S-10700-00000869ExemptionOrder-2.pdf

EXEMPTTON NO. 5-10700-00000869

Before the Director of the Department of Administrative Services of the State of Oregon

Exemption Request of the Department of Administrative Services Procurement Services on behalf of the Department of State Police for Class Exemption for the related Design-Build Contracts for the Central Point Office Renovation/Construction Project(s) in Central Point, Oregon; Construct New Springfield Area Forensics Laboratory/Medical Examiner Office; and Construct New Springfield Area Command/Patrol Offi ce

EXEMPTION ORDER:

FINDINGS OF FACT,

CONCLUSIONS OF LAW, AND

NOTICE OF OPPORTTINITY

FOR ruDICIAL REVIEW

EXEMPTION ORDER

Findings of Fact:

DAS PS on behalf of the Department of State Police ("OSP") ("Agency") submitted to the State Chief Procurement Officer of the Department of Administrative Services ("DAS"), as the delegate of the Director of DAS, a Request for Exemption from the competitive bidding requirements of ORS 279C300, ORS 279C.375(l), and related Oregon Administrative Rules ("OARs") ("Exemption Request") in order to use a Design-Build alternative procurement method for the Agency's the related Design-Build contracts for the Central Point Office Renovation/Construction Project(s) in Central Point, Oregon; to Construct a new Springfield Area Forensics Laboratory/Medical Examiner Office; and to Construct a new Springfield Area Command/Patrol Office ("Projects"). A copy of the Exemption Request, which includes draft Findings of Fact, is attached and incorporated by reference herein.

ORS 279C.335(5) requires that apublic hearing be held to allow an opportunity for all interested parties to comment on the Agency's draft Findings of Fact before they are adopted. On October 4,2021, the DAS PS on behalf of the Department of State Police published in the Daily Journal of Commerce, a notice on this matter. The notice provided that in response to a written request, a public hearing would be held October 22,2021, at 10:00 a.m., by teleconference, in accordance with ORS 279C.335(5)(c), allowing the opportunity for all interested parties to comment on the draft before these findings are finally adopted. No request for a hearing was received. No written or oral comment on the draft Findings of Fact and the Agency's Exemption Request from the competitive bidding requirements was received.

The draft Findings of Fact submiued in support of the Exemption are hereby approved.

Exemption NO. S-10700-00000869 OSP - Central Poinfi Springfield

Conclusions of Law:

ORS 279C.335(1) requires that all public improvement contracts be based on competitive bidding, unless excepted or exempted. ORS 279C.335(2) permits the Director of DAS or the delegate of the Director of DAS under ORS 2794.075, as the public contract review authority for the State of Oregon ("State"), to grant exemptions from the requirement for competitive bidding pursuant to ORS 279C.335(2), upon the approval of the following findings, submitted by the public contracting agency seeking the exemption:

(a) The exemption is unlikely to encourage favoritism in awarding public improvement contracts or substantially diminish competition for public improvement contracts; and

(b) 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 a finding under this paragraph, the Director of DAS shall consider the type, cost and amount of the contract and, to the extent applicable to the particular public improvement contract or class of public improvement contracts, the following:

(A) How many persons are available to bid;

(B) The construction budget and the projected operating costs for the completed public improvement;

(C) Public benefits that may result from granting the exemption;

(D) Whether value engineering techniques may decrease the cost of the public improvement;

(E) The cost and availability of specialized expertise that is necessary for the public improvement;

(F) AnV likely increases in public safety;

(G) Whether granting the exemption may reduce risks to the contracting agency, the state agency or the public that are related to the public improvement;

(H) Whether granting the exemption will affect the sources of funding for the public improvement;

(I) 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;

(J) Whether granting the exemption will better enable the contracting agency to address the size and technical complexity of the public improvement;

(K) Whether the public improvement involves new construction or renovates or remodels an existing structure;

(L) Whether the public improvement will be occupied or unoccupied during construction;

(M) Whether the public improvement will require a single phase of construction work or multiple phases of construction work to address specific project conditions; and

Exemption NO. S-10700-00000869 OSP - Central Point; Springfield

Q.Q 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 altemative 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.

In OAR 125-246-0170(3),the Director of DAS delegated authority to the State Chief Procurement Officer to conduct hearings, approve Agency findings, approve exemption requests and issue exemption orders under ORS 279C.335.

