CMGC_Findings_of_Fact_Supporting_Exemtion_ODVA-070126.pdf

***DRAFT***

FINDINGS OF FACT AND ORDER GRANTING EXEMPTION

FROM COMPETITIVE BIDDING REQUIREMENTS

EXEMPTION # S-DASOBO-00017215

Before the State Chief Procurement Officer of the Department of Administrative Services of the State of Oregon

In the Matter of ) ****Draft**** Exemption Request of the ) Findings of Fact Department of Administrative Services ) and Order Granting Exemption To Use CM/GC Alternative Delivery Method ) from Competitive Bidding Requirements for the Oregon Department of ) Veterans’ Affairs (ODVA) New Roseburg ) Veterans Home

ORS 279C.300 and 279C.335(1) require, with certain exceptions, that all public improvement contracts be based on competitive bidding and, under ORS 279C.375, be awarded to the responsible bidder submitting the lowest responsive bid. However, ORS 279C.335(2) provides that the Director of the Department of Administrative Services (“DAS”), as the primary public contract review authority for the State of Oregon (“State”), may exempt, under certain conditions, a public improvement contract or a class of public improvement contracts from the competitive bidding requirements of ORS 279C.335(1) after the Director approves the findings that the contracting agency submits as set forth in ORS 279C.335(2). Under OAR 125-246-0170(3)(a)(C) the Director has delegated that exemption authority to the Chief Procurement Officer of DAS SPS.

DAS State Procurement Services (“DAS SPS”) performs procurements and contract administration on behalf of the Oregon Department of Veterans’ Affairs (“ODVA”). DAS SPS has received a request from the Oregon Department of Veterans’ Affairs to pursue an exemption from competitive bidding to allow for the use of Construction Manager/General Contractor (“CM/GC”) alternative delivery method for the construction of the Oregon Department of Veterans’ Affairs new Roseburg Veterans Home (“Project”). DAS SPS, in conjunction with Oregon Department of Veterans’ Affairs has prepared the requisite findings to support the Chief Procurement Officer’s approval of the exemption.

The Notice of Proposed Exemption and Draft Findings of Fact and Order were advertised in the Daily Journal of Commerce on July 1, 2026 and posted on the DAS website at:

www.OregonBuys.gov.

http://www.oregonbuys.gov/

I. Project Description and Background

ODVA is an agency of the State of Oregon that has been serving veterans and their families since 1945. One of the programs ODVA administers is the Veterans’ Home program, which provides skilled nursing and memory care to some of Oregon’s most vulnerable veterans. In 1993 the Legislative Assembly authorized ODVA to provide nursing care to veterans and their spouses through an Oregon Veterans’ Home, as defined pursuant to Oregon Revised Statute (ORS) 408.385. The legislature designated the Roseburg site as the location for a third veterans’ home during the 2011 Oregon Legislative Session.

The Project is anticipated to be 125,000—150,000 square feet and will deliver 154 single-occupancy, skilled nursing beds across a purpose-built, small-house model campus on approximately 14 acres located within the United States Department of Veterans Affairs (“USDVA”) Roseburg Veterans’ Affairs Health Care System campus. The USDVA will be transferring the 14 acres to the State for purposes of this Project.

The design is the product of a deliberate and informed process, shaped by the success of the Lebanon Oregon Veterans' Home, refined through operational lessons learned, aligned to current regulatory requirements under Oregon Administrative Rules, and grounded in the principles of the USDVA Small House design philosophy. The result is a campus that balances the residential character essential to veteran dignity with the clinical infrastructure required for licensed skilled nursing and memory care operations.

CBTWO Architects, which also designed the Lebanon Veterans' Home, serves as the design architect for this Project, carrying institutional knowledge directly from one campus to the next. OTAK, the Owner’s Representative for the past Lebanon Veteran’s Home, has also been retained for this Project. This continuity is a significant asset that has been leveraged throughout schematic and early design development to proactively address issues identified at Lebanon and to optimize the Roseburg program before construction begins.

ODVA has completed a significant amount of preliminary work on the Project. Key activities include submission of initial construction grant application to the USDVA State Home Construction Grant program, and completion of the site layout and schematic design, schedule, and development of pro-forma operating financial statements, with the design currently in the Design Development phase.

