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Advantages/Disadvantages of Each Project Delivery Method 25 of builder knowledge of sustainable design, and the owner, in certain cases, can thereby risk los- ing LEED certification. CMR In CMR, the owner has a clear opportunity to define sustainable design with LEED criteria. Sustainable construction features are more likely to be implemented because of the cooperative nature of the owner/builder contract. DB With DB, the owner can clearly articulate its expectations regarding the use of LEED criteria by assigning weight to the LEED criteria in relation to other factors in the DB evaluation plan and by using sustainable design and construction as performance criteria during design and con- struction. There is some evidence that the use of DB may hamper the objective of achieving LEED certification. This is due to the perception of risk by the DB contractor when considering whether to bid on a DB project with LEED goals. The owner needs to define the project scope and goals clearly to ensure reasonable competition, especially if LEED certification is desired. DBOM While the project owner and operation and maintenance personnel may be acquainted with the LEED criteria and requirements, there may be limited ability to incorporate evolv- ing criteria as well as restricted opportunities to "push the envelope." The addition of post- construction operation and maintenance allows the owner to hold the DBOM contractor responsible for delivering the lifecycle cost savings incorporated as a result of the design process. The DBOM contractor would thus be at risk for failing to achieve the savings associated with the approved design. Reduced lifecycle cost (both economic and environmental) is an advan- tage of sustainable design strategies and a fundamental LEED component. Sustainable design strategies that may produce increased initial costs are balanced and ultimately offset through reduced lifecycle costs. Agency-Level Issues Agency-level issues relate to the owner agency. These will include items such as experience with various delivery methods, workforce requirements, staff capability, agency goals and objectives, agency control of the project, and third-party agreements. Issue 7: Agency Experience This issue relates mainly to the level of experience of an owner's staff in application of various delivery methods--in other words the staff's comfort and confidence using a specific delivery method. Owners who have used a project delivery method in the past would have a higher level of experience with that method. DBB Transit agencies have historically employed DBB as their project delivery method. This expe- rience with DBB makes it a good candidate as a project delivery method (Harrington-Hughes 2002). This experience can motivate an agency to use an alternative delivery method or deter the agency from doing so. The most experienced owners may find that some of their negative expe- riences with DBB (e.g., contractor's claims, erroneous designs, delays in the schedule, and cost overruns) will push them to try alternative methods. Other owners will be comfortable with DBB delivery and therefore be hesitant to try new delivery methods.

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26 A Guidebook for the Evaluation of Project Delivery Methods CMR Most transit agencies have not used CMR for their projects because this is a relatively new project delivery method in transit. Agencies' experience with CM is limited mainly to hiring a construction manager as a consultant or agency CM (see Chapter 2 for a detailed discussion of the CM definition). Nonetheless, agency staff with DBB management experience should have most of the skills necessary to manage CMR because of the similarities between CMR and DBB [Portland Mall Project and Weber County Commuter Rail]. One missing skill may be negotiat- ing the construction manager's preconstruction services fees and the GMP in CMR. DB Several transit projects have been executed with the DB approach. Many transit agencies, as well as other public agencies, have the managerial experience required for a DB project. Although agency staff with DBB management experience should have most of the skills necessary to man- age DB, the differences between DB and DBB are significant enough that some sort of training seems to be inevitable for agencies with no background in DB. The primary difference between the two approaches is in managing a contract that contains the designer and constructor as one entity. This difference affects the manner in which the design-builder is procured (e.g., using the best value method instead of biding based solely on cost), the manner in which the design is reviewed, and some aspects of how construction is overseen by the owner. Additionally, agency staff will need to learn how to conduct project oversight without the presence of a completed design for early features of work. This may require training in new skills for owner employees, which may make DB more difficult to administer [Medical Center Extension, Greenbush Com- muter Rail, T-REX, and I-205 Light Rail Extension Project]. DBOM DBOM represents a significant departure from DBB, and few agencies have experience with this method. The advantage to using DBOM is that the agency can transfer most of the tradi- tional responsibilities of the agency staff