After full consideration of the draft Findings of Fact accompanying the Exemption Request and the application of the above law to these Findings, it is hereby concluded:

1. The exemption is unlikely to encourage favoritism in awarding public improvement contracts or substantially diminish competition for public improvement contracts; and

2. Awarding a public improvement contract under the exemption will likely result in substantial cost savings and other substantial benefits to the Agency.

Grant of Exemption:

Based upon Findings of Fact, Conclusions of Law and good cause appearing therefore:

Exemption No. 5-10700-00000869 is hereby granted to the Agency from the competitive bidding requirements of ORS 279C.300, ORS 279C.335(1), and OARs to allow the Agency to use the Design-Build contracting method.

This Exemption Order shall remain in effect from the date of issuance through the end of each of these Projects. The State Chief Procurement Officer or delegate may revoke this Exemption Order at any time.

This Exemption Order is subject to the following conditions:

1. To the extent feasible and consistent with this Exemption, the Agency shall follow the provisions of ORS Chapters 279A,279C, and29t, and applicable rules thereunder.

The Agency shall adhere to the Design-Build contracting requirements contained in OAR 125-249-0600 through 125-249-0670 and in the DOJ Model Rules for Design- Build procurements in OAR137-049;

2. The Agency shall consult with the Department of Justice ("DOJ") to establish objective standards for evaluating proposals and making a contract award in accordance with applicable legal requirements. The Agency shall work with DOJ to develop suitable contract language, relying on language developed from other State Design-Build contracts, and shall refer in the contract to Exemption Order No. S- 10700-00000869 and such additional or substitute terms that DAS or DOJ determine to be necessary for the protection ofthe State;

Exemption NO. S-10700-00000869 OSP - Central Poinq Springfield a The Agency shall provide to the State Chief Procurement Officer or delegate a Notice of Completion upon completion of the Design-Build contract, an Evaluation as required by ORS 279C.355,which shall also contain information on the money expended and compliance with the conditions of this Exemption Order No. 5-10700- 00000869, and such other reports as required by applicable ruIes. The Agency shall provide to the State Chief Procurement Officer or delegate fullaccess to the records of these Projects at any time, and the access may be used to determine if the terms of this Order have been followed; and

The procurement process shall be in accordance with every representation of the Agency contained in this Exemption Request, incorporated by reference herein.

4.

/ 0/-"6 ,/ Jo 2/ rT

Date for Debbie Dennis, State Chief Procurement Officer, Department of Administrative Services

NOTICE OF OPPORTUNITY FOR JUDICIAL REVIEW

Judicial review of this Exemption Order may be obtained by filing a petition for review with the Circuit Court of the State of Oregon for Marion County within 60 days from the date of this Exemption Order. Judicial review is pursuant to the provisions of ORS 183.484.

R. Jackson, Procurement Policy Offrcer

Exemption NO. 5-10700-00000869 OSP * Central Point; Springfietd

FINDINGS OF FACT SUPPORTING AN EXEMPTION FROM COMPETITIVE

BIDDING REQUIREMBNTS AND T}IE USE OF THE DESIGN BUILD CONTRACTING

METHOD

EXEMPTION NO. S-10700-00000869

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

Exemption Request of the Department of Administrative Services Procurement Services for the Central Point Office Renovation/Construction Project(s) in Central Point, Oregon;

Construct New Springfield Area Foren sics LaboratoryAvledical Examiner Office And Construct New Springfield Area Command/Patrol Office

Findings of Fact

ORS 279C.300 and 279C.335(l) 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. ORS 279C.335(2) permits the Director of the Departrnent of Administuative Services ("DAS"), as the primary public contract review authority for the State of Oregon ("State"), to grant, under certain conditions, exemptions from the requirement for competitive bidding upon the approval of specified findings. Under OAR 125-246-0fiAQ)(a)(C) the Director has delegated that exemption authority to the State Chief Procurement Officer of the DAS Procurement Services Section (*DAS PS").

DAS PS on behalf of the Department of State Police ("OSP") (who will be in charge of the projects for which an exemption from the competitive bidding requirements is sought and who anticipates that sufficient funding for the Projects will be allocated from the Oregon Legislative Assembly (SB 5505 & 5506,2021 session) may employ an alternative contracting method, provided that the State Chief Procurement Officer issues an order stating conditions and approving findings that are in compliance with ORS 279C.330, ORS 279C.335(2)(a) and OAR 125-249-0630. ORS 279C.330(2) defines "frndings" as used in ORS 279C.335 and ORS 279C.335(2), identifies required findings, factors to be considered and specific information to be provided as part of the agency justification forthe exemption. OAR 125-249-0630 and OAR 137-.049- 0630 also address the required findings.