Based upon the current schedule, construction is slated to be completed by 2029, pending receipt of federal grant funding for the federal portion of the Project. If federal grant funding is not received in 2027, the construction schedule will be extended out a year, unless ODVA decides to provide an alternative funding source to cover the federal portion.

II. Description of Proposed Alternative Contracting Method ODVA studied various alternative methods of contracting as compared to the traditional design-bid-build (DBB) methods and has determined that the use of CM/GC or Construction Manager/General Contractor method would best serve this project, ODVA and the State. This project requires significant specialized expertise due to its location, federal funding requirements, complex site constraints, and the technical systems involved in a modern veterans’ home facility. The CM/GC method is uniquely suited to address these challenges because it brings the contractor, key specialty subcontractors, and design team together early in the process to collaboratively resolve constructability issues, evaluate system options, and strategically sequence work before construction begins. This early integration is especially important for a project that must coordinate with wetlands areas, multiple easements, off site and onsite utilities, and adjacent U.S. Department of Veterans Affairs Medical Center (VAMC) operations, as well as federal project standards, permitting, and infrastructure requirements.

Per ORS279C.337, ODVA through DAS SPS will seek to process the exemption and move to procure a CM/GC via Request for Proposal method of selection where qualifications, experience, approach, team and a variety of other requirements will be scored to select the best contractor as opposed to low bid method.

III. Findings Required by ORS 279C.335

Finding #1: ORS 279C.335(2)(a) requires an agency to find that: “The exemption is unlikely to encourage favoritism in awarding public improvement contracts or substantially diminish competition for public improvement contracts.” As required by ORS 279C.335(4)(c) and ORS 279C.337(1), DAS SPS will conduct the procurement for

CM/GC services in accordance with the applicable Oregon Department of Justice (“DOJ”) model rules utilizing a single-phase request for proposals (“RFP”). The Procurement will be formally advertised with public notice and disclosure of the planned Alternative Contracting Method, competition will be encouraged, Award will be made based upon identified selection criteria, and there will be an opportunity to protest that Award.

Accordingly, and for the reasons set forth in more detail below, DAS SPS and ODVA find that the proposed exemption is unlikely to encourage favoritism in awarding public improvement contracts or substantially diminish competition for public improvement contracts.

1. Public Notice and Disclosure of the Planned Alternative Contracting Method.

DAS SPS will utilize a competitive single phase RFP procurement process in accordance with the requirements of ORS 279C.337 and other applicable provisions of ORS 279C.300 through 279C.875 and the applicable DOJ Model Rules for procurements of CM/GC services. DAS SPS will comply with the requirement for public improvement advertisements as set forth in ORS 279C.360 and advertise the solicitation in the Daily Journal of Commerce. The solicitation documents will clearly disclose the CM/GC Alternative Contracting Method. The solicitation documents will be publicly available through the OregonBuys System.

2. Competition Will Be Encouraged.

The procurement process has been formulated to encourage competition. The selection process will be open and available to all qualified contractors. An open and competitive solicitation process will provide an opportunity for qualified contractors with experience in the CM/GC method to compete for the Project. Selection will be made based on price and non-price factors, thereby expanding the basis of competition beyond price alone, to include qualifications, experience, specialized expertise, innovation, and best practices factors. A possible mandatory pre-proposal conference, open to all interested parties, will also give the opportunity for potential proposers to ask questions, request clarifications and suggest changes to the solicitation documents.

3. Award will be made based upon identified selection criteria.

The solicitation documents will describe the evaluation criteria in detail and will specify the weight DAS SPS will give for each criterion, in accordance with OAR 137-049-0650. As described in OAR 137-049-0640, factors in addition to price may be considered in the selection process, but only as set forth in the RFP. Additionally, evaluation factors need not be precise predictors of future costs and performance, but to the extent possible such evaluation factors must be reasonable estimates based on information available to the Contracting Agency and shall: Treat all Proposals equitably; and Recognize that public policy requires that Public Improvements be constructed at the least overall cost to the Contracting Agency. For illustration purposes, evaluation criteria may consist of firm and personnel experience on similar projects, adequacy of equipment and physical plant, sources of supply, availability of key personnel, financial capacity, past performance, safety records, project understanding, proposed methods of construction, proposed milestone dates, references, service, and related matters that could affect the cost or quality of the Work. Evaluation criteria may also include the ability of the Proposers to respond to the technical complexity or unique character of the project, analyze and propose solutions or approaches to complex project problems, analyze and propose value engineering options, analyze and propose energy efficiency measures or alternative energy options, coordinate multiple disciplines on the project, effectively utilize the time available to commence and complete the improvement, and related matters that could affect the cost or quality of the Work.

