Water Design-Build Council 2013 Annual Report

“To become the nationally recognized ‘go-to’ water organization for advancing

the use of collaborative design-build delivery for water projects.”

WDBC VISION

Water Design Build Council

ANNUAL REPORT2013

2 | WATER DESIGN BUILD COUNCIL

INTRODUCTIONThe Water Design-Build Council is a 501 C (6) non-profit corporation chartered in February 2006. Its mission is to promote best practices in design-build and construction management at-risk (CMAR) and to facilitate productive and collaborative relationships between service providers and owners.

Funded entirely by Member contributions WDBC maximizes its resources by operating as a low-overhead virtual organization. With a permanent staff of two skilled professionals, both of whom have direct and long-standing industry experience, WDBC is immediately responsive to emerging issues. Meeting quarterly, Members actively discuss current industry matters and policy-based impediments. The Council also maintains proactive engagement of anti-trust counsel and does not engage lobbyists. As an action-based organization, WDBC delivers the right service, products and tools to advance the use of collaborative project delivery based on a mutual understanding of industry needs and impediments.

When the Water Design-Build Council’s (WDBC) Board of Directors approved its program and budget for 2013, it did so with its mission at the forefront – enhancing the benefits to owners and practitioners of using design-build (DB) and construction management at-risk (CMAR) delivery. Now

that the 2013 program activities have been carried out, I am pleased to present this Annual Report, summarizing WDBC’s accomplishments in the areas of research, education and best practices for collaborative project delivery.

As this year is concluded, we take great pride in key developments concerning the WDBC’s role in supporting collaborative project delivery in the water industry:

•Most importantly, we have seen, over the past year, a big increase in demand for WDBC products. The collaborative delivery marketplace - due in part to WDBC activities - is experiencing greater interest among municipal owners.

•Second, new research conducted in 2013 has identified common impediments to greater use of collaborative project delivery, providing fertile ground for the targeting of WDBC efforts in 2014 and beyond.

•Third, WDBC has begun to put in place a mutually-beneficial working relationship with the design-build Institute of America (DBIA), thereby expanding the WDBC’s reach and distribution of its educational and research products.

Message from the President

2013 ANNUAL REPORT | 3

As described in this Annual Report, the year 2013 has seen a wide variety of WDBC activity across the United States with positive impacts on owners and practitioners in the collaborative project delivery marketplace, including new educational, research and best practices materials:

•Progressive design-build Procurement Guide and RFQ/RFP Model Documents

•The Municipal Water and Wastewater Design-Build Handbook, Third Edition

•DBIA Webinar on Progressive design-build Procurement

•Member-only market data concerning geographic growth in DB and CMAR projects In 2013 (and in past years), WDBC’s resources have been directed to education, research, and best practices - supporting owner and member capabilities in implementing collaborative delivery for water and wastewater projects … which:

•Educates policy officials by facilitating effective project delivery based on solid research •Equips Members with products which enable responses to clients’ interest in collaborative delivery methods•Validates the benefits of collaborative project delivery through successful case studies

•Provides essential materials to support Members’ work that include:

• Monthly newsletters and daily blogs

• Special industry updates

• VIdeos and workshops

• Shapes industry direction to a more collaborative business approach for the mutual benefit of the growth of Members and the clients served

Patrick GallagherPresident

Water Design-Build Council

The WDBC’s achieves its goals specifically by dedicating its resources to Research, Education and Best Practices. They are accomplished through strategic communications and education to municipal owners, policy officials and industry practitioners. As a result, this mission and its initiatives has evolved the WDBC to be a leading voice in the water industry, promoting the value and best practices for design-build delivery methods for water and wastewater infrastructure projects.

It has been a privilege to serve during 2013 as President of the Water Design-Build Council. I very much look forward to continuing to work in 2014 and beyond with Members to expand the Council’s reach and impact in the growing and exciting marketplace of collaborative project delivery for water and wastewater projects,

RESEARCH

Since the beginning of its work, the WDBC has pursued varying research projects addressing the use of design-build delivery with that of design-build-bid. The purpose of this work is to understand the educational needs of the industry, as well as the challenges facing municipalities in its use. This approach has had, and continues to have successful results. WDBC is able to respond to these needs with greater insights as to how to support policy officials and managers.

