Contractor Prequalification is it RIGHT for your Project?

2015 NC AWWA-WEA Annual ConferenceRaleigh, North Carolina

Peter F. Schuler, PENovember 16, 2015

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• Why Prequalify Contractors?• Prequalification Process / Metrics Evaluated• Case Studies• OWASA – Aeration / Odor Upgrades - $10 million

Contract• OWASA – Digester Rehabilitation - $2 million

Contract• Salisbury, MD – BNR/ENR Upgrades - $50 million

Contract

• Conclusions

Presentation Overview

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Why Pre-Qualify Contractors?• Normal Procurement of Contractors• Contractor submits price and “Qualifications” on bid day• “Qualifications” – bonding Capacity, references, etc.• Low bid wins unless “Qualifications” are not acceptable• Owner then needs to either disqualify contractor

(possible lawsuit) or “grin and bear it”

• Prequalification of Contractors – 2 Step Bid Process• Contractors submit “Qualifications” first and Owner /

Engineer decide whether or not they are qualified• Only pre-qualified contractors can submit bids on bid

day• Low bid still wins – but you have a much better chance

of getting a qualified contractor• Process should not be used to limit the amount of

bidders – just to make sure they are qualified

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• Request for Qualifications• Purchasing requirements – detailed description of

process• Detailed project description• Forms to fill out• Any State Forms – Minority / SB, AS&I, Wage Rates, etc.

• Contract Drawings (60%, 75%, 90%)• Contract Specifications

• Typically – Owner / Engineer must actively “market” contractors at this step• Normally – Include a “Pre-Bid” Meeting and Site Visit

Pre-Qualification Package - Includes

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Prequalification Process / Metrics Evaluated

Non-Point Rating Items Criteria

Responsiveness to RFQMust answer all questions and provide all information to be

considered responsive

Debarment Status Cannot be debarred

Contractor’s License Must provide a copy of Contractor License for state project located in

Bonding Capacity / Signed StatementMust provide a signed statement

from Surety demonstrating sufficient bonding capacity

Past Safety PerformanceMust demonstrate safety perfomance

by providing EMR & DART Scores – past 3 years

Minimum Relevant Experience Varies by project as determined by Owner

Unsatisfactory Rating in Any Non-Point Rating Category – Disqualifies Contractor

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Prequalification Process / Metrics EvaluatedPoint Rating Items (0-4 or 1-5

pts) Criteria

Past Project Performance (25%)Provide details on 3 or more projects of similar scope and

complexity

Personnel Qualifications / Experience (30%)

Essentially resumes of proposed Project Officer, PM,

Superintendent, etc. with a project organizational chart

References – Owners (15%) Schedule, Quality, Cooperation/Coordination

References – Engineers (5%) Overall Rating

Financial Data (5%) Compared against industry standards

Claims/Final Resolutions/Judgements (10%) 6 different categories evaluated

Failure to Complete – Applicant (5%) # of occurrences and explanations

Failure to Complete – Officer (5%) # of occurrences and explanations

Other Relevant Criteria (5% bonus) Varies by Project – Owner Decided

Must Achieve a Minimum of Average Score or Not Qualified

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Case Study 1– OWASA Mason Farm WWTP

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New Odor System – NSL Cells

New Turblex Blower

Aeration / Odor Improvements – Case Study #1• Complete Odor Control Upgrades• Nutrified Sludge Cells (NSL)• Aeration Basin Influent Channel• Aerated Cells

• Reduce Power Consumption and Improve Aeration Basin Performance• Replace Jet Aeration with Fine Bubble• Reduce Mixing Power Consumption• Improve Blower Efficiency

• Complete Project by December 2014 to Fulfill Promise to Town• Engineer’s Estimate = $9.5 million

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• Minimum Experience to Be Demonstrated• 3 Water / WW Projects >$5

million in last 5 years • Experience with staged

construction• Experience with construction

of blowers, diffused aeration, odor control

• Complete project in 18 months

• 75% Contract Drawings / Specifications Provided

Pre-Qualification Requirements– Case Study 1

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• 21 Contactors Submitted RFQs• 14 Contractors were “Qualified” • 7 Contractors were “Not-