As described in OAR 137-049-0640, the RFP may provide for discussions with Proposers to be conducted for the purpose of Proposal evaluation prior to award or prior to establishing any Competitive Range. Accordingly, the RFP will include a description of how DAS SPS will use interviews and a Competitive Range in the evaluation of the process and how DAS SPS will evaluate interview information received, including how scores from RFP proposals, interviews and any other evaluation criteria will be combined. Proposals considered complete and responsive will be evaluated under the criteria by members of the Evaluation Committee who will independently score proposals. The Evaluation Committee will rank the proposers according to the proposal and, if applicable, interview criteria, and provide an award recommendation. Proposal evaluation shall be as objective as possible.

4. Opportunity for Protest of Award.

In accordance with OAR 137-049-0450 (Protest of Contractor Selection, Contractor Award), an adversely affected or aggrieved Proposer will have the right to protest award.

Finding #2: ORS 279C.335(2)(b) requires an agency to find that “Awarding a public improvement contract under the exemption will likely result in substantial cost savings and other substantial benefits to the contracting agency.” In approving this finding, the type, cost and amount of the contract and, to the extent applicable, the items listed in ORS 279C.335(2)(b)(A) – (N), shall be considered. For the reasons set forth in more detail below, DAS SPS and ODVA find that the proposed exemption will likely result in substantial cost savings and other substantial benefits to the contracting agency.

1. Type of Contract.

As described in Section II above, the type of contract will be Construction Manager/General Contractor (CM/GC) per ORS 279C.337.

2. Cost and Amount of the Contract.

The current overall project budget is at a range of $99M-$135M where the construction budget amount is approximately 70% of those values or $69M- $99M range.

It is anticipated that the initial contract will authorize Preconstruction Services only until a successful Guaranteed Maximum Price (GMP) Amendment is executed for the construction services. Accordingly, at the time of award, only the preconstruction budget will be authorized.

3. Availability of Proposers: how many persons are available to bid. [ORS 279C.335(2)(b)(A)]

At this size, complexity and geographic location, and based off the project manager’s experience in Oregon over the last 28 years in the industry, it is anticipated no fewer than three and up to six firms may submit a proposal in response to an RFP.

4. The construction budget and the projected operating costs for the completed public improvement. [ORS 279C.335(2)(b)(B)]

As shown in #2 above, the construction budget range is currently $69-$99M. The forecasted operating cost of the new facility is based on Lebanon’s current annual operating cost of $30,000,000 and projected to be proportionally higher due to increased square footage, location, and inflation. Utilization of the CM/GC method will allow for constructability reviews, value engineering, and input on energy efficiency and alternative energy options as well as input on other design considerations, which supports lowering operational costs.

5. Public benefits that may result from granting the exemption. [ORS 279C.335(2)(b)(C)]

Procuring the CM/GC early on during design allows the team to effectively plan for and coordinate construction activities, which provides for improved construction timelines and construction administration, resulting in a completed Project on schedule. Additionally, early integration of the CM/GC allows for improved coordination with the VMAC operations and activities, which supports the development of improved safety measures during construction, including fencing and veteran walking paths. Further, the CM/GC allows for constructability reviews during design to ensure the highest quality and overall cost control, which is critical as a publicly funded project.

6. Whether value engineering techniques may decrease the cost of the public improvement.

[ORS 279C.335(2)(b)(D)]

The CM/GC method of contracting offers the greatest opportunity for meaningful Value Engineering because the CM/GC participates early in the design process and can provide informed input on constructability, material and system alternatives, product availability, and market-based sourcing strategies that support schedule and cost certainty. This collaborative approach is not available under the traditional DBB delivery method and often results in cost increases rather than decreases. Through the GMP structure, the project team is able to incorporate changes at lower cost compared to changes made outside a GMP contract, where traditional change orders typically carry higher premiums.

