Delivering Design-Build Healthcare Projects in CA

Though many participants in healthcare projects in California have experienced some satisfaction and success, an increasing number have experienced dissatisfaction, budget overruns, and schedule delays. Why is this? Healthcare projects are among the most difficult to deliver and have to contend with delays in design, shortages of qualified design and construction professionals, delays in plan review and approval, escalating construction costs, frequent significant medical equipment changes, and changing hospital and physician needs. Permitting delays, subjective inspections driven by “current best practices,” changing seismic standards, and a shortage of qualified client and inspection staff further challenge a project. The shortage of field labor, poor construction sequencing, the continuous jockeying for position between trades, and the significant starting and stopping of activities round out the list. Multiple and frequent change orders and construction cost impacts outcome. So how can we improve the results? An organized design-build project approach can go a long way to mitigate some of these impacts.

Context

Before we begin, it is important to understand the context of this article. It is written from the perspective of a full-service mechanical contractor who has participated in the design, construction, and maintenance of healthcare facilities built for several owners using many delivery systems and with teams that have ranged from collaborative to fractured and adversarial. Mechanical and plumbing are usually the largest cost and most critical systems in the healthcare facility.

A full-service mechanical contractor is one that has in-house capability and capacity to design, detail, fabricate, install, commission, and maintain the HVAC plumbing and medical gas systems in acute care and related healthcare facilities.

There are many integrated project delivery systems in use today. The facts show that projects delivered using design-build result in six percent lower project costs, take 33 percent less time to deliver, and are of higher quality than those delivered under design-bid-build. Healthcare projects using the design-bid-build delivery method in California are performing as poorly, or worse, than predicted. Some owners have used or are beginning to use design-build as an alternative. What is concerning is that there are a host of projects being called design-build which are merely design-bid-build projects in disguise. The key question for the party holding the prime design-build contract is: how are you contracting and when are you selecting the construction component of the design-build team?

Design-build is a project delivery system where the owner contracts with one entity (that has named all its key team members in the proposal) to design and construct the facility. That entity may perform all of the functions in house, but usually they subcontract most of the work. Some of the systems design and construction may be subcontracted on a design-build basis, a design-assist basis, or a design-bid-build basis. One of the key factors for successful design-build delivery (according to the Penn State/CII project delivery study) is that the critical specialty subcontractors are engaged and involved at the start of design but no later than the schematic design phase. This is the key to success for the best projects. Some so-called design-build options (e.g., design-build bridging) do not contractually commit the people who do the work (the specialty contractors) in the schematic design where most value is added. This frequently leads to similarly poor project results as those achieved with design-bid-build projects.

The state of California has imposed several requirements on healthcare facilities. SB1953 requires healthcare providers to upgrade the seismic performance of critical care facilities and their systems to ensure that they are operational following a major earthquake. The Office of Statewide Health Planning and Development (OSHPD) is the statewide office for ensuring that these facilities meet the requirements. There are several design reviews to ensure compliance with the law. The first is the initial OSHPD plan review which can last between nine months to a year. Next there are several stages of resubmission and checking called back check 1, 2, 3, etc., that should last between 30 and 120 days per review. The final stage is a process for an over the counter permit with instant approval for basic mechanical, electrical, plumbing (MEP) changes. Because the design changes may be significant, the seismic bracing permit is usually deferred until the design is complete and it is coordinated internally for that trade and externally with other building systems and components. These deferred approvals are obtained through OSHPD, by area, in a sequence similar to the construction of the building.

Any changes to the drawings require change orders to go through a similar process. Once in construction, several individuals have responsibility to ensure the seismic safety of the facility. They have the authority to add requirements beyond those on the approved drawings.

A Proposed Solution

The proposed solution, which has been proven in other market sectors for very complex facilities, is to select design-build project teams early, at or about the program stage of a project. The teams should consist of all the parties designing, constructing, and maintaining the facility. Teams should be selected on their proposed project team members, their proven methodology, and their ability to deliver as promised.

People ask - why have a specialty contractor involved in this process early? As design-builders, we must think differently than the typical engineering consultant, the typical sub consultant, and the typical construction subcontractor. We must use the knowledge that each part of the team has gained and proactively incorporate it into the design and construction before any design work is completed. This means that we need to express our experiences in language that can be understood by the other parties before they start down the design, detailing, or construction path.

Some of the thought processes for engineering in the design-build process should include:

• Provide exactly what the customer needs, not what we think they want. We shouldn’t be designing a Cadillac if all they need and are willing to pay for is a Chevrolet.
• Right size equipment, systems, and materials. We are constructing these systems and do not need to include additional safety factors.
• Do not duplicate information. As engineers in design-build, we do not need to repeat items and include defensive “CYA” language.
• Design only to the point which is necessary to communicate what needs to be built. The rest is waste. We need designs that can be built, not designs that will be bid out or developed to avoid change orders.
• Integrate and hand over to detailing as soon as possible. Some tasks are better suited to detailers. Do not spend time in trying to coordinate areas that a detailer will coordinate later or route materials that a detailer can do better or more easily. Let the person who is best qualified develop the information.
• Be innovative! We need to provide value to our customers. Sometimes, this involves thinking out of the box. Do not be afraid to explore new ideas and new products. Do not just copy specifications from prior projects. In one case this would have cost a client a 25 percent premium on their construction cost and an increase in operating costs.
• Design with constructability in mind. Again, we are trying to provide the best value to our customers. This is aided by looking at the combined cost of design and construction. Use proven company standards for installation and material selection.
• Simplify. For example, it may sometimes be more cost-effective to keep a pipe riser the same size for the entire riser instead of reducing as it goes up or down the building.
• The design should include and uncover all aspects to ensure scope is clearly identified and assigned between the trades. One classic example is interconnecting power and control wiring for HVAC and plumbing equipment.
• Review the estimate to understand where the major costs are in the design and to ensure the design intent was properly interpreted by the estimators.
• Listen to your builders. They have great solutions from real-world experience that can save the project costs and time. For example, it is significantly more costly to right size a header and then use Tees on the branch lines than to over size the header and saddle the branches into the header.