Qualified”• 3 due to safety practices• 3 due to lack of relevant

experience• 1 due to claims and bad references

• Used a 1-5 scale for ratings• Qualified contractors all scored

better than 4.0• Only contractor “not qualified” due

to point rating scale scored 3.4

Pre-Qualification Results– Case Study 1

• New Invent Mixer

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• Only 4 of 14 Qualified Contractors submitted bids• Low bidder made a math error and bid was thrown

out• Awarded to Haren Construction for $10 million or

$500k over engineer’s estimate• Lessons Learned - Why only 4 bids?• Too many pre-qualified firms – GCs don’t want more than 6

or at most 8 “competitors”(4 firms)• Bigger more attractive projects bidding at same time (4

firms)• Other more local projects to chase (2 firms)• Too much pre-negotiated equipment (1 firm)

• End Result – Project was completed ahead of time with less than 1.5% change orders – excellent project

Bid Day Results / Lessons Learned– Case Study 1

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Case Study 2– OWASA Mason Farm WWTP

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Digester 2 - Leaks

Dystor and Roof

Digester 1 and 2 Rehabilitation– Case Study #2• Scope of Work • Install new walls inside digesters 1 & 2• Install new gas membrane cover on

digester 1• Repair damaged concrete inside

control building• Install new roof on old digester control

building• Install new doors, stairway, heaters

and ventilation ductwork• Demolish heat exchangers and piping

that is no longer used• Repair inoperable valves and other

miscellaneous work

• Engineer’s Estimate = $1.9 million

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• Minimum Experience to Be Demonstrated• 3 WWTP Projects >$5 million in

last 5 years • Experience with staged

construction• Experience with construction /

structural rehabilitation of digesters or other concrete tanks

• Complete project in 10 months

• Attempt to “weed-out” really small contractors • 60% Contract Drawings /

Specifications Provided

Pre-Qualification Requirements– Case Study 2

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• 8 Contactors Submitted RFQs• 6 Contractors were

“Qualified” • 2 Contractors were “Not-

Qualified”• 1 due to safety practices• 1 due to lack of relevant

experience

• Used a 1-5 scale for ratings• Qualified contractors all scored

better than 4.0 except 1 • OWASA previously had good

experience with GC with <4 score

Pre-Qualification Results– Case Study 2

• Dystor Removed

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• 5 of 6 Qualified Contractors submitted bids• Awarded to RTD Construction for $1.9 million

or $400 under engineer’s estimate• Lessons Learned - Why 5 of 6 bid?• Only one that declined to bid had recently won too

much work• All qualified contractors were small or mid-sized

firms• Relatively easy bid to put together • Owner made an effort to avoid competing bid dates

• Construction is just starting on this project – so too early to tell how it will go.

Bid Day Results / Lessons Learned– Case Study 2

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Case Study 3– Salisbury BNR/ENR Upgrade

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BNR / ENR Upgrade– Case Study #3• Scope of Work • Install new 4 Stage Bardenpho

Process• Install new Blower Building• Install 4th Secondary Clarifier and

rehab 3 existing Secondary Clarifiers• Replace Upflow Filters with Disc

Filters• Install new UV Disinfection Building• Improve Solids Processing System• Install new Class A Lime Stabilization

• Engineer’s Estimate = $52 million• MDE Reviewed Prequalification

Solicitation

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• Minimum Experience to Be Demonstrated• 3 WWTP Projects >$40 million in

last 10 years • Experience with staged

construction• Experience with blowers and

activated sludge systems• Experience with UV, SCs, Disc

Filters• Experience with Lime Stabilization• Complete project in 30 months

• 90% Contract Drawings / Specifications Provided• Attempted to Prequalify General

and Electrical Contractors

Pre-Qualification Requirements– Case Study 3

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• 9 General Contactors Submitted RFQs• 7 General Contractors were

“Qualified” • 2 General Contractors were

“Not-Qualified”• 1 due to safety practices• 1 due to lack of relevant

experience

• Electrical Contractors • Were uninterested in the process• Even GCs were unable to get

them to participate• Withdrew this RFQ solicitation

Pre-Qualification Results– Case Study 3

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• 4 of 7 Qualified Contractors submitted bids• Awarded to Ulliman Schutte Construction for

approximately $50 million • Lessons Learned – • Qualify enough contractors to make sure you have

4 or 5 bids on bid day • A lot of effort was required to put this bid together• Bid date conflicted with DBIA conference• Prequalifying Electrical Contractors or other

subcontractors may be difficult

• Construction is just starting on this project – so too early to tell how it will go.

Bid Day Results / Lessons Learned– Case Study 3

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• In all three case studies, Owner was able to pre-qualify GCs that met reasonable standards• Bid prices received were generally equal or

less than engineer’s estimate• Pre-qualification of the GCs, eliminated

surprises and Owners were generally pleased with results

Conclusions

2015 NC AWWA-WEA Annual Conference

Raleigh, North Carolina