Those in the water and wastewater treatment plant design and construction market face a major hurdle when trying to couple the use of an alternate project delivery methodology, such as design-build or construction manager (CM) at-risk with state revolving fund (SRF) monies.
We spend a great amount of time and money finding that owner who would benefit from using an alternative approach, then developing a trusting relationship with that owner. The question, “How do you plan to fund your project?” is pertinent and may sway the project away from an alternative delivery, even if it is clearly the best method for procuring the work.
At a recent South Carolina Environmental Conference, I attended a panel discussion in review of a South Carolina design-build project, which included a representative from the South Carolina Department of Health and Environmental Control (DHEC). During the discussion he mentioned DHEC had no problem with alternate project delivery, and as a matter of fact, saw it as a viable way to procure water/wastewater plant projects. I asked if state revolving fund monies were available for that sort of delivery and the DHEC representative said, “Currently, this is a problem.”
We talked afterwards and he wanted to find a way to use revolving funds for these projects. He felt when DHEC gave a utility a deadline to bring their treatment plant into compliance, then didn’t allow a fast-track procurement solution due to the selected funding source, they were a part of the problem and not the solution.
As a result, DHEC put together a list of concerns, we met and discussed them and then took time to review.
In the meantime a South Carolina Utility Authority wanted to use construction management at risk for an upcoming wastewater treatment plant that would use revolving fund resources. DHEC suggested we get together and combine efforts.
The group consisted of five South Carolina utility authorities, three engineering companies (regional and national) and three contractors (regional and national) — all of which either had experience in alternative project delivery methodologies or had projects where they were considering using APD methodologies.
We worked out various scenarios that would satisfy DHEC’s needs. We presented the information. At that time we were asked to separate construction management at risk and design-build and focus on the at-risk option. In the end we successfully developed procedures for construction management at risk and have opened the door and will reconvene and develop procedures for design-build in the future.
As we worked with DHEC on the at-risk procedures, South Carolina was in the process of amending their procurement code to include enabling legislation for all alternate delivery methodologies. The amended code was approved and signed by the governor in February 2008. State Rep. Kenneth “Kenny” Bingham worked closely with DHEC and was instrumental in expediting the approval for using revolving fund monies to fund design-build projects. This was approved in July 2008. Even though the process has been approved, the next step is to “tweak” the procedures approved for CM at-risk to fit design-build.
The success of this achievement was made possible because of a common goal shared by a “team” of legislators, regulators, utility providers, engineers and contractors. In a relatively short period of time, enabling legislation was passed to allow all alternative project delivery methodologies and new procedures were developed for using state revolving fund monies for projects using alternate delivery methods. We hope to have similar successes in other southeastern states.
Mark Dickson is business development manager for Crowder Construction Company.