ORS 279C.335(2) provides that the Director of DAS may exempt a public improvement contract or a class of public improvement contracts from the competitive bidding requirement of ORS 279C.335(l) after the Director approves the findings set forth in ORS 279C.335(2). ORS 279C.335(3) provides that:

"In making findings to support an exemption for a class of public improvement contracts, the contracting agency or state agency shall clearly identi$, the class using the class's defining characteristics. The characteristics must include a combination of project descriptions or locations, time periods, contract values, methods of procurement or other factors that distinguish the limited and related class of public improvement contracts from the agency's overall construction program. The agency may not identi$ a class solely by funding source, such as a particular bond fund, or by the method of procurement, but shall identifii the class using characteristics that reasonably relate to the exemption criteria set forth in subsection

(2) of this section."

Page L of 16

DAS currently anticipates that proposals for the Projects will be solicited pursuant to a single RFP and that the 3 Projects will be awarded to a single contractor. However, DAS may elect to change the solicitation structure or the contract structure if DAS deems it to be in the best interests of OSP or the State. The language in ORS 279C.335(3) and OAR 137-049-0630 is not entirely clear as to whether the Projects constitute a class for which a class exemption is required, or instead whether a separate exemption must be requested for each Project. DAS believes that the latter approach would be in accordance with the applicable statute and rule. However, given the lack of absolute clarity in the statute and rule, and because the solicitation process, the number of contracts and the number of contractors are subject to change, DAS is including the findings necessary to support a class exemption, as well as the findings necessary to support a separate exemption for each ofthe three Projects.

If the Projects are viewed as a class, DAS believes that the Projects share certain defining characteristics for purposes of ORS279C.335(3). The OSP facilities that comprise the Projects must be designed to accommodate the critical functions of Area Command, Forensic Services Laboratory and Medical Examiner operations; must accommodate effective handling and storage of evidence, auto servicing, vehicle storage (including temporary vehicle evidence storage), water tank firearms testing; must provide for adequate freezers and refrigeration to meet operational needs; must address employee safety and security, public safety concerns, resiliency and disaster preparedness; and must maximize agency productivity, employee satisfaction and public perception.

Under ORS 279C.335(5), the contracting agency is required to publish a notification of a proposed exemption under ORS 279C.335(2) a minimum of 14 days before the date on which the contracting agency or State agency intends to take action to approve or disapprove the exemption. On October 4,2027,DA5 PS published such a notification. As required by ORS 279C.335(5)(c), the notification stated that in response to a written request, the contracting agency or State agency will hold a public hearing before these findings are finally adopted, allowing the opportunity for all interested parties to comment on the draft findings.

No request for a public hearing was received within the 14-day period following publication of the notice.

I BACKGROT]l\D

Description of Projects: A) Central Point Office Building Renovation/Construction Project in Jackson County, located at 4500 Rogue Valley Hwy, Central Point, OR 97502, B) Construction of a new Springfield Area Forensics Laboratory and Medical Examiner Office, and C) Construction of a new Springfield Area Command/Patrol Offrce are each referred to herein as a "Project" and collectively as the "Projects". The exact locations of the Forensics Laboratory/Nledical Examiner Office and the Area Command Patrol Office are presently undetermined. The Oregon State Police Department ("OSP") is undergoing a separate site selection/feasibility/purchase process.

Projed

Id202l-

Dec2021

Jan 2022-

Jun 2012

Jul 2022-

Dec,2022

Ian 2023-

Jun 2023

Jul 2023

Dec2023

Jan 2024-

Jun 2024

Jul 2024-

Dec.2024

Central Point Offl ce Renrodel Conhacts Design Construction Move-in NIA NIA

Springfield Forensic Lab & tr,IE 0ffice

Site Selecion&

Feasibiity Study Contracts Design Construction Movuin

Springf,eld Patrol Area Conmand

Site Selection&

Feasibiity Studv Contracts Desigr Construction Move-in

Estimated Proj ect timeline:

