Offer(s) 5. Contract Negotiations
RFP for Construction n Pros: * Early construction input in Design Phase * Ability to Fast Track * Ability to evaluate Construction “Team” * Collaborative (not adversarial) process * Early cost feed-back/value engineering * Higher quality product * Cost controls – Guaranteed Maximum Price
RFP for Construction n Cons: * Must have very well-defined Scope of Work * Must have clear understanding of RFP process and the Best & Final Offer process * Must have committed and knowledgeable Evaluation Committee members * Must understand project scope/time lines * Cost of work is not the only factor!
Contractor Qualifications ■ Develop your evaluation criteria to consider the following: * Licenses * No. of years in business * Types of projects previously executed * Financial security of vendor * Any prior or pending litigation * Bonding/Insurance
n Construction Manager/ Construction Management Services
C M S = Const Mgmt/Mgr (NR*) Definitions: 13 -1 -40. 1 NMSA 1978 reads: A. “Construction management” means consulting services related to the process of management applied to a public works project for any duration from the conception to completion of the project for the purpose of controlling time, cost and quality of the project. ” B. “Construction manager” means a person who acts as an agent of the state agency or local public body for construction management, for whom the state agency or local public body shall assume all the risks and responsibilities. * NOT AT RISK!!
C M S = Const Mgmt/Mgr (NR) Discussion: 1. Services procured through RFP process 2. Includes a comprehensive array of management and/or consulting services spanning all phases of design & construction process from conception to completion of the project 3. Purpose is to control time, cost and quality of project for the Owner 4. DOES NOT duplicate services of professional architectural or engineering services 5. DOES NOT include acting in the capacity of a contractor or any tier of contracting for a construction project
C M S = Const Mgmt/Mgr (NR) n Pros: * Project management delegated to Consultant – may save time * CM must be licensed – qualified to perform services required * Level & degree of services required are determined by the Owner * CM represents the interests of the Owner * Design Documents are not complete when CM engaged—substantially complete when bid occurs
C M S = Const Mgmt/Mgr n Cons: * Owner, not the CM, assumes the RISK & RESPONSIBILITY for the project * May require multiple contracts for subcontractors & subcontractor tiers * Control of costs/change orders may be difficult * Control of project close out/warranty items may be difficult to execute and control
CMS – Construction Manager (Many Separate Contracts for Design & Construction) Responsible for Performance and Holds Trade Contracts CM Owner Responsible for Administration of Project A/E Responsible for Design General/Sub Contractors General/Sub Contractors Responsible for own portion of Construction
n. Educational Facility CONSTRUCTION MANAGER - AT RISK
CMAR = Const Manager AT RISK * HB 303 Introduced in Legislative Session 2007 * Amends 13 -1 -102, Competitive Sealed Bids 13 -1 -119. 1 Competitive Sealed Proposals
CMAR = Const Manager AT RISK Procured through the RFP Process * Two Step Process – Projects up to $500, 000 * Three Step Process – Projects over $500, 000
CMAR = Const Manager AT RISK n Discussion: “CM at Risk” means a person who, pursuant to a contract with a governing body, provides the preconstruction services and construction management required in a construction manager at risk delivery method for an educational facility including Pre-construction management Cost Estimation & consultation regarding design Preparation & coordination of bid packages Scheduling Cost control Value engineering Acts as GC during construction *AT A GUARANTEED MAXIMUM PRICE !!
