The Design-Build Alternative

1. The Design-Build Alternative presented at… Making choices to develop an optimal project delivery model for municipal infrastructures

2. Finding the Right Model for Alternative Project Delivery A bad day of fishing is better than a good day at the office, but… An unsuccessful design-build project is not better than a successful traditional approach

3. Finding the Right Model for Alternative Project Delivery Project Objectives & Demands • Treatment to Country’s and EU Standards • On Time & Within Budget • Long time Efficient Operation • Capacity • Performance • Environmental Impact

4. Finding the Right Model for Alternative Project Delivery What’s Available • Advanced and Proven Treatment Technology • Alternative Delivery Models • Performance Security • FIDIC contracts • EU Funding • Economic Drivers

5. Finding the Right Model for Alternative Project Delivery Investment Programme Elements Owner Activities Programme Definition Evaluation Accept Monitoring Accept Monitoring Qualifications TenderPreparation Clarifications Negotiation & Award Construction Commission & Performance Operations Programme Management Activities

6. Finding the Right Model for Alternative Project Delivery Project Vision Engineer’s Design Owner’s Vision Contractor’s Delivery

7. Finding the Right Model for Alternative Project Delivery Traditional Delivery Partnering ProfessionalConstruction Management (CM) CM at Risk Privatization Alternative Project Delivery Spectrum Design/Build • Single party responsible for Engineering, Procurement & Construction • Early fixed price • Process/Schedule Guarantees • Less design required • Less owner input than CM options Traditional Approach Other APD Design-Build

8. Finding the Right Model for Alternative Project Delivery How much control the Owner wants? Design-Build DB firm assumes some control...and shares a proportionate amount of risk result: defined performance ? Owner maintains most control……..and keeps most of the risk result: prescribed project Other APD Traditional Approach

9. Finding the Right Model for Alternative Project Delivery Is Owner in a hurry? Design-Build ? The same 5 year project might take 2-3 years - parallel activities result: team approach,joint responsibility, less time and better management A typical 5-year project involves multiple, discrete steps result: predictability, traditional engineering products Traditional Approach Other APD

10. Finding the Right Model for Alternative Project Delivery What does “best approach” mean ? ? Design-Build Project lump sum price, in combination with performance warrantees result: fewer change orders, balance between price and technical approach Fixed design fees and low bid contracting result: potential for numerous change orders and claims Traditional Approach Other APD

11. Finding the Right Model for Alternative Project Delivery Innovation and risk transfer? Performance Based Specification Based Design-Build Complex projects with unknown solutions, technical challenges, new technology result: innovative, varying approaches, “out-of-box” thinking, application of new technology Relatively simple projects result: known approaches and solutions, little opportunity for improvement ? Other APD Traditional Approach

12. Finding the Right Model for Alternative Project Delivery Where is the project? ? Design-Build Control/Risk Time Cost Quality Other Alternative Project Delivery (APD) Methods Traditional Approach (flexible)

13. Finding the Right Model for Alternative Project Delivery Design-Build can work for Owner Traditional approach may be best Weighing the options for the project... but Control/Risk DB Firm’s Owner’s Time Faster Slower Cost Value Price Quality Innovation Standard Approach

14. Finding the Right Model for Alternative Project Delivery Project Contract Mechanisms Traditional Delivery Alternative Delivery $ Design $ Bid $ Build $ Build/ Operate/Own/ Transfer $ Design/ Build/ Operate $ Design/Build FIDIC “YELLOW” FIDIC “RED” “The contractor shall design, execute and complete the works.. ” …..“the contractor shall deliver the performance security….”

15. Finding the Right Model for Alternative Project Delivery Alternative delivery can work to the benefit of the Owner DB- Design Build • Innovative technology • Integrated approach • Quicker performance compliance • Deliverability guaranteed - defects liability period • Lower costs, higher value • Easy contract management

16. Finding the Right Model for Alternative Project Delivery Alternative delivery can work to the benefit of the Owner DBO - Design Build Operate • Technology - innovative and proven • Integrated approach - designer, contractor and operator • Shorter project programme - lower cost , less env. impact • Performance - contractor can NOT hide behind low bid • LIFE CYCLE COST - always considered - realistic cost • Lower costs (capital and operational) = higher value

17. Finding the Right Model for Alternative Project Delivery Alternative Delivery at Work Bielsko-Biala, WWTP, Poland STEP-FEED technology 18 months delivery Flow & Loading Flexibility 25% operation cost savings 15% capital savings Future extension features included Fault free operation - 4 years

18. Finding the Right Model for Alternative Project Delivery Alternative Delivery at Work Dunaharasti, WWTP, Hungary Combined municipal/ industrial wastewater High operational flexibility to cope with wide variations in loading and flow Tertiarytreatmentfornutrientremoval

19. Finding the Right Model for Alternative Project Delivery Alternative Delivery at Work Changi, WWTP, Singapore Largest compact & covered WWTP in the world S$2 billion, 32 contractors Zero errors & omissions requirements All electronic documents for design, bid, construction & operation

20. Finding the Right Model for Alternative Project Delivery Alternative Delivery at Work Hutt Valley, WWTP, NZ DBO with 20 year O&M Lump sum payment Wastewater strength was 30% higher than specified

21. Finding the Right Model for Alternative Project Delivery The Way Forward • Best use of available Time and Funds • Quicker allignment with EU Standards • Improved living conditions • Focus on Performance - Innovative Technology • Integrated Approach- time, budget, operation • Life Cycle Analysis - cost savings

22. Finding the Right Model for Alternative Project Delivery Alternative delivery can work to the benefit of the Owner DB/DBO - Typical Benefits • ADVANCED TECHNOLOGY • TIME SAVING ~ 30% • CAPITAL AND OPERATION COST SAVING ~ 10-25% • NO BUDGET OVERRUN - firm bid price • PERFORMANCE GUARANTEED • REALISTIC COST - live cycle considered • THOROUGH TRAINING MAKING MOST OF AVAILABLE TIME AND FUNDS

23. Finding the Right Model for Alternative Project Delivery Tender Strategy Motto: John Ruskin [1819 – 1900]: “It is unwise to pay too much, but it is worse to pay too little. When you pay too much, you lose a little money – that’s all. When you pay too little you may lose everything, because the thing you bought is uncapable to do the thing it was bought to do…. ...The common law of business prohibits paying a little and getting a lot – it can’t be done. So, if you deal with the lowest bidder, it is well to add something for the risk you run. And if you do that, you will have enough to pay for something better.”