The CM/GC model also establishes a unified team structure in which the designer, contractor, and owner work together throughout design development to evaluate options, validate scope, and support continuous Value Engineering. This integrated workflow reduces downstream construction changes, minimizes delays related to long-lead equipment or material procurement, and improves alignment with operator intent for how spaces must function. By engaging the CM/GC in design-phase meetings with the end users, the team can identify alternative construction methods or solutions that meet the functional intent more efficiently and cost-effectively.

7. The cost and availability of specialized expertise that is necessary for the public improvement. [ORS 279C.335(2)(b)(D)]

As noted above, this project requires significant specialized expertise due to its location, federal funding requirements, complex site constraints, and the technical systems involved in a modern veterans’ home facility.

Many elements of the project will be delivered through subcontractors whose scopes are based on “performance specifications.” In these cases, the design team defines code requirements and functional intent, but the detailed system design is completed by specialty subcontractors. Under a traditional hard-bid delivery model, these design-build subcontractors are not engaged until after bid award, limiting the owner’s ability to influence system development, evaluate alternatives, or resolve coordination issues before construction. By contrast, the CM/GC approach allows these subcontractors to participate during the design phase, well before GMP establishment, creating opportunities for coordinated system evaluations, design optimization, constructability reviews, and proactive conflict resolution. This early involvement helps avoid the misalignment, redesign, and costly change management that commonly arises when performance-specified systems are developed post-award under a hard-bid model.

This project must also comply with the Build America, Buy America (BABA) Act as a condition of receiving federal funding. These requirements significantly affect material selection, sourcing strategies, and project scheduling. Having a CM/GC on board during design allows the project team to identify BABA-compliant materials early, design around compliance challenges, and develop procurement plans that anticipate long-lead or limited-availability items. When compliance is not feasible, the CM/GC can support ODVA by helping document supply-chain limitations, evaluate alternatives, and prepare the necessary justification for exemption requests.

This early and continuous compliance planning is essential to protecting project eligibility for federal funds and avoiding delays or redesigns later in the process.

One of the greatest risks mitigated by the CM/GC delivery method is the project’s need for flexibility and the ability to pivot as new information emerges. The CM/GC will participate in a structured preconstruction phase that brings together ODVA, the architect/engineer, the project manager, the City and County, the VAMC campus representatives, utilities, and other key stakeholders. Throughout this process, the CM/GC will lead efforts related to phase planning, bid-package scheduling aligned with market realities, constructability analysis, value engineering, and utility and site-work planning. This integrated preconstruction effort not only reduces the risk of scope gaps, conflicts, and procurement delays but also establishes a well-coordinated plan for transitioning into construction under a GMP that reflects accurate cost, schedule, and risk information.

8. Any likely increases in public safety. [ORS 279C.335(2)(b)(E)]

This exemption will result in an increase in public safety given the CM/GC firm will be brought on board early in design to plan during a preconstruction phase where safety and coordination between USDVA VAMC safety departments can coordinate and plan all construction activities well ahead of time instead of cramming safety planning in a two week hard bid scenario with no coordinated planning.

9. Whether granting the exemption may reduce risks to the contracting agency, the state agency or the public that are related to the public improvement. [ORS 279C.335(2)(b)(F)]

Granting this exemption will reduce the risk to ODVA, the state of Oregon, and the USDVA by reducing the amount of change orders and placing construction changes within the GMP via a contingency dedicated to construction.

One of the greatest risks mitigated by using the CM/GC method is project delays and cost increases stemming from the project’s complex site and regulatory conditions, becausethe

CM/GC is part of the Project team and can proactively respond to site issues and changing regulatory conditions. The site includes wetlands, multiple easements, extensive off- and on-site utility work, and adjacency to the USDVA VAMC campus, all of which require careful coordination and the ability to adapt as new information emerges. Federal funding requirements add another layer of complexity, requiring alignment with federal design standards, utility constraints, and campus-wide impacts. Because the CM/GC is engaged during design, the contractor can provide early input on constructability, system choices, site logistics, and operational intent thereby reducing unknowns and avoiding the significant change-order exposure commonly seen in a DBB scenario.