In 2013, WDBC pursued two important research studies – the actual work of the first was conducted in 2012.

The WDBC 2012 research survey was conducted by the Engineering Department at the University of Nevada, and Cannon Research Center. Published in 2013, its purpose is to present data about the level of satisfaction owners and policy officials have, and have experienced in using design-build and construction-management-at-risk delivery methods. This research (available on the WDBC website) produced the following key findings.


A majority of respondents use a two-step procurement process (an RFQ to generate a short list, followed by an RFP) to select a firm based on best value (evaluating both non-price and price factors).

Respondents indicate that major impediments to the broader use of design-build and CMAR delivery include lack of familiarity with the process, an owners’ perception of risk, and a resistance to change.

WDBC’s 2012 Survey of Municipal Owners on the Satisfaction in Using Design-Build/CMAR as a project delivery method

82% 89%

91%

Agree that the use of design-build and CMAR delivery results in minimal claims/change orders and disputes.

The vast majority of respondents report being very satisfied with the quality of completed projects, the level of the owner’s involvement, and with the communication process that occurred.

Among the top reasons owners give for using design-build and CMAR delivery are the advantages of keeping projects on schedule, achieving better quality and controlling costs.

Respondents (owners) express significant satisfaction with the transition to operation of projects (DBO) using design-build and CMAR delivery.

State that using of innovative ideas saves money, time and improves quality.

State they will use design-build and CMAR delivery again.

RESEARCH

State Legislative Statutes on Progressive Design-BuildOne of the sections in the WDBC “Model Procurement Guide for Progressive Design-Build Projects” discusses the legislative statutes enabling the use of progressive design-build as an alternative delivery method for the water/wastewater infrastructure. To gain additional insights about this topic, the WDBC conducted an independent research study. Regulations in 13 states where projects (as reported by WDBC members) were successfully implemented under state enabling legislation were examined. However, what was not clear was whether the legislation in these states specifically allowed progressive design-build projects to occur. A review of data previously compiled by DBIA also did not provide insights about enabling legislation for progressive design-build in any of the states. To address this gap, the WDBC study researched the controlling principles within the regulatory statutes. It also examined some of the nuances and inconsistencies that preclude the use of progressive design-build in those thirteen states. The final report and data is available as a “White Paper” on the WDBC website, with a more detail report in the members’ section.

• Understand in greater detail, the impediments encountered by utilities and agencies owners and managers in being able to use DB and CMAR project delivery methods.

• Identify approaches or solutions to overcome the impediments in using DB delivery methods for capital projects.

Specific Study Objectives:


Understanding the Impediments to Using Design-Build Delivery MethodsThe 2012 WDBC Customer Satisfaction Survey data revealed that owners and managers of utilities and municipal systems encounter both internal and external obstacles in being able to use Design-Build and CMAR delivery methods. These impediments result from varying situations that exist within the regulatory environment, governance structures and decision-making process.

Respondents to the “Impediments Study” represented utility owners, managers and policy officials from the Water Environment Federation and American Water Works Association Utility Council databases. WDBC expresses its sincere appreciation to these partnering organizations for their collaboration in this important inquiry. As result, Respondents in the study represented facilities in L32 states throughout the U.S.

26%

34%Selected state procurement/statutory requirements as the largest external impediment.

The largest internal impediment to using design-build delivery is “resistance to change” that exists with management or policy officials.

The second greatest internal impediment is unfamiliarity with the design-build process by senior staff members, which furthers the resistance to change from the use of design-bid-build delivery.

Selected municipal or agency procurement regulations as a significant external impediment

Key Findings

Both survey reports are available on the website.

This report is available on the WDBC website.


EDUCATIONWDBC’s first document, the Municipal Water and Wastewater Municipal Handbook” was designed to specifically address the educational needs of professionals in the water industry. In 2010 the 2nd Edition of the Handbook was updated to include guidance for municipal officials to use in the decision-making process design-build delivery methods. The data updating the 2nd Edition was derived from a survey of more than 60 experts in the DB sector and 50 community representatives. Similar to the first Handbook, the 2nd edition incorporated the experience of WDBC members and the projects they’ve implemented. This work was then followed by a series of fact sheets that elaborated upon selected topics within the Handbook.

The results of WDBC’s prior research revealed the need for additional education on specific topics.

WDBC’s fact series addresses these needs and are available on the WDBC website.