CMAR = Const Manager AT RISK n TWO-STEP Procurement Process Establish Selection Committee & Evaluation Criteria 1. Solicit Request for Qualifications 2. Interview Offerors
CMAR = Const Manager AT RISK n THREE-STEP Procurement Process Establish Selection Committee & Evaluation Criteria 1. Solicit Request for Qualifications 2. Solicit Request for Proposals 3. Interview Offerors
CMAR = Const Manager AT RISK Qualifications include: n Licensing for Work to be performed n Bonding Capacity n Detailed statement of obligations of all parties including Owner/CM at Risk/ and Design Professional
CMAR = Const Manager AT RISK Pros: * Possibly quicker process than DBB * Potential CMAR can be pre-qualified and shortlisted * CM can be brought on early – perform preconstruction services for Owner * Smooth integration of design & construction * CM makes recommendations during design * Value engineering/constructability/cost reduction by CM prior to completion of Bid document GURANTEED MAXIMUM PRICE Contract & schedule
CMAR = Const Manager AT RISK Cons: * Owner may require more costmonitoring than DBB * Must maintain Open Book to ensure return/cost savings to Owner of GMP otherwise, CMAR may focus on wrong goals * Selection of CM requires qualifications-based process which may be manipulated
n. JOB ORDER CONTRACTING JOC
J O C =Job Order Contracting Question: What is J O C? ■ Answer: Competitively bid, firm fixed price, indefinite quantity contract for small construction services and/or installation of finished products, materials, or merchandise and equipment which will become a permanent fixture of a structure n
J O C =Job Order Contracting ■ To construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, structure, facility, roadway, excavation – any part thereof ■ Perform work in connection with improvements to roofing systems, HVAC units, utility services lines, meters, etc. on an as-needed basis
J O C =Job Order Contracting ■ Master contract is established ■ Local subcontractors and suppliers are utilized ■ Pricing based upon an adjustment factor applied to the unit price set forth in the “Construction Task Catalog” ■ Work may include, but not be limited to, design (with DP on district contract), installation, repair and alternation of a variety of buildings & facilities
J O C =Job Order Contracting ■ JOC Contracts in place for: UNM, NM State University, Albuquerque Public Schools Los Alamos Public Schools ■ CES has JOC for all regions NOTE: All procurement rules apply! Wage Rates, bonds, insurance, etc!
n. P SFA CONTRACT PROCESSING
The Procurement Contracting Process NEW CONTRACTS If any portion of the work is funded by PSFA (DCP), the district will use PSFA standard contracts. QUESTION: If the work is funded by sources other than PSFA (DCP) and/or PSCOC awarded projects, will the District use PSFA contracts? ANSWER: No. – But we strongly encourage you to use PSFA standardized contracts. They are becoming widely accepted, they empower the owner and the require more responsibility of the design professional and contractor you may currently be using.
Procurement Contract Thresholds QUESTION: What about Design Professional contracts that are less than $25, 000 ($50, 000 IF SIGNED BY GOV) in fees and reimbursables, if applicable, but exclusive of GRT? Do I need to go out to RFP? ANSWER: No. Because the Design Professional fees and any applicable reimbursables, but exclusive of GRT is less than $25, 000 ($50, 000), it is not a public works project and therefore the RFP process of procurement is not required.
Procurement Contract Thresholds QUESTION: If the contract is for $25, 000 ($50, 000) or less and doesn’t require a RFP, do I need the other documents? ANSWER: Yes. All new contracts for DP services for PSFA (DCP) or PSCOC work still require the following items: q DCP or PSCOC portion of work clearly defined q Certificate of Insurance q Contains language the DCP or PSCOC portion of work will be paid directly by PSFA (if required as part of future PSCOC award – certification training)
Procurement Contract Thresholds QUESTION: What about construction or materials contracts that are for $20, 000 or less? Do I need to go out to bid? ANSWER: If the work or materials is for more that $5, 000, but less than $20, 000 (or limits allowed by Board Policy) the district should obtain 3 quotes from 3 vendors. If the work or materials is less than $5, 000, three quotes are not required. Depending on the type of work or materials sought, the other documents, (certificates of insurance, bonds, bid abstract & schedule of values) may still be required.