Early CM/GC involvement also allows the contractor to lead a structured preconstruction effort rather than mobilizing immediately into construction, as occurs under DBB. During this period, the CM/GC can plan project phasing, identify long-lead procurement needs, coordinate off-site utility improvements, and support wetland mitigation, NEPA-related assessments, archaeological or historic-preservation requirements, and soil-condition planning. This preconstruction work also supports schedule development, cost estimating, Value Engineering, and detailed constructability reviews so that by the time the GMP is set, the team has a coordinated and realistic plan. This level of planning simply is not achievable in a DBB environment, where the contractor must build from a completed design with no opportunity to mitigate risks before mobilization.

10. Whether granting the exemption will affect the sources of funding for the public improvement. [ORS 279C.335(2)(b)(G)]

Granting this exemption has no impact on the funding of the project.

11. Whether granting the exemption will better enable the contracting agency to control the impact that market conditions may have on the cost of and time necessary to complete the public improvement. [ORS 279C.335(2)(b)(H)]

The CM/GC partner becomes a part of the team during early planning and has flexibility in phasing to match the best time to bid various portions of the work. In a traditional approach of DBB the bid will occur at one specified time according to a hardline schedule and the market will determine the outcome with no flexibility. The CM/GC method allows the contractor to study, forecast and test the market to propose to the team the best interest bid climate, and when to bid certain pieces of the project.

12. Whether granting the exemption will better enable the contracting agency to address the size and technical complexity of the public improvement. [ORS 279C.335(2)(b)(I)]

Retaining a CM/GC allows flexibility in design and schedule changes since the CM/GC firm is on board early during design and before construction. This allows time to provide constructability reviews, schedule and procurement planning as well as phase planning to coordinate the complexity that will come with mitigating the wetlands, working alongside the USDVA VAMC campus projects, ensuring all utilities are separated and generally being good stewards of public funds and good neighbors to those impacted by the 14 acre land transfer to the state. As noted above, it also gives CM/GC the ability to understand operational and user intent and thereby prioritize particular items or systems.

Using the CM/GC delivery method best suits ODVA by maximizing construction planning during preconstruction. ODVA has a set GMP budget and the preconstruction phase will allow the CM/GC to provide constant updates to the estimate to verify budget or provide direction on Value Engineering activities. The CM/GC can best plan for meeting ODVA budget, scope and timeframe and project goals during this period, which benefits the contracting agency and ultimately the public.

13. Whether the public improvement involves new construction or renovates or remodels an existing structure. [ORS 279C.335(2)(b)(J)]

The project will be new construction.

14. Whether the public improvement will be occupied or unoccupied during construction.

[ORS 279C.335(2)(b)(K)]

The project will be constructed on a green field site, therefore, the building site itself will not be occupied during construction, however, the 14 acre parcel where the project will be built is surrounded by existing and in-use USDVA hospital activities, and will require the utmost care in site access and safety. The greenfield also has jurisdictional wetlands on it that require specialized requirements during construction.

15. Whether the public improvement will require a single phase of construction work or multiple phases of construction work to address specific project conditions. [ORS 279C.335(2)(b)(L)]

There will most likely be multiple phases on this project that could include early procurement of long lead materials and equipment. Other phases may include wetland mitigation, site work and main building phases as well as an offsite utility phase.

16. Whether the contracting agency or state agency has, or has retained under contract, and will use contracting agency or state agency personnel, consultants and legal counsel that have necessary expertise and substantial experience in alternative contracting methods to assist in developing the alternative contracting method that the contracting agency or state agency will use to award the public improvement contract and to help negotiate, administer and enforce the terms of the public improvement contract. [ORS 279C.335(2)(b)(M)]

The project team consists of a combination of agency personnel, DOJ legal counsel, and consultants that possess the necessary expertise and experience in CM/GC alternative delivery.

Oregon DOJ, DAS State Procurement Services, ODVA construction project managers, and hired Consultants have the necessary expertise, substantial experience, and substantial knowledge in using the CM/GC and other alternative procurement and contracting methods to successfully delivery this project within schedule and budget constraints.

ODVA has retained the consulting services of an experienced project management firm, Otak, which has extensive CM/GC experience in the Oregon public sector in addition to providing the overall management of the Lebanon facility in 2014, which was also constructed under a CM/GC delivery method. ODVA has an internal construction project manager who has experience in alternative methods of contracting. Finally, as part of the team, ODVA has retained an architect (CBTwo) who also has extensive experience with CM/GC GMP contracts in the state of Oregon.