The 3rd Edition of the WDBC Municipal Water and Wastewater Design-Build Handbook now includes a section on design-build-operate. This new edition, produced in 2013, now provides the full spectrum of essential factors for use in the procurement and implementation of design-build projects. The contents of the new Handbook also incorporates information from previous research identifying educational needs of those in the water infrastructure industry.

Equally important, the 3rd edition of the Handbook presents a new glossary and clearer terminology. No longer used are the terms, “alternative and traditional project delivery.” The message for all to employ is — a collaborative process. The Handbook also incorporates suggested “Best Practices,” throughout each of the chapters presented below.

WDBC Municipal Water and Wastewater Design-Build Handbook —3rd Edition expanded to include Design-Build-Operate

•Understanding the Basics of Design-Build and CMAR and Design-Build Operate for water infrastructure projects

•The spectrum of project delivery methods and key factors to use in the decision-making process

•Planning for a Design-Build or CMAR project and determining the best method for a particular water infrastructure project

•The major steps in the procurement process for Design-Build and CMAR projects

•Risk allocation in Design-Build and CMAR projects and understanding the basic allocation principles

•Management and oversight of Design-Build and CMAR contracts

•The final steps of a project, startup and commissioning, project acceptance and transitioning to owner operations

•The key components to implementing a Design-Build- Operate project.

•An appendix highlighting award winning Design-Build, CMAR and DBO water infrastructure projects

EDUCATION

Based with a Fee and Rate Proposal With a Fee and Rate ProposalTWO-STEP RFQ & RFP

Qualifications basedONE-STEP RFQ

Based solely on qualificationsTWO-STEP RFQ AND RFP

ONE-STEP RFP


WDBC’s research also emphasized the industry’s need for materials specifically directed to effectively and efficiently procures and select qualified contractors for progressive design-build projects. As a result, the contents of these documents concentrate on the four different types of procurements most frequently used in PDB:

Now available for municipal owners and policy officials, this Guide answers the identified questions, with a step-by-step description in how to develop RFP’s for “Progressive Design-Build (water and wastewater) Projects.” Information and examples in to how to produce these documents for municipal use are included. Complementing the WDBC Handbook, the Guide offers a more balanced industry approach to the procurement process for water and wastewater projects. These materials also include a model contract for the procurement process.

In 2014, WDBC will publish A Procurement Guide for Fixed-Priced Projects

A Procurement Guide for Progressive Design-Build Projects


This new guide provides an overview of the decision-making steps involved in selecting a design-build delivery method. Derived from excerpts in the 3rd Edition of the Municipal Water and Wastewater Design-Build Handbook, this guide is an abridged information resource to those desiring to use one of the design-build delivery methods. It also serves as a valuable introductory message to individuals desiring to learn more about design-build delivery.

Produced as a concise and understandable publication, it also presents the value proposition for collaborative delivery methods. This publication is complementary with the newly published WDBC Video and will be distributed through the social media program and at grassroots education sessions.

How to Select a Design-Build Project Delivery Method

Understanding the Progressive Design-Build Delivery Method

E-NewsletterThe Council produces a monthly electronic newsletter a format integrated with social media. This educational resource, which reports on industry issues and member activities, is distributed to nearly 20,000 individual within the water infrastructure industry. This vital communications tool disseminates education materials such as, fact sheets, case studies, and market data; highlights pertinent legislation and other industry news. It also profiles successful member design-build projects.

WDBC’s Website Facilitates its Education MissionWDBC’s interactive website presents an overall map of North America on its home page — identifying locations of member design-build projects. Advanced search features enable users to find the type of water or wastewater plant, the desired design-build delivery method or firm, and/or special characteristics. All design-build, CMAR and DBO projects have a written profile describing the reasons for the design and construction approach; costs, special process or regulations requiring attention. Also, at the top right corner (of the map) is a button for Google-earth satellite map capabilities, giving viewers an exact picture of the facilities.

This publication presents the benefits of progressive design-build, with a step-by-step approach in how to accomplish it. It complements the newly produced Model Procurement Guide for Progressive DB; and includes data demonstrating the value – and perhaps even comments from the updated client satisfaction survey. It will be promoted through the social media program, placed on the website and used during education sessions.