to the DBOM contractor. Some experts believe that this delivery method is best suited for small agencies without substantial in-house expertise (Kessler 2005). However, the loss of control that goes with this transference of responsibility can be a dis- advantage if the agency does not have experience in managing responsibilities for design, con- struction, and maintenance that have been outsourced to a contractor. Issue 8: Staffing Required This issue reflects how each delivery method affects the owner's direct involvement in the project. Each delivery method assigns specific duties to each party, including the owner. The scope of these duties and the dependence of project progress on the owner's involvement in deci- sions reflect the extent of the owner's involvement. The total number of owner employees required for each delivery method is one measure of the extent of owner involvement. A second measure is the variation in the number of staff required throughout the project development process. It is assumed that, in general, a smaller staff is more desirable; nonetheless, this assump- tion has to be weighed against potential reluctance within the agency to buy into a method that can reduce the need for agency staff. DBB An owner in a DBB project should administer two separate contracts for design and con- struction. Because of this and the high level of involvement in decision-making and quality management, a relatively large number of owner employees are needed in this approach [Silver Line Project] (AGC 2004, Gordon 1994). The owner's responsibilities in DBB are spread through- out the project (mainly focused on dealing with the designer at the beginning of the process and

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Advantages/Disadvantages of Each Project Delivery Method 27 shifting to focus on the contractor after project award); fluctuation in the number of employees required during the project is minimal. CMR The owner hires a new party in CMR and delegates some parts of its managing duties to this party. This approach can arguably require the least number of owner employees because the CMR can expand to meet the owner's staffing needs (Gordon 1994). The owner may, however, need to add some professionals to its staff (either as employees or consultants) if special expertise (e.g., GMP or construction manager's fee negotiation) in managing a CMR contract is desired. DB The owner should develop a comprehensive set of project specifications before advertising a DB project because the design-builder takes responsibility for the project in both design and construction phases only after the project is awarded and will base the project design on the specifications. The owners may hire consultants for developing the RFQ/RFP documents or use their own staff. One study shows that most agencies have not changed the size of their staff after implementing DB mainly because the owner must be involved in a substantial amount of pre- advertising design and engineering (Gransberg and Molenaar 2007b). Another study shows that some public agencies have put considerable effort into developing the design documents as a means of performance risk reduction in large DB projects (Molenaar 2005). The number of staff required for project administration decreases after the award because the number of check- points and controls is reduced in this delivery method and the oversight procedures are usually streamlined (Harrington-Hughes 2002). Another driver with respect to the size of staff is the way quality assurance/quality control (QA/QC) is handled in DB projects. In most DB projects, the constructor is put in charge of day-to-day QC functions. The owner's role is to design and implement a QA program. DBOM Early decisions in this delivery method cover a wide range--from the feasibility of the project in conceptual design to safety in the operation phase. This broad range of expertise requires an owner to have a good-sized staff to handle the project at least in pre-design and preliminary phases of design [Hudson-Bergen Light Rail]. On the other hand, some experts believe that a transit agency with a small staff would prefer to choose DBOM and outsource many of its duties (Kessler 2005). In most DB projects, the constructor is put in charge of day-to-day QC functions. The owner's role is limited to spot checks and QA functions. Issue 9: Staff Capability This issue is mainly focused on the quality and competence of the owner's employees and their ability to complete the duties that must be undertaken in each delivery method. There is a con- cern about the retirement of experienced employees negatively affecting the capability of an owner's staff during the project. So the availability of the experienced staff until the end of the project should be considered while evaluating staff capability. DBB Transit agencies have more experience with DBB than other project delivery methods. This experience helps them to gradually build up capability in their staff at all levels of the organiza- tion. An important issue to consider is the different staff expertise required to handle a design contract with the designer of the project and a construction contract with the general contrac- tor. If an owner chooses a project delivery method other than DBB, it may end up with a longer list of required competencies [Silver Line Project].