Relevant Construction

Field Input

Our builders provided many valuable inputs during the design phase. For example, during the schematic design phase of the mechanical system the following items must be driven by the field. The biggest impact is realized through involving experienced superintendents from the schematic design phase through working drawings to help the team do the following:

• Review design basis and scope of work
• Develop project delivery plan
• Provide field advice on material type and selection
• Define engineering and detailing scopes of work/ integration
• Validate project scope, construction standards, and productivities
• Meet with code authorities and inspectors to determine the unwritten expectations and the unenforced rules
• Develop the construction schedule and sequence
• Review equipment selections and finalize
• Develop submittal priorities
• Review installation details/standards/specifications
• Review equipment schedules — make sure we are buying the best equipment
• Review preliminary equipment room, shaft, and riser layouts
• Review total plumbing load/pipe size for ground floor
• Begin space coordination with other trades and set rules
• Update the estimate
• Develop pull schedule for design/detailing drawings
• Develop branch layout concepts
• Optimize the central plant
• Remove extra footage and fittings
• Integrate systems, e.g., fabricate shaft support steel and provide to concrete contractor to use as a pour stop/blockout.
• Verify that the equipment selections hit the sweet spot for the preferred manufacturer (lowest cost per unit of output, e.g., $ per CFM for an air handling unit)
• Provide input to engineering and detailing on system routing to minimize potential interference walls

Operations and Maintenance Role

Our team would also expect input from the operations, maintenance, start and test, and commissioning teams, and our in-house experts on systems, controls, equipment, materials and operating components. Their input would include:

• Verify that the drawings indicate a clear scope between all trades. HVAC start and test typically fill in the gaps left between electrical and controls.
• Provide input for system start-up, testing, and commissioning.
• Verify equipment clearances for adequate serviceability.
• Recommend a specific service program to be included in the operational manuals and training.
• Locations of valves and control points for easy access and operability.

Project Management Role

We have found that the best projects usually have a general contractor with an MEP coordinator who understands that the cost of systems outweighs the cost of the skin, structure, and finishes. Therefore the contractor needs people with MEP expertise in the room with them as a partner. The best MEP coordinators know when to bring the specialty design-build subs with them to the owner. They do not try to be experts in this field and are focused on really building a team.

The specialty contractors’ design-build project manager must have the skills to manage the overall process from design, through detailing, fabrication, construction, and commissioning to maintenance and operations. They must also provide critical input to the architect and structural designer on the effect of their design and changes on the MEP systems. They:

• Track design changes and manage the implementation of change into the design process.
• Communicate quickly and clearly to the owner all design changes that have both positive and negative cost impacts.
• Lead the team to explore all options.
• Maintain constant communication with all trades and design team members to ensure smooth information transfer.
• Solicit input on layout that will decrease the amount of pipe, duct, fittings, and equipment to move the fluids (air, water, gases, waste) to and from patients.

The Owner’s Role

The hospital’s design standards, defined room templates, and equipment data base of preferred equipment is critical to the detailer. The detailer can determine the number of points of connection, supply needs, connection details, utilities needed, and constructability of installation details. They can also plan the best method to move the equipment into the facility. This information is essential to determine the correct price and to completely design and detail the installation.

The owner should also:

• Define owner supplied, contractor installed equipment and owner supplied, vendor installed equipment.
• Carefully evaluate changes that need to be made to the layouts or equipment. The owner has complete control of the costs of these changes by how and when they implement these changes.
• Send qualified representatives to the meeting who can make timely decisions. Any decision costs much less than no decision.
• Seek qualified input from builders to establish realistic budgets and schedules.
• Define design and construction standards/performance criteria at the start.

Other Trades

Trade coordination during the design/detailing phase is key to ensuring a design that is coordinated among trades and minimizes the number of interferences in the field. Two key functions are:

• Coordinate major routing as early as possible.
• Provide input on cost impacts to suggested design changes so the total project costs can be properly evaluated and the right project solution is selected.

OSHPD

OSHPD plays a critical role in the delivery of projects. There is a poor understanding of OSHPD by the working people in the construction process. OSHPD has been blamed for significant delays to projects via slow turnarounds of design reviews. One of the causes for this is that the architect may use OSHPD as his/her QC check and reviews take much longer than expected. This in turn causes significant changes to a completed mechanical submission that may have been approved on its first pass through OSHPD with minimal comments, as we have experienced. Another OSHPD delay is caused by inspectors adding extra work to the drawings because in their opinion it is needed. This has added significant increases to the costs of systems, which the client has to ultimately pay for.

Results

Our results show that when we have been engaged as the design-build specialty contractor in the schematic design or earlier, we can get the right field input in that phase. We can build a relationship with the client, the relevant agencies, and the inspectors so we are able to better respond to changes and requirements.

Results show that the design submitted for plan check can be approved with very few comments, the number of back check revisions decreases substantially, and both the inspectors and our installers have a clear idea of what to inspect. Early meetings with inspection teams result in clear understanding of project scope and standards and a relationship of trust is developed. Once these needs are met, it is easier to establish a real price for the facility.

We encourage owners to take the lead in demanding a team approach to design-build delivery of healthcare facilities. It can work well if you have the courage to change your organization.