METHODS OF PROJECT DELIVERY - 6814
The state generally uses either the design-bid-build or design-build methods of procuring design and construction services for its capital outlay projects. In addition, the state uses various lease methods to obtain the use of facilities. The following discussion briefly outlines standard procurement methods in the building industry and the resulting budget implications.
Design-bid-build. In the design-bid-build process, preliminary plans, working drawings, and construction are all separate phases; an overview of all typical capital outlay phases is provided in Section 6808. This approach allows the state to determine the exact product before it begins construction. Typically, funds are not committed to a phase unless there is a strong assurance that they can be encumbered within a single fiscal year. Consequently, most design-bid-build projects are budgeted in several phases over two to three years. Each appropriation requires a COBCP (Section 6808) and must be included in the department’s five-year infrastructure plan (Section 6805).
In addition, PWB and Finance perform an oversight role for design-bid-build projects by reviewing and approving each phase of a project (Sections 6828). Specifically, in design-bid-build, a department may not begin working drawings prior to PWB approval of preliminary plans, and may not proceed to bid or initiate construction until Finance approves working drawings.
Design-build. In contrast to design-bid-build, design-build projects are submitted for bid much earlier in the project’s development (Section 6829). This approach allows design work to be performed by the same entity that constructs the project. The department, or DGS on behalf of the department, is responsible for developing a request for proposal (RFP), which for traditional would include performance criteria. The design-build firm uses the RFP as the basis for its proposal.
As with design-bid-build, design-build projects are typically budgeted in multiple phases over several years. Each appropriation requires a COBCP (Section 6808) and must be included in the department’s five-year infrastructure plan (Section 6805). PWB and Finance perform an oversight role for design-build projects by reviewing and approving each phase of an approved project (Section 6829). Specifically, in design-build, a department may not expend funds on the design-build or progressive design-build phases prior to PWB approval of the performance criteria or the guaranteed maximum price. Also, a design-build project for which a capital outlay appropriation is made shall not be put out to design-build solicitation until the bid package has been approved by Finance.
Other Procurement Methods. Other project delivery methods such as capitalized leases are agreements between a government agency and a private sector. The private sector may be responsible for providing one or more project development functions, such as selecting and acquiring a site, design, construction, financing, and maintaining or operating the facility, which is leased to the department. Oversight of capitalized leases is discussed in Section 6836.