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28 A Guidebook for the Evaluation of Project Delivery Methods CMR Some professionals believe that administering CMR requires special capabilities while others think that the owner agency delegates most of its duties to the CMR. While the work can be del- egated, agency staff must be capable of overseeing CMR work and notice errors or omissions [Portland Mall Project and Weber County Commuter Rail]. CMR also requires management of the relations between the onboard constructor and the designer. The owner should carefully man- age the process by which the constructor gives input (constructability, value engineering, etc.) to the designer and the way these inputs are received, analyzed, and implemented. Also, the expe- rience of the agency staff in GMP negotiations is a key factor in this delivery method. It seems that while the agency would need a smaller staff with this method, the staff would need to be especially competent and versatile in dealing with these additional requirements. DB DB contracts require owner competency in managing the process, keeping up with the typi- cally faster pace of the design-builder, and understanding the procedures. Recent research shows that the traditional design and construction engineering tasks performed by public agency pro- fessional engineers (e.g., design deliverable approvals and construction inspection) were per- formed by the same staff in design-build projects (Gransberg and Molenaar 2007b). While the required skills for DBB are similar to DB, owners tend to put their most experienced staff on DB projects because these staff members need to understand conceptual designs, conceptual esti- mates, and performance criteria. These skills typically reside only in the most experienced staff [Medical Center Extension, Greenbush Commuter Rail, T-REX, and I-205 Light Rail Extension Project] (Gransberg and Molenaar 2007b). DBOM The variety of decisions that must be made early in the main portion of the project scope demands capable employees with a high level of expertise [Hudson-Bergen Light Rail]. The owner will also need to have financial analysis capabilities in its staff because this delivery method may include project financing, which in turn will require more extensive financial analysis of project viability, contract incentives, and the owner's financial security (FTA 2006). Issue 10: Agency Goals and Objectives Agency goals can be described in broad terms as providing service to the community or achieving its growth goals. Agency goals can align with project delivery attributes or can be in conflict with them. Agency goals are different from project goals. Agency goals entail statutory requirements for safety, equal opportunity, and other legal/regulatory requirements. Project goals, on the other hand, are specified in procurement documents and are usually described in terms of time and cost expectations. DBB An agency can incorporate its goals and objectives in prescriptive specifications and detailed designs. Having control over the design, on the one hand, and requirement of design approval for construction commencement, on the other hand, helps the owner ensure the achievement of its goals and objectives. Examples of achieving goals and objectives include specifying targets for disadvantaged business enterprise (DBE) participation and stakeholders concerns with regard to agency and project objectives. CMR The agency can work with CMR during the design phase and when negotiating the GMP to develop project goals and objectives in alignment with agency goals and ensure that they

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Advantages/Disadvantages of Each Project Delivery Method 29 are achieved by the project. Since this is typically a qualifications-based selection, the RFP can help ensure that agency goals and objectives are clearly incorporated into CMR proposals. This delivery method may encourage a better owner-constructor relationship than DBB, one that can facilitate the achievement of agency goals [Portland Mall Project and Weber County Commuter Rail]. DB In DB, an agency has less control over the details of the design than in DBB. To the extent that these details affect agency goals, DB may have a negative impact on achieving agency goals. Exam- ples of agency goals that could be compromised include aesthetic considerations, safety, and com- muter satisfaction. If an owner is not absolutely clear on its goals prior to procurement, DB can yield unsatisfying results [Medical Center Extension, Greenbush Commuter Rail, T-REX, and I-205 Light Rail Extension Project] (Molenaar et al. 2005). DBOM A DBOM contract covers a large number of project issues. This comprehensive agreement may push the project through different decision steps and help the owner achieve its goals. Nonetheless, there is a concern that DBOM may hinder the owner in achieving its social goals. Although, according to Kessler (2005, p. 36), a "TRB study" states that decreases in quality and safety of services provided by private entities have not been proven, some experts believe that using this delivery method may limit agencies' power to serve the public (e.g., a change required in operation phase will be extremely costly in DBOM). Advocates of this method believe that a comprehensive agreement with an appropriate level of detail can address this issue; however, it should be noted that there is insufficient