Exclusively for Water and Wastewater Projects – addressing the questions:

Complimentary Workshops on Design-Build Delivery Methods and Procurement

VIDEO #1Understanding design-build and CMAR Project Delivery MethodsDescribes the differences between the design-build and CMAR approach to project delivery with that of the design-bid-build method.

VIDEO #2Design-build and CMAR Procurement Process for water and wastewater infrastructure Projects Outlines the major steps in which a successful procurement process for design-build and CMAR water and wastewater infrastructure projects should occur.

VIDEO #3Managing Risk Allocation and Liability in design-build andCMAR water infrastructure projects Offers practical suggestions for applying, where appropriate, key principles in allocating risks to the respective party best able to control or finance them.

•Are there questions from your purchasing department or administrator about how a procurement process for a design-build project is different from that of the lengthy design-bid-build process and whether it complies with state regulations?

•Does your agency have a project that is on a tight budget and schedule?

• Is there confusion about the best approach to get the right firm to design and construct your project that meets your overall goals and objectives?

A core component of WDBC’s Education Program is the production of a video series. Beginning in 2013 and completed in 2013, these videos are about the various aspects of collaborative delivery methods. developed as an educational resource for owners, municipal officials and industry members address the use of collaborative project delivery methods for the water and wastewater infrastructure. Using the popular WDBC Handbook as basis for these products, each educational videos is approximately 50 minutes in length, and is available at no cost through the WDBC website. These videos have also been provided to the DBIA for use in their CEU training programs for the water industry.

WDBC Educational Video Series (2012/2013)

Session Topics – which focus on or combined, include:

• Understanding the Differences in design-build and CMAR Delivery Methods – and when is DB the Best Choice

• Procurement Steps for design-build Projects – which includes the new Guide for Progressive DB

• Risk, Liability and Contracting – obtaining the best value Education sessions are available at either ½ or a full day.

35% Industry/NM

30% WDBC Firms

16% W/WW Owners

12% DB/NM

7% Others

Customer Sastisfaction Survey

14%WDBC

45 %W/WW Owners

9% Other

19%Industry

Non/Mem

13%DB Firm

Non/Mem

HandbookDownloads

14% WDBC

Members

Who’s Using and Reading WDBC’s Materials and Products

14%WDBC

43 %W/WW Owners

14% WDBC

8% Other

16%Industry

19 %DB/ Non MProcurement

GuideDownloads

26%

Top Performing Content


Water Design-Build Member/Practitioner Education The WDBC has also produced am educational series of Power Point presentations entitled “Best Practices for Water Design-Build Industry Practitioners.” These materials, structured in a format of continuous learning, are designed to engaged professionals by focusing on the experiences and lessons learned in the dynamics of competing in the water design-build environment. An example of these topics include:

• “Positioning and Preparing your firm in the Design-Build/Integrated Project Delivery Marketplace,” produced by Mark Alpert, P.E - Senior Vice President of Design Build for CH2M Hill Constructors.

• “Compete in Order to Win a Specific Project (including teaming and responding to an RFP),” developed by Peter M. Kinsley, Haskell Company Water Vice-President

• “Executing the Project for Success: Using Effective Management Tools,” created by Chuck Williams, AECOM Senior Consultant,

•Preparing your Firm to Compete in the DB Marketplace – produced by Mark Alpert, CH2MHill

•When is it Cost-Effective to Respond to an RFP? – developed by Peter Kinsley (Haskell) and Andrew Albrecht (Parsons)

•Contract Development and Negotiations – produced by Todd Larson (Black & Veatch) and Pat Gallagher (CDMSmith)

These materials and others are accessible on the WDBC website and also offered as a half-day workshop for companies working in the water design-build industry.

BESTPRACTICES

Market and Industry DataEach year since its inception, the WDBC has collected data on the municipal water design-build contracts entered into by members and their clients during the previous year. Statistics include total value of design and construction, project start and end dates, type and location of facility, and which delivery method was used. Aggregating information provided by members into a confidential database, WDBC creates an annual industry report containing information that is not available anywhere else. The Council uses this information in articles, presentations and also makes it available exclusively for members’ use in their business planning efforts. The 2012 Market Report shows increasing use of design-build as a project delivery method since 2008, compared to the traditional design-bid-build format.