1. Phase 1. Project A Central Point Office Renovation:

OSP proposes to issue a solicitation for a design-build contract for building renovation, improvement, and construction ofthe approx.46,200 square footbuilding located inthe City of Central Point, Jackson County, Oregon. The completed Project will address the following: Built 23 years ago in 1997,the building has served as the Central Point Command Center and Lab for OSP. Previously leased from the Department of Administrative Services (*DAS"), the property ownership was transferred to OSP in 2017. The facility consists of a primary structure centered on the property with public access from the west parking lot and secure access from the south and east. The building, which usedto bethe SouthwestRegional Headquarters, includes Patrol, Detectives, Fish & Wildlife, and Forensic Services Lab. OSP leases a portion of this building to the Oregon Department of Transportation ("ODOT'). In the secure parking lo! the facility also includes a service building. The service building provides space for evidence storage, medical exams, auto servicing, vehicle storage, and freezers. The site is large enough for a potential expansion of the main building to the east. Operations within the facility have shifted around over the years, but the infrastructure of the facility itself remains in its original condition and has not been improved in 23 years.

The Central Point facility Project would renovate the existing buildings and add additional square footage in phases. Cost savings are achieved by utilizing as much existing infrastructure as possible. This plan also meets the OSP prototype size recommendations for the facility. In the Project plan, much of the existing structure and electrical system can be utilized, but new HVAC and LED lighting would need to be added.

A significant increase of square footage is needed beyond the current building and it is possible to fit this additional square footage on the existing site. Construction would be carried out in phases in order to minimize disruption to existing facility operations. The site is located within a base flood zone which is considered a Special Flood HazardArea. Any future development in this zone is subject to limitations and requirements for "Critical Facilities". All building functions, except for a small portion of warehouse functions can be sited outside of the Flood HazardArea. Some sitework will be needed in order for the new design to be functional, including the relocation of public parking and the addition of a service drive. The Project would include renovating the main facility & support building, adding support warehouses, adding the Forensics Laboratory, adding a new lobby, dispatch area renovations, and associated sitework.

a) The below information is the current basic building specifications for Central Point.

Centnal Poirrt Facility Size Data

Area Corrrrnand & Dispatchl \A/arehouse Forensic Serwices Lahr l\lledical Exarniner Total Eluilding Deweloped Site Trrtal Site

-t 6,.486 sf 8,422 sf 9"6-4-9 sf

-1 '1 ,626 sf* 46,-t 83 sf 58,257 sf, -I 51, 441 sf (3-5 Acres)

PHASE 1: Remodel & add su!}port warehouses; add Forensic Lab, new llotlby, asscialed sitework

PHA'E 2:

:5r&'::]1gfE":HHen<'l and Dispatch:

b) The estimated square footage of the renovated portion of the Central Point facilify and the portion to be added is set forth below.

Rerrrodel Area Corrrrnand (-l 2..498 sf) Warehouse (5l sf)

D,spatch (3,2Oa sf) Medical Exarniner (4,24A st\

Sitework (31 ,6O2 sf)

Area Corrrrnand (7aO sf) Warehouse At2,27A sD Warehouse B (-l ,OOO sO

Forensic Services Lab (9,649 sf) Medical Exarniner t737e sf)

Sitework (26,655 sf) i /l::-lr..ir I I

['{evv

Page 4 of L5

2. Phase 2" Projects B and C (overview of the current state of buildings):

Currently, the co-located Springfield Area Command and Forensics Laboratory building was built in 1984.

OSP has been leasing the space for 35 years t}rough an inter-agency agreement with ODOT. It has served as the Southwest Regional Headquarters for about 8 years. The property consists of a 10,200 square foot primary building toward the eastern side of fhe site with public access from the south parking lot and secure access from the south, east, and north. The primary building includes Patrol, Detectives, Fish & Wildlife, and Forensic Services Laboratory functions. There is also a smaller service building located to the west of the primary building, which is accessed via the secure parking lot. The service building provides space for evidence storage, freezers and refrigerators, auto servicing, temporary vehicle evidence storage, and water tank firearms testing. The facility spaces have been adapted and modified according to operational needs over the years, but the infrastructure of the facility itself remains in its original condition and is inadequate to enable OSP to meet its public safety mission.

OSP's preferred approach would be to locate and purchase a large enough site to co-locate both Projects B and C. However, if a large enough site cannot be purchased, then Projects B and C will be constructed at separate locations.

a) Prqiect B):

Springfreld Area Forensics Laboratory and Medical Examiner Office - 68,640 (approx.) square foot new construction. Construction will be completed in June 2A24 and any finalmove*in items will be addressed beginning inJuly 2024.

