Design-build team leader Hensel Phelps Construction Company completed, and the University of California opened, the new Los Alamos National Laboratory National Security Sciences Building (NSSB) in April 2006. The DBIA project award winning $97 million, eight-story building that houses scientists working on the country’s difficult national security challenges the country faces. Housing about 700 staff members, nearly as many offices, an auditorium and parking, the 275,000-square-foot facility replaced an outdated, 45-year-old structure.
As a seasoned design-build firm, the Hensel Phelps team included HDR Architecture, engineer firms Chavez-Grieves, Bridgers & Paxton and Bohannan-Hudson, along with specialty contractors Gardner Zemke, Sites Southwest and Walker Parking Consultants. After more than 550,000 man hours, there were no lost-time injuries, it was completed ahead of schedule and for $5 million less than Congress approved for the project.
But many design-build firms and others might not have a good handle on some of the nuances of a federally-funded project. It is clear, that design-build is the delivery method of choice, ensuring little, if any, litigation, very limited change orders and typically a faster project, from conception to completion.
But when dealing with government-funded projects, the process is often dictated by external forces. These forces matter little to the look, size and quality of the actual structure, but they often are the drivers behind available funds and the schedules that lead to a finished product.
With that, Keith R. Orr, a project director at National Security Sciences Building Projects provided some insight for DATELINE about the federally funded building project process.
DATELINE: What would the primary differences be between a federally funded project and a privately funded one?
Keith Orr: Federally funded projects are unique in a number of ways. First, there are “phase gates” that the project must go through. In a typical project, approval is given for design only. Then the project undergoes a series of reviews before it goes into construction. This “delay” can range from weeks to months to, in some cases, fiscal year changes. The federal system has found it necessary to adapt to the design-build delivery system inasmuch as the critical decision process, which normally consists of CD-0 (approval of mission need) to CD-1 (approval to start preliminary design) to CD-2 (approval of project baseline — typically approval to start definitive design) to CD-3 (approval to start construction) and CD-4 (approval to start operations). [This] had to be modified. In the case of NSSB we asked for and received CD-1, CD-2 and CD-3 simultaneously. As far as I know, this was the first time in the DOE/NNSA complex that all three critical decisions had been approved at the same time.
Projects completed within the federal system are subject to availability of funds. While it is true that all projects have the same limitations, it is not typical for funding to dictate schedule on a year-by-year basis. For example, if the Congressional Project Data Sheet (CPDS) indicates that a project will receive $26 million in 2008, and the budget is cut, that project may receive something less, say, $20 million. Now the project manager has to have some amount of carry-over funding for the next fiscal year as it’s a sure bet that the 2009 money won’t show up on the first day of the fiscal year. As a result, the [project manager] may ask the contractor to slow their progress such that they do not bill more than some subset of the $20 million for a given fiscal year. This keeps the game interesting in that this postulating and positioning is repeated every fiscal year throughout the life of the project.
In privately funded projects, owners don’t typically hold the original schedule throughout the project. In a federally funded project, the contractor is held to the ANSI/EIA 748 Earned Value Management System (EVMS) in which performance is always tracked against the baseline established with the original schedule. That is to say that while the contractor may create/update a working schedule through the course of the project ... changing logic, shifting resources, etc., the progress is always measured against the baseline plan.
In federally funded projects the “owner” becomes somewhat confusing. The owner from a contractual point of view is generally the operations and maintenance contractor for the particular facility — in the case of NSSB this would have been the University of California for the Department of Energy at Los Alamos National Laboratory. The owner from the point of view of who will be responsible for the asset for the federal government is the Department of Energy.
An interesting side note — when DOE Order 413 was fairly new there were no allowances for the design-build delivery system. Following the Cerro Grande Fire in 2001, we [LANL] established a memorandum of understanding with the [DOE] delineating how/[and] why the design-build delivery system would be used on that federally funded project.
The most attractive aspect of the design-build delivery system is the transfer of risk — particularly in the risk averse budget system we find ourselves in today. In the typical design-bid-build delivery system, the cost of conflicts between engineering and construction are, more often than not, borne by the owner whereas in the design-build delivery system, the two parties have a vested interest in coming up with the most economic solution in the most expeditious manner possible and the owner doesn’t have to come up with more money. This is a huge benefit, particularly when considering that coming up with more money takes, literally, an act of congress.
DATELINE: What changes in this often convoluted federal process would you like to see in the future?
I believe that the federal system is changing as a direct result of the success of the design-build delivery system. As mentioned above, DOE O 413 didn’t mention the design-build delivery system back in 2001 whereas today, it is an integral part of the order.
DATELINE: How unique was the Los Alamos project vs. other federally funded projects on which you’ve worked?
One of the things that makes NSSB unique among other federally funded projects is the architectural approach. ... I believe that the approach used is more “Function Follows Form” rather than “Form Follows Function”... that is to say that most federally funded buildings are designed and built with function as the primary consideration. In the original administrative building for Los Alamos, one of the requirements was for “Spartan Simplicity” … well, they accomplished it as do most federally funded buildings. It worked for 40-plus years but it’s ugly as a mud fence. The thing that makes NSSB unique, particularly in the DOE complex is it’s striking good looks ... it’s just a damn good looking building, and oh, by the way, it works great at the same time.