precedence to ensure success. Issue 11: Agency Control of Project Different delivery methods have different checkpoints and decision-making steps. This sec- tion is focused on an owner's control over the details of design and quality of construction; cost control and time control are examined in other sections. DBB The owner using this delivery method may benefit from the checks and balances provided by having separate contracts with the designer and the constructor. Having periodic decision points in DBB, primarily during the design phase, helps the owner control the project's design (Harrington-Hughes 2002, Garvin 2003, Irwin 2003). Having a specific contract based on bid plans helps the owner to control construction and material quality. The owner has objective control over the quality of the design through the design team. Also, if flexibility is required dur- ing construction, DBB can perform better than some other methods because there are established procedures for implementing changes. Nonetheless, change orders are usually accompanied by corresponding cost increases. CMR The owner agency benefits from the involvement of the CM in most of the decisions during the design phase. The CM can assist in controlling the details of design. The owner therefore has a similar level of control in CMR as in DBB if the working relationship with the CMR is good. This delivery method gives more control and flexibility to the owner in implementing changes in the details of design during design development than DB does. Furthermore, imple- menting changes in CMR may be more effective than implementing changes in DBB because the CM is on the team in CMR (Walewski, Gibson, and Jasper 2001; Minchin, Thakkar, and Ellis 2007).

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30 A Guidebook for the Evaluation of Project Delivery Methods DB Although, according to some, DB provides the owner with the same quality of design and con- struction as DBB does, in DB the owner loses control over the details of the design that are not defined in the RFP (Konchar and Sanvido 1998; SAIC, AECOM Consult, and University of Col- orado at Boulder 2006). Loss of control over the design (and possibly lack of checkpoints) has the potential to expose the owner to shortcomings in the quality of design and construction [Medical Center Extension, T-REX, and I-205 Light Rail Extension Project] (Gordon & Rees LLP 2005; Irwin 2003; Gransberg and Molenaar 2004). DBOM The owner in this delivery method loses control over the details of design and details of oper- ation and maintenance. DBOM is not a good option for owners who want to extend their exist- ing systems, mainly because of the integration needed in the operation phase (Kessler 2005). Loss of checks and controls after awarding the contract is a disadvantage of this delivery method espe- cially if the owner is expecting a high level of control over the project. Issue 12: Third-Party Agreements This issue concerns each delivery method's impact on facilitating agreements with third parties-- political entities, utilities, railroads, and so forth--involved in the progress of the project. DBB Using DBB can be advantageous during lengthy negotiations with some project stakeholders [Silver Line Project]. It gives some flexibility and time to the owner to get required agreements before the commencement of the construction phase. Third parties, on the other hand, have the ability to examine 100%-complete designs before a contractor is hired. The possible disadvan- tages of completing designs before hiring a contractor include a lengthy design schedule (includ- ing numerous instances of stakeholder inputs that can disrupt the most generous schedules) and a lack of construction contractor input into the third-party agreements. CMR The main advantage of having a CM is having constructability advice and the responsibility for that advice (e.g., construction knowledge and an understanding of construction methods) during the development of third-party agreements. This delivery method may also have a signif- icant impact on getting into an agreement with third parties involved in a project when com- pared to DBB if the owner includes the responsibility to make agreements with third parties as part of the CMR contract. As an example, among the agencies interviewed in this research, one strongly emphasized the benefit of having a contractor on board while negotiating with third parties [Weber County Commuter Rail]. In general, the CMR's knowledge of construction processes and sequencing can help clarify various aspects of project impact on communities and institutions; this will hopefully facilitate achieving understanding and approvals. DB The DB process can move third-party agreements to an earlier point in the delivery process, often before the design is complete. Agencies have experienced both the benefits and drawbacks of having the design-build contractor on the team before all third-party agreements are in place. As the design and construction are awarded in one contract, the time required to develop agree- ments with other parties can be shorter than desired. Additionally, these agreements must often be written in performance terms because the design is not completed at the time of award. How- ever, some experiences with DB show that DB contractors have been successful in obtaining responses from project stakeholders by exerting pressure on them. Constructors have different