Leading States in 2011/2012 Using Design-Build Projects & Delivery

Use of DB for Wastewater Projects Continues to Increase

Preferences of Key States using Design-Build Delivery

Wastewater & Conveyance

Water

2012 20122009 2009

31% 33%

37%

59%

Texas - $36821%

California - $21312%

Florida -$17810%

Washington - $716%

Sales (Millions)

$44 -Colorado3%

28%

69%

Water Projects

Waterwaste Projects

DB Continues as Dominant Delivery Preference in 2012

51% DB Delivery Preference


Officers

Associate Members

Member Alternatives

Patrick Gallagher

Douglas Lisak

Leofwin Clark

Andrew Albrecht

Stephen R. Gates

Phil Sudol

Peter M. Kinsley

David Kinchen

John D. Doller

Peter Tunnicliffe

Mark Alpert

President

1st Vice President/Treasurer

Ex-Officio (Past President)



Board Member

Outside Director

2nd Vice President/Secretary

Cambridge, MA

Kansas City, MO

Englewood, CO

Sumner, WA

Andover, MA

Phoenix, AZ

Jacksonville, FL

Atlanta, GA

Phoenix, AZ

Cambridge, MA

Englewood, CO

VP CDMSmith, INC

HDR Inc. President/CEO

Vice President/Sales Director, CH2M HILL

Senior VP, Parsons

Senior Vice President, Brown/Caldwell Constructurs

Vice President, Carollo Engineers

VP - Water, The Haskell Company

Associate VP, Black & Veatch Water

Senior Vice President, Carollo Engineers

Executive VP, CDMSmith

Senior VP, Design Build; CH2m Hill

2013 WDBC MEMBERS & BOARD OF DIRECTORS

Member Alternatives

Brian Daly

Todd Larson

Don S. Evans

Joseph A. Lauria

Bryan R. Bedell

John Awezec

Norman Gadzinski

Thomas Decker

Wakefield, MA

Denver, CO

Las Vegas, NV

Irvine, CA

Jacksonville, FL

Denver, CO

Pasadena, CA

Alexandria, VA

Associate Vice President, AECOM Water

Associate Vice President, Black & Veatch Water

President, Evans Group Int. LLC

Senior Vice President, ARCADIS U.S., Inc.

Director of Business Development – WaterThe Haskell Company

Director, Central Région Alternative Delivery, HDR Inc

Vice President /Business Development, Parsons

Vice President, Brown and Caldwell Constructors

Russell MacDonald Denver, CO Senior VP, AECOM Water

WDBC Management

Linda Hanifin Bonner, Ph.D, CAE

Peter Hughes, Esq. Englewood, CO

Edgewater, MDOperations Mananger

WDBC Executive Director


Funding for WDBC’s operations, programs, and projects is derived solely from its member firms. As illustrated in the graphic below, these monies are dedicated to fulfilling the WDBC’s mission. The accomplishments during the past year were made possible by in-kind contributions from member’s services in various product development.

WDBC concludes 2013 in a financially stable condition.

• Funds invested for emergency purposes now exists to provide sufficient reserves to operate the organization at a minimal level for a three to four-month period.

• Of the nine funded 2013 initiatives, all but one will have concluded by December. Since only minimal start-up funds were used in 2013, this project is now placed on the 2014 project list with funding recommended.

13%RESEARCH

66%EDUCATION & OUTREACH

21%OPERATIONS

FINANCIAL ALLOCATIONS

28%5%16%6%

12%17%2%

4%

15%

26%27%19%

EXECUTIVE DIRECTOROPERATIONS MANAGER

PROJECTS/RESEARCHBOARD COMMITTEES

COMMUNICATION

CONFERENCES MEETINGS

PROCUREMENT GUIDEMEMBERSHIP

OUTREACH

FINANCE/ADMIN

23%

Financial Management

As evidenced in the data below, WDBC’s staff time is fully committed to the organizations work, thus achieving an excellent return on members investment.


Facilitating collaborative relationships among owners, design-builders, and engineering and construction firms .