Springfield Faciiity Size Data Forensic Services Lab -r Medical Exarniner Site Forensic Services Lab Medical Exarniner Total Building

Developed Site Total Site

4B,O-16 sf 2O,625 sf* 68,641 sf

76,83O sf 2-17,80ru- sf {5 acres}

D Project C):

Springfield Area Command/Patrol Office - 17,200 (approx.) square foot new construction.

Construction will be completed in June 2024 and any final move-in items will be addressed beginning inJuly 2024.

Spn'ingfi'eld Facility Size Data Area Cor-nrnand Site Area Cornrnand \A/arehouse Total Building

Developed Site Total Site

-l O,776 sf 6,4OO sf

17,176 st

3O.9BO sf 87,12O sf (2 acres)

The design of the Projects is required to comply with the OSP standards relevant to building performance for construction and technical specifications requirements. The Projects must also comply with other applicable federal, State, and local codes and regulations. Under these requirements, OSP must employ cost saving, space saving, energy saving, and other sustainable design and construction features to public improvements. Therefore, OSP is shiving to continually improve its acquisition and project delivery approaches. One of those improvements is the design-build project delivery method discussed in more detail below.

OSP proposes to use the Design-Build ("DB") construction contracting project delivery process for the Projects, where the design services, construction work and related services/work (as more particularly described below) will be provided by a DB contractor, as an alternative to the low-bid design-bid-build ("DBB") process. In accordance with the applicable statutes and administrative rules, DAS PS, on behalf of OSP, will use a selection process utilizing either a single-phase or a dual phase Request for Proposals ("RFP"; competitive procurement selection process, where price, qualifications and other non-price evaluation factors will be evaluated.

The planned services and work under the resulting DB contract will consist of inspection and evaluation services, design services, construction services/work, programming value engineering ("VE") services, permitting, internal systems commissioning services and all other support services needed to complete the Projects (collectively, the "Work"). OSP will employ all reasonable cost saving and energy saving methods in executing the Projects. OSP will also strive to incorporate the objectives of Senate Concurrent Resolution 17 ("SCR 17") from the2A2l Legislative Session.

OSP requests the use of the DB project delivery method for the Projects. ORS 279C.335(2) and 279C.3500) require certain findings as a part of exempting public improvement contracts or classes of public improvement contracts from competitive bidding. ORS 279C.330(2) provides that "findings," as used in ORS 279C.335, "means the justification for a conclusion that a contracting agency or State agenay, in seeking an exemption from the competitive bidding requirement of ORS 279C.335(1), reaches based on the considerations set forth in ORS 279C.335(2)." ORS 279C.350(1) provides that, with respect to an exemption request regarding a specific public improvement contract, the Director of DAS shall issue an order that sets forth findings, as described in ORS 279C.330(l), supporting the decision to grant or deny the request for the exemption.

Accordingly, DAS PS, on behalf of OSP, submits the following frndings to support the decision to use a competitive DB procurement and contracting process for the Projects, as an alternative to the low-bid DBB method.

II

Page 6 of L6

FINDINGS REGARDING REQUIRED INFORMATION

ORS 279C.330(1) provides as follows: "As used in ORS 279C.345 and279C.350, "findings" means the justification for a contracting agency conclusion that includes, but is not limited to, information regarding:

(1) Operational, budget and financipl data;

(2) Public benefits;

(3) Value engineering;

(4) Specialized expertise required;

(5) Public safety;

(6) Market conditions;

(7) Technical complexity; and

(8) Funding sources.

DAS PS linds that many of these criteria support the decision to use the DB contracting method for the Projects. This finding is supported by the following facts:

1. Onerational. Budqet and f inancial Data: DAS PS recognizes that there may be unforeseen or unknown conditions on the Projects, due to the variables involved with existing infrastructure systems and emerging client programming. It will be incumbent on the DB contractor, the DB contractor's trade partner teams, and the DB contractor's mechanical and electrical consultants to determine the best way to plan and execute the Projects and to minimize any adverse impact to the building and its occupants. Because the Central Point facility will be occupied by OSP employees throughout the duration of Project A, OSP cannot have an unplanned lapse in building services or utility operations during the execution of the Project, and a traditional low-bid contractor would be less likely to be able to effectively fulfill this need.

OSP anticipates a lower overall cost and beffer value using the DB contracting method, as described more fully in this Section II and in Section [V below.

