Editorial Forum: Tapping the Creativity of the Design-Build Community

"You’ve got to be kidding!" was the reaction of Northern Division, Naval Facilities Engineering Command (NorthDivNAVFAC) after learning that the Navy Personnel Command (NPC) was not planning to use its services to provide a new Youth Center to support Navy families at the Naval Submarine Base in Groton, CT. Instead, they intended to go to a non-Navy agency to execute the work. Traditionally, projects such as this were routinely forwarded to our office for execution of design and construction. This was a true wake-up call to us that this valued client was not happy with our support … and we wanted to know why.

"It’s simple. You just aren’t listening to us!" was the response we received from Dave Ranson, facilities director for NPC in Millington, TN. The NPC representatives, who included Craig Chapman of the Facilities Directorate, stated they were extremely unhappy that our acquisition process defaulted to design-bid-build on nearly all the work we received. They went on to say that this design-bid-build mindset resulted in projects that were routinely late, over the budget, and full of costly surprises and contentious haggling. Additionally, the finger pointing between NorthDivNAVFAC, construction contractors and architectural/engineering (A/E) firms concerning field problems rarely resulted in satisfactory cost recovery by the client. "You’ve simply got to realize that cost over-runs on non-appropriated projects come directly out of the sailors’ pockets!" — said Dave, quite emphatically. He wanted to try something very different. And we were eager to listen.

NPC wanted to use a design-build process that would capture the creativity of the design-build community, in other words, have them develop the design solution to the detailed program our client had prepared. Under this concept, they would have the full freedom to exercise their design ingenuity and construction savvy to come up with their solution, free from any unnecessary, government-imposed design constraints. An outgrowth of this process is that the design-build contractor "owns" both the design and the construction. The Navy would essentially prepare a solicitation package without having put a line on the drawing board. Finger pointing was therefore not an option! We convinced NPC that we were eager and up to the task. And, the job was ours!

We decided upon a contract vehicle using the two-phase, best value source selection process. This was our first attempt at preparing a Request For Proposal (RFP) that did not contain at least a design concept. We were holding our breath, but we had an excellently detailed program from our client, from which we extracted data useful for design. Naval Submarine Base, Groton’s Public Works Department (PWD) provided us with the topography, borings and utilities information that went into the RFP package. The initial solicitation for interest was posted to our web site and it resulted in qualifications being submitted from five offerors. The Phase I selection board, consisting of NPC, Navy Morale, Welfare and Recreation, Public Works, and NorthDivNAVFAC reps then narrowed the field down to three.

To save the client time and money, we prepared the RFP in-house. The closest we got to a design was a functional adjacency matrix that depicted the client’s desired spatial relationships. The job of creating this "zero percent" design-build package fell to NorthDivNAVFAC Architect, John Fidler, who nearly single-handedly worked out all the intricacies. The total in-house effort required, from creating the RFP to making the design-build contract award, was accomplished for 1.3 percent of the estimated construction cost (ECC). By contrast, in-house effort in support of an A/E design was approximately 1.9 percent of the ECC for similar projects using the design-bid-build method. Much of the effort for the Youth Center RFP was expended in developing a format that minimized constraints yet protected Navy interests. Since this learning curve would not need to be repeated on the succeeding projects, we felt confident that yet additional in-house cost savings would accrue.

With the client’s concurrence, we issued the RFP with the following features:

• Told proposers exactly how much we were willing to spend on the contract award
• Gave "extra credit" to submissions which exceeded minimum area requirements for high value spaces
• Gave "extra credit" for an earlier completion date, using a rate based on liquidated damages. This dollar credit would be deducted from the proposer’s price (for selection purposes only)
• Gave "extra credit" for upgrades on approximately 20 building features where the client was looking for something more than the minimums stated in the RFP.

The response was amazing. Given that the proposers were not paid for their efforts, the products received went far beyond our expectations. We were surprised at the level of effort the proposers were willing to provide in their drawings and in the quality of the supporting documentation for the systems they proposed. Worthy of note is that even the unsuccessful proposers were very high in their praise of the RFP and, in particular, for the great latitude it gave them in developing their design solutions. We also got the impression that they might have competed harder had they known there would be only two other firms in the running for the second phase! The initial solicitation told them there would be a maximum of five firms selected for the final phase of the competition.

