Findings for Design Build Exemption Jan 23 2025.pdf

Union Gospel Mission of Salem

FINDINGS FOR EXEMPTION TO USE DESIGN-BUILD ALTERNATIVE CONTRACTING

METHODOLOGY

Introduction Union Gospel Mission of Salem intends to remodel its shelter for women and children under a competitive Alternative Contracting Method for the procurement of goods and services for the remodel and renovation of the Simonka Place Women's and Children's Project.

Background Marion County received a $67M American Rescue Plan Act (ARPA) federal allocation in June 2021.

From these funds, the Marion County Board of Commissioners awarded $1.4635M to UGM of Salem to remodel "Simonka Place" in Keizer, Oregon at an estimated construction cost of $3.5M.

The Project consists of the design and construction of the shelter to increase its bed capacity and new family-sized apartments. With these operational needs, UGM intends to update the entire structure with interior and exterior upgrades, including windows, lighting, floor-coverings, pluming, fire safety, and security systems. Project funding consists of these RPA funds, grants from foundations, private donors, and community fund-raising events. The HOME-ARP funds must be fully obligated by December 31, 2024, and fully expended by December 31, 2030.

Marion County Public Contracting Rules (MCPCR Section 40-0610(2), (6)) identify Design-Build as an alternative contracting method and provide detailed procedures for the procurement process. In accordance with ORS 279C.335, the Board of Directors of UGM, acting as the Contract Review Board (Board), may authorize this alternative contracting method as an exemption for public improvement projects when justified as prescribed in public contracting code.

Findings

The Board of Directors has identified Alternative Contracting Method as the most appropriate and preferred procurement alternative for this Project. The public benefits of using Design-Build Project Delivery in this context are as follows:

1. Design-Build maximizes competition because any and all firms representing manufacturers capable of satisfying the owner’s performance specifications are qualified to submit a competitive proposal.

2. Design-Build eliminates wasted time and expense associated with the development of fully detailed bid documents.

3. Design-Build minimizes the project delivery timeline, which is essential to satisfying the aggressive funding deadlines mandated by ARPA.

4. Design-Build places performance obligations on the contractor. In low-bid procurement, the owner carries these risks.

Design-Build Project Delivery mandates the use of Best-Value contractor selection, an Alternative Contracting Method that uses a combination of price-based and non-price-based selection criteria, in lieu of low-bid procurement. The use of Best-Value contractor selection ensures contract award is made to a qualified proposer that provides the best combination of quality and price meeting the the owner's operational requirements.

A. Statutory Requirements

The Department desires to use an Alternative Contracting Method for the Project. Oregon public contracting code, as set forth in ORS Chapter 279C, allows public agencies to use competitive Best- Value contractor selection for public improvement contracts and provides flexibility in both proposal evaluation and contract negotiation under specific conditions and when authorized by the Local Contract Review Board. ORS 279C.335 requires the Local Contract Review Board make certain findings before authorizing the use of an Alternative Contracting Method. These findings must demonstrate the following:

1. It is unlikely that an exemption from the competitive bidding requirements of ORS 279C.335 will encourage favoritism in the awarding of the public improvement contract or substantially diminish competition for the public improvement contract.

(1) The use of Best-Value contractor selection and Design-Build Project Delivery maximizes competition by enabling a multitude of radio manufacturers to submit competitive proposals using their own proprietary products, systems and designs. The solicitation will be publicly advertised to ensure a fair, open, and competitive process.

(2) Best-Value selection will be based on the following selection criteria using a uniform scoring system:

i. Proposer qualifications and experience,

ii. Proposer’s project approach and management plan,

iii. Proposer’s work plan and proposed delivery schedule,

iv. Proposer’s staffing plan and cost control measures,

v. Proposer’s proposal design and conformance with County’s specified performance requirements,

vi. Proposed price, and

vii. Other factors specific to the Project.

(3) The Best-Value selection process used to determine the highest-ranking proposal(s) will be based on a team review of weighted evaluation criteria identified in the solicitation.

(4) The solicitation will include requirements pursuant to federal, state and local public contracting code to ensure fair and open competition for subcontractors or sub-consultants.

2. Awarding the public improvement contract under an exemption from the competitive bidding requirements of ORS 279C.335 will likely result in substantial cost savings and other substantial benefits to the County or the public.

(1) Allowing proposers to base their proposals on their designs enables UGM to not incur additional and separate costs for design, saving tens of thousands in soft costs.

(2) The use of Design-Build Project Delivery saves on hard-costs for construction by allowing project management the ability to react to unknown "as-built" existing structure and utility flaws requiring flexibility to correct.

(3) Price will be a significant factor in the scoring of proposals, ensuring the UGM does not pay a premium.

In reviewing this exemption from competitive bidding, the Local Contract Review Board has considered the following factors:

B. Competition/Favoritism (279C.335 (2)(a)):

Awarding the project under an exemption from the competitive bidding requirements of ORS 279C.335 is unlikely to encourage favoritism in awarding public improvement contracts or substantially diminish competition for public improvement contracts.