RELATIONSHIPS

Conducting research to assess Owner satisfaction with, or impediments to, DB and CMAR projects, and

RESEARCH

Promoting best practices for are in the procurement and delivery of Design-Build (DB) Design-Build Operate and Construction Management at-Risk (CMAR) water and wastewater projects,

BEST PRACTICES

Member Benefits & Industry Value


Since 2006, no other national organization has dedicated itself exclusively to the values of the Water Design-Build industry

Industry Value Overall, the whole industry benefits from WDBC’s free educational materials, whose sole mission is to inform others about best practices and the benefits of collaborative delivery methods for the water and wastewater infrastructure. We ensure that:

WDBC is dynamically involved in current industry initiatives and policy-based impediments.

Leading edge social media initiatives are employed, using the WDBC website which publishes Member’s technical papers, its educational videos, monthly e-newsletters, the Water & Wastewater Design-Build Handbook, and articles in industry publications

WDBC achieves direct and active participation of Members’ senior executives responsible for the water and wastewater business, supported by their business development, marketing, and communication staffs.

WDBC’s membership includes firms using collaborative methods – Design-Build, Design-Build-Operate, and CMAR – to deliver water and wastewater systems and infrastructure throughout North America.

WDBC Values

As 2013 drew to an end, WDBC received word that Peter Hughes, WDBC’s Executive Director of two years had died suddenly of heart failure on December 27. Peter’s contributions to the WDBC will always be valued and his work with its Board members remembered and held in high esteem. During his tenure, Peter supported the development of the Procurement Guide for Progressive-Design-Build Projects, the respective videos, brochure and handbook with his technical expertise on risk and liability. He lead the work on the study of selected States throughout North American where regulations enabled the use of progressive design-build delivery; supported the research investigators on the WDBC’s recent customer satisfaction and impediment surveys; and provided a leadership role in membership recruitment.

We will remember in our prayers, Peter’s beloved wife Julie, son, Jeffrey; and daughter Catherine.

As WDBC’s Executive Director, Peter Hughes brought to the organization more than 40 years of extensive experience in large industrial and water infrastructure projects. His role with the WDBC is representing the organization in the marketplace, conveying the overall vision and mission and supporting the fulfilment of its strategic goals, in order to gain new members, and to advance the use of collaborative delivery methods in the water industry. Peter was an attorney, a mechanical engineer, and also served as ‘Of Counsel’ to the Denver law firm, Polsinelli and Shughart. Retiring in 2008 as Vice President and Chief Legal Officer of CH2M HILL Constructors, Inc. (design-build sector), Peter’s 14 years of work resulted in helping to build and manage the Integrated Project Delivery business section, particularly for water, wastewater, transportation, and environmental projects. Peter was an experienced speaker and writer on the topics of project risk management and project development issues – and will always be remembered for his wit and many stories. He authored the chapter on “Design-Build for Water & Wastewater Projects”, in the Aspen Publications book, Design-Build for the Public Sector (Michael Loulakis, editor); and the chapter on “Project Delivery Methodologies for Megaprojects” in Megaprojects, a forthcoming book from the American Society of Civil Engineers (Jack Dignum, ed.). As a member of the DBIA National Legislative Committee, Peter drafted and managed the passage of Colorado’s Integrated Project Delivery legislation in 2007. The passage of this bill made Colorado one of the most progressive states in permitting any combination of design, construction, operation & maintenance, and financing of public projects. Peter held a J.D., from the Boalt Hall School of Law, University of California, Berkeley and a B.S.M.E. (Energy Conversion Systems), San Diego State. He was a member of the State Bars of California and Colorado, a Life Member of the American Society of Mechanical Engineers, and holds an “AV” ranking from Martindale-Hubbell; the former Chair of the Corporate Counsel Division of the American Bar Association’s Forum on the Construction Industry (Division 11); Past President of the Rotary Club of the Denver Tech Center, and chairs his Rotary District’s Water & Sanitation Task Force. He was recently elected as a Fellow of the American College of Construction Lawyers. We all have people come and go throughout our life’s journeys, but individuals like Peter Hughes are an exception! He left a footprint of knowledge and expertise; and a legacy of wisdom and compassion.

In Remembrance – David Peter Hughes, JDWDBC’s Executive Director


The Water Design-Build Council offices are headquartered in Edgewater, Maryland.

Mailing Address: P.O. Box 1924, Edgewater, MarylandOffice Telephone: 410-798-0842Fax: 410-798-5741Website:www.waterdesignbuild.orgContact: [email protected]

Water Design-Build Council 2013 Annual Report

Documents

Transcript of Water Design-Build Council 2013 Annual Report