The client came out a winner. The client was delighted with the functionality and aesthetics of the successful proposal. But they got much more. The solution chosen by the selection board provided more square footage, higher quality features (actually gave the client upgrades on 18 of the 20 items listed), a shorter delivery period and a lower cost to the sailors. The contract was awarded for $2,498,000, nearly four percent less than the $2,600,000 available. Jim Campbell, AIA, architectural branch head, NorthDivNAVFAC, chaired the board that evaluated all three proposals and selected the winning firm.

Speed, Speed, Speed. The entire process, from the time the client authorized us to proceed until the D-B contract was awarded, took just 4½ months! And the client was projecting to be able to move into the new Center on the first day of the new millennium, just about 11 months after contract award.

Finished product in two-thirds the time. The traditional design-bid-build process would have taken us 10 to 12 months just to get to the point of construction contract award … and possibly another 12 months to complete the work. That, of course, was assuming that the low bid was within the available funding and that the low bidder was a "quality" contractor. To count on such a contract being completed within the originally contracted schedule and remaining at the bid price would be asking far too much! Assuming that all went well, we were projecting a total process time of 15½ months from the project kickoff meeting to beneficial occupancy, using design-build, as compared to 24 months using design-bid-build. The client could expect to get a finished product in two-thirds the time. They were elated.

Fast-tracked construction. The solicitation permitted the design-build firm to begin construction while the final design was being prepared. The green flag for proceeding with construction was given the same day the Navy accepted the design development documentation. Site clearing, excavation, and placement of foundations proceeded upon the government’s receipt of signed and sealed foundation drawings and structural calculations.

An enthusiastic team. We believed we got the process right. But a process is useless without a great team to execute it. The team assembled for this project was enthusiastic from the start. The cooperation among NPC, PWD, NorthDivNAVFAC’s Resident Office In Charge of Construction (ROICC) staff, Morale, Welfare and Recreation representatives, and our headquarters staff had been remarkable. We also had every indication that the design-build contractor we selected would be an excellent addition to the team.

Breaking the Stereotype. The design-build contractor team, Fletcher Thompson, Inc., Bridgeport, CT (A/E firm) and Newfield Construction, Inc., Hartford, CT (construction firm) had more than met our expectations and proved to be a source of innovation and inspiration. At the initial project meeting with the entire team, Dick Ostop, Newfield’s vice president, suggested that we think of involving the kids in the construction process as the project moved along. From his experience on other projects he found that when the kids actually get to sign their names to a beam or decorate a wall with tiles, enthusiasm builds and a sense of ownership develops. We realized then that we were certainly treading new ground, and it felt like a breath of fresh air!

NPC’s original intent to go to another agency for the design and construction of this type of project was just the catalyst we needed to become more inventive and less dogmatic in our approach to design and construction. Was this a "fluke" success story? Would the project continue to be as free from problems in the construction and post-construction stages?

We didn’t know for sure at contract award, but now, looking back nearly six years later, we can say with certainty that tapping into the creativity of the design-build community by using the zero-percent design RFP approach was a real winner for us, for our client and for the sailors and their families.

There was some unforeseen rock removal and some issues arising from inaccurately locating the building footprint that caused the total construction time to be extended by three months. And, there have been some recent settlement cracks appearing. But, in the overall, NPC was extremely pleased with this experiment and in the past six years has utilized the zero-percent-design RFP model very successfully on many similar projects. Parenthetically, Jim Campbell also used the same zero-percent D-B approach for several large non-NPC projects with similar success.

Craig Chapman recently stated that NPC projects, using this approach, have been completed at about 98 perent of budget as compared with 112 to 120 percent of budget when using the traditional design-bid-build approach. And equally important, this approach has consistently resulted in much faster execution timelines. That means getting high quality of life improvements to our sailors and their families much more quickly than ever before. And that’s a good thing too!