1. The use of Design-Build Project Delivery will maximize competition.

2. The solicitation will be publicly advertised to ensure a fair, open, and competitive process. The County will use a formal competitive process for selecting a public improvement contractor.

The procurement process allows UGM to select the firm best suited for the Project based on factors such as experience, past performance, schedule, project delivery plan, proposed technical solution, price, value, and other factors specific to the Project.

3. Objective selection criteria and a formal selection process will be included in the Project solicitation for selection of the selected contractor. The selection process to determine the highest-ranking proposal will be based on a team review of equally-weighted evaluation criteria identified in the solicitation.

4. The Project solicitation will include requirements pursuant to federal, state and local public contracting code to ensure fair and open competition for any subcontractors or subconsultants.

The public improvement respondents must follow specified procedures subject to the applicable state and local public contracting code for soliciting, receiving bids, and awarding any subcontracts.

C. Findings Criteria ORS (279C.335 (2(b:

Awarding the Project under an exemption from the competitive bidding requirements of ORS 279C.335 will likely result in no significant increase in total Project costs because (1) price will still be a significant factor in the scoring of proposals, and (2) the use of Design-Build Project Delivery will significantly reduce cost risk to UGM.

As set forth in ORS 279C.335, the justification of the exemption shall include consideration of other substantial benefits, including, but not limited to:

1. Availability of persons to bid. The Department anticipates response from multiple qualified proposers, situated both locally and from larger markets. The use of Design-Build Project Delivery will maximize the number of potential respondents capable of submitting a responsive proposal.

2. The construction budget and the projected operating costs for the completed public improvement. The constructed Project will be developed to match available funding, which currently totals $3.5M.

3. Public benefits that may result from granting the exemption. This project is funded using American Rescue Plan Act (ARPA) funds, one-time funding that expires December 31, 2026.

Obligation and expenditure deadlines associated with ARPA are extremely aggressive for a project of this size and complexity. The opportunity to fund Simonka Place renovations/ remodeling is unlikely to occur for the foreseeable future through other funding sources.

4. Whether value engineering techniques may decrease the cost. Value Engineering is largely not applicable to this project.

5. The cost and availability of specialized expertise that is necessary. Not largely affected by this contracting method for this project.

6. Any likely increases in public safety. With daily influx of women and children coming in for shelter from the public, coordinated design and build can be effective in reducing risk on a construction site with occupancy still occuring.

7. Whether granting the exemption may reduce risk. The risk of uncoordinated different construction work in proximity will be reduced by having one contractor to coordinate both both design and build.

8. Whether granting the exemption will affect the sources of funding. ARPA funds may be used with Alternative Contracting Methods. This exemption will not affect the sources of funds.

9. Whether granting the exemption will better enable UGM to control the impact that market conditions may have on the cost of and time necessary to complete the project.

The use of Design-Build Project Delivery is the predominant means of delivering projects of this type, so prospective proposers will be familiar and well versed in this project delivery technique.

10. Whether granting the exemption will better address the technical complexity of the project. The use of Design-Build Project Delivery allows flexibility to adjust to unforeseen flaws or unknown "as-built" issues not known until work is being performed with aspect of unknown existing as-built configuration of the existing utilities. Since there are no records of the building’s initial build-out there is limited information on the building’s systems and how they are configured, and how they may have been modified over time. The Design-Build process allows the applicable subcontractor to investigate the existing conditions in a more detailed manner, and design a solution that may be more efficient and construction-friendly than a design consultant that doesn’t have full information and best understanding of efficient construction practices. It also compresses this process, shortening the development timeline, which will result in lower costs due to escalation.

11. Whether new construction or renovates or remodels an existing structure. As previously stated, renovating this structure is best managed using Design-Build contracting methodology.

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

Simonka Place must remain operational while the renovation improvements are under construction, which is most compatible with Design-Build Project Delivery.

13. Whether the public improvement will require a single phase of construction work or multiple phases of construction work to address specific project conditions. Project phasing is compatible with Design-Build Project Delivery.

D. 14. Public and private personnel assigned to project. UGM has limited personnel resources to apply to this Project. Design-Build Project Delivery significantly reduces demands on UGM staff, enabling delivery of this Project using existing personnel resources

D. Competitive Bidding Strategies This procurement is expected to attract ample bidding competition. The proposed Alternative Contracting Method is consistent with the experience and expectations of contractors performing work in this market. Selection of the contractor will involve a competitive proposal process utilizing both price-based and non-price-based selection criteria. The contract resulting from this procurement will be categorized as a Contract for Public Improvement as defined in public contracting code, subject to all public contracting rules, including but not limited to labor regulations, retainage and payment, bond, insurance and warranties.

E. Conclusion

Based on the foregoing, the findings outlined above justify the proposed exemption and use of an Alternative Contracting Method. The use of an Alternative Contracting Method will benefit the public by providing a project delivery approach that results in the best value, least risk and most likely opportunity to acquire the needed specialized technical solution for the Public Safety Radio Communications System Project within existing funding deadlines. Using an Alternative Contracting Method will result in a competitive proposal environment that addresses the complexity of the Project consistent with public contracting rules.