Request for Proposals (RFP) QUESTION: The District/Charter is it’s own “Purchasing Agent”. Does the State Procurement Code apply to us? ANSWER: A local public body (Districts & Charters) is exempt from the State Purchasing Division, but not the Procurement Code, despite some belief to the contrary. ALL DISTRICTS AND CHARTERS must comply with the requirements of the State Procurement Code when seeking work, materials or services on behalf of the school district. The only exception is the District’s ability, as a local public body, to write their own regulations for small purchases for tangible goods, services, and construction per 13 -1 -125 NMSA 1978. Limits set may be less than those defined in the Procurement Code, but cannot be more than the limits set in the Code.
PTAB q. Professional Technical Advisory Board q. NMSA 13 -117 -2 – Required by Statute since 1979. q Purpose: To provide professional technical advisory services to local public bodies in the development of Scope of Work, RFP, and the selection of professional services of architects, engineers, landscape architects and surveyor through the use of the “qualifications based selection process”.
PTAB Professional Technical Advisory Board P. O. Box 3773 Albuquerque, NM 87190 -3773 Phone: 505 -881 -1257 Fax: 505 -830 -1670 E-mail: ptab@acecnm. org
Invitation to Bid (ITB) INVITATION TO BID & BID AWARD PROCEDURES QUESTION: The lowest bid received by the District exceeds the budgeted funds. Can the District negotiate with the low bidder? ANSWER: Yes. As long as the lowest responsible bid is within 10% of the budgeted funds. Negotiation can only occur in order to lower the overall price in order to avoid rejection of all bids. The scope of work or other conditions can NOT be changed.
As if that weren’t enough! q PAYMENT/INVOICE PROCESS Construction - Invoice to be submitted by 25 th of the month to DP - Must be forwarded to the RM by the 8 th of the month - Payment will be made within 21 days
Non-Competitive Procurements q DETERMINATION – Required! *Sole Source – NMSA 13 -1 -126 *Emergency – NMSA 13 -1 -127 *Request for Proposal – NMSA 13 -1 -111 OTHER TYPES OF PROCUREMENT *Existing Contracts – NMSA 13 -1 -129 *GSA/State Price Agreements *Local Public Bodies/CES
PSFA Responsibilities q PSFA PROCUREMENT TRAINING PROGRAMS *Overview of the Procurement Code *Invitation to Bid Process *Request for Proposal Process *Use of PSFA DP & Construction Contracts Professional Organizations that promote procurement training: * NMPPA New Mexico Public Procurement Association * NIGP National Institute of Governmental Purchasers * NMASBO New Mexico Association of School Business Officials
BIDNET q New Mexico E-Procurement System q Formerly the Chavez County Purchasing System q E-Procurement System created in conjunction with a company called BIDNET q All Users & Vendors need to register with BIDNET q Easy to set up account, PSFA provides training q SAVE TIME AND MONEY – streamline the entire bidding process (free for district, PSFA and contractors)! q Provide Users/Vendors more bid information and bidding opportunities - obtain the best price!
BIDNET n PSFA Design Professional Contract - Ver. 2. 0 GENERAL CONDITIONS, SECTION 2. 5 - BIDDING PHASE 2. 5. 1 *DP shall assist Owner in obtaining bids & preparing contracts for construction *District responsible for costs related to legal notice & initial advertising of project to bid 2. 5. 2 *DP prepares Invitation to Bid – including bid date, location & time of bid opening *Cannot advertise project until PSFA Approval of School Construction is obtained!
BIDNET 2. 5. 3 The Design Professional shall assist the Owner with local advertisement and shall concurrently load digitally, in accordance with para. 9. 1 and 11. 3 project description to the PSFA public bid advertisement website and construction documents into the PSFA Construction Information Management System (CIMS). PSFA will train & assist DP as appropriate to fulfull these requirements.
BIDNET CONTACT – User Account Setup: Julia Small jsmall@nmpsfa. org Phone: ABQ 843 -6272 Fax: 843 -9681
Construction Contracting PUBLIC SCHOOL FACILITIES AUTHORITY www. nmschoolbuildings. org Questions & Comments
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