Alternative delivery models are types of procurement which integrate people, systems, business structures, and practices into a process that collaboratively harnesses the talents and insights of all participants to reduce waste and optimize efficiency through all phases of design, fabrication, and construction. The goal is to bring the key project delivery participants (typically the owner, architect, contractor, and major trades/sub-consultants) together at an early stage of the procurement to work collaboratively to deliver the project effectively, with every participant sharing in the project risk and reward. Source: American Institute of Architects
Over the next 10 years, $31.5 billion has been committed by the Ontario government for transportation and transit projects. A lot of that investment will be delivered through alternative procurement models including: Alternative Finance and Procurement (AFPs); Construction Manager / General Contractor (CM/GC) and Design Build (major and minor).
Alternative Financing Procurement, better known as Public – Private Partnerships (P3s) are a long-term performance-based approach to procuring public infrastructure where the private sector assumes a major share of the risks in terms of financing and construction and ensuring effective performance of the infrastructure, from design and planning, to long-term maintenance. In practical terms, this means that: Governments do not pay for the asset until it is built; a substantial portion of the cost is paid over the life of the asset and only if it is properly maintained and performs according to specifications; and the costs are known upfront and span the life-cycle of the asset, meaning that taxpayers are not on the financial hook for cost overruns, delays or any performance issues over the asset’s life.
Source: P3 Canada
CMGC is a two-phase contract, where a contractor is retained during the design-phase to be collaborative member of the Design Team. A construction Manager is then hired by the owner (by single- step RFP) early in the design phase (Contractor is CM). At the end of design, the Contractor has opportunity to bid on the work. If the bid accepted by the owner, they become the Contractor for the project (Contract becomes General Contractor). If the owner does not accept the bid price, the contract is tendered as a Design-Bid-Build contract. CMGC is suited for projects with: high complexity, challenging stakeholder issues, difficult regulatory issues, complex staging requirements, and significant scheduling risks.
Design-Build Minor – Type A: One step procurement, RFP; low bid, technically compliant. It is evaluated via the following categories: project management, quality management, environmental management, safety management, project schedule, technical plan. Pass/Fail evaluation of the Proponent’s understanding of the work and ability to deliver. Typical project types include culvert replacements, minor reconstruction projects and resurfacing.
Design-Build Minor – Type B: Two step procurement DB-EOI; Short-list Proponents for RFP stage. DB-EOI Evaluation Categories: respondent organization & team experience, key personnel, and project management approach. Responses to DB-EOI are evaluated and scored to short-list, typically to 3 best qualified Proponents; minimum score of 70 required. Typical project types include structural elements, CVIF/Patrol Yard construction, and less complex bridge replacements.
Design-Build Major: Two step procurement DB-EOI; Short-list 3 qualified proponents (same evaluation process as outlined for DB Minor Type B) RFP; Best Value award (Price ÷ Technical Score). RFP Evaluation Categories: project management plan, environmental management plan, technical plans, and construction management plan. Each category evaluated and scored based on criteria in RFP; minimum scores per category + min. overall score to proceed to Price Proposal evaluation and Best Value calculation. Typical project types include expansion projects, major reconstruction, and complex structure replacements.
ADM Roundtable Sessions
In November and December 2015, ORBA hosted four Alternative Delivery Models (ADM) roundtables across Ontario with the Ministry of Transportation (MTO), Infrastructure Ontario (IO) and Metrolinx to help those in the industry better understand the process around alternative procurement models for infrastructure projects.