CBTwo has worked on over a dozen successful CM/GC projects in Oregon including the Lebanon Veterans Affairs (VA) home. The project manager assigned to the project has worked on over 50 CM/GC projects in Oregon and was part of the public contracting coalition who developed the CM/GC white paper in 2002. The PM also worked on the Lebanon VA project as ODVA project manager.

DAS SPS will execute the procurement and provide contract administration services for the CM/GC. DAS SPS has performed this role for six (6) previous Alternative Delivery Projects.

Megan Saunders serves as the DAS SPS Senior Contract Specialist assigned to lead the procurement for this project. She has over fourteen years in public procurement experience and has successfully procured and executed CM/GC, Design-Build, and other Alternative Delivery contracts.

DOJ will review and authorize for release the final solicitation documents and will review and approve the resulting CM/GC contract for legal sufficiency prior to execution. Furthermore, DOJ will provide assistance during resulting CM/GC contract negotiations, as well as in the ongoing administration, amendment and enforcement of the resulting CM/GC contract.

IV. Additional Findings

ODVA or DAS have managed the CM/GC projects listed on the table below. These projects were successfully constructed on-schedule and within the established GMP.

Project Name Delivery Method

Agency Year Completed

GMP

Lebanon Veterans

Home

CM/GC ODVA 2014 $32,382,907

Justice Building Renovation

CM/GC DAS EAM 2022 $7.6M

North Valley Complex

CM/GC DAS EAM 2023 $87M

Executive Building

CM/GC DAS EAM 2024 $53M

550 Building CM/GC DAS EAM on behalf of DOJ

2024 $8.5M

OLCC

Warehouse

CM/GC DAS EAM on behalf of OLCC

In progress $93M

*******CONCLUSIONS ***********

Findings have been developed in compliance with ORS 279C.330, 279C.335(2), 279C.335(4) and 279C.350, applying the criteria required by ORS 279C.330(2) and 279C.335(2).

DAS has completed the public notice process and considered any feedback it received in the preparation of these findings. Based upon these findings, DAS has determined that an exemption from competitive bidding requirements is justified for the Roseburg Veterans’ Home Project using the CM/GC alternative contracting method and finds:

1. Following the selection process described, an exemption is unlikely to encourage favoritism in the awarding of the public improvement contracts or substantially diminish competition for the public improvement contracts; and

2. Award of the public improvement contracts pursuant to the exemption will likely result in substantial cost savings and other substantial benefits to DAS, ODVA, and the public.

ORDER OF CHIEF PROCUREMENT OFFICER

An exemption from public competitive bidding requirements for the Project is hereby granted to DAS SPS and ODVA to enter into the described public improvement contracts using the CM/GC alternative contracting method. This Order is subject to the following conditions:

1. To the extent feasible, and consistent with this exemption, this procurement will follow the applicable provisions of ORS Chapters 279A and 279C and OAR 137 Division 49.

2. DAS and ODVA, in concert with the Oregon DOJ, shall establish and follow standards for evaluating proposals under this procurement and for making contract awards.

3. DAS shall work with the Oregon DOJ to develop suitable contract language for the contract and shall incorporate into the contracts such additional or substitute terms that ODVA and the Oregon DOJ may determine to be necessary for compliance with Oregon law and other applicable law or otherwise appropriate for the protection of the State.

4. Upon completion of the Project, DAS and ODVA shall evaluate the Project in accordance with the requirements of ORS 279C.355 and OAR 137-049-0620(3) and will summarize the evaluation in a public report. The evaluation will include actual Project costs, the GMP amount, the number of Project change orders, a narrative description of the successes and failures during the design, engineering and construction of the Project and an objective assessment of the impact of the CM/GC process as compared to the findings in this exemption request. In its evaluation, DAS and ODVA will also compare the actual CM/GC contracting costs to estimated costs if DAS had used a traditional DBB approach.

THE PRECEDING FINDINGS AND CONCLUSIONS ARE HEREBY INCORPORATED,

APPROVED AND ADOPTED.

Darwin Kumpula, Deputy State Chief Procurement Officer for Kathryn Jones, State Chief Procurement Officer Date Department of Administrative Services

REVIEWED BY THE DEPARTMENT OF JUSTICE

Andrea Goodwin By email 6/10/2026 DOJ Attorney

ORDER OF CHIEF PROCUREMENT OFFICER