The DB process will assist in developing a scope of work and construction documents that meet the requirements of the Projects with significantly lower risk of cost oveffuns, particularly with the use of a guaranteed maximum price ("GMP") contract pricing method, where most of the risk of the unknowns will be absorbed by the DB contractor. The resulting DB contract will establish, within the GMP, the allowable fees, allowances and costs of the Work. The DB contract will also ensure that any savings within the GMP at the conclusion of the Project(s) will remain with the State. OSP anticipates substantial cost savings and other substantial benefits fiom using the DB method of contracting for the Projects, as more particularly described in Section IV of these Findings.

The total design and construction cost of each Project is estimated at (a) $25.9 million for the Central Point project; (b) $52.6 million for the Springfield area Forensics Laboratory and Medical Examiner Office; and

(c) $11.6 million forthe Springfield Area Command/Patrol office. The Projects are supported by State funding.

2. Public Benefi{s: In order to provide the continuity of critical goverflment functions at the Central Point Office, OSP's vision is to perform the actual construction work over the shortest time span feasible, while still retaining functionality for the tenant public safety program areas to serve the public, and that the public as well as State employees should benefit from having an adequate and modernized facility that meets the needs of OSP as a whole.

3. Value Ensineerins: VE is encouraged by OSP on all OSP projects. VE can be defined as an organized effort directedatanalyzing designed building features, systems, equipment, and material selections for the purpose of achieVing essential functions at the lowest life-cycle cost, consistent with required performance, quality, reliability, and safety. The DB method of contracting typically results in earlier, more reliable, and higher quality VE proposals produced for the projects. Additionally, since a sizable amount of project design and planning will be accomplished with the involvement of the DB contractor during the design development phase, OSP can expect to rcalize greater accuracy and refinement in the initial scope of Work, which typically results in fewer change orders, thereby reducing cost and saving time.

The unique relationship of the Owner, the dwner's Project Manager, the DB contractor and the rest of the DB contractor's team under the DB process for project delivery fosters a collaborative team approach, which should result in significant VE benefits. The standard low-bid procurement method obtains pricing only after the design has been fully completed and does not allow for pertinent input from the contractor.

When using the DB procurement methodology, design plans and specifications that identi8z alternative materials that add value may be more aptly developed during the design phase by virtue of the contractor's input and collaboration with the design team. Alternative materials would be included in the pricing BEFORE the DB contract is awarded, reducing the number of change orders and lesser value deductions during construction of the Projects. In addition, the benefit of VE combined with a DB GMP pricing method would likely result in savings accruing to the State.

4. Specialized Expertise: Each of the Projects pertain to a building with particular design and consfouction issues. For successful Project completion, expertise and innovation are required in: (a) managing and coordinating both design and construction in a "fast track" mode; (b) implementing performance specifications; (c) providing VE and constructability reviews; (d) scheduling and estimating;

(e) assessing risk; and (f) providing a completed Project through a single point of responsibility.

DAS PS and OSP have the necessary and experienced staffto make the DB process successful. Shirley A.

Smith will flrnction as the contracting resource during the term of the Projects, is professionally certified nationally by the Design-Build Institute of America ("DBL\";, and has considerable expertise in alternate forms of contracting, including the use of the Design-Build delivery method for the past twenty (20) years.

She has used the Design-Build contracting method for construction of a number of projects. The completed projects were accomplished within or under budget and on or ahead of schedule, and maximized the value of every dollar invested. Kailean Kneeland, Business Services Director, Sharon Domaschofsky, Business Services Manager, and Major Joel Lujan, Gaming Enforcement & Business Services Bureau Director, will also be assigned to work on the Projects. OSP will also be contracting for separate experiencbd Design- Build project management services to ensure proper oversight of the Projects.

Kailean Kneeland is the Business Services Director for the Department of State Police. Prior to Kailean being in this position he served as the Administrative Services Director and Chief Financial Officer for the agency. He has been with the agency since 2003 and has a complete understanding of the various public safety program needs that will be served at the Central Point office. Kailean has also overseen the successful completion of the agency's Pendleton Forensics Laboratory, Baker City worksite, and Hines worksite projects inthe 2017-19 biennium. During the 2019-21biennium, he has led the agency's long-term strategic master facility planning effort. A central part of that work has been to create facility standards across the agency with purpose-built facility projects to achieve the greatest benefits and cost savings for the State.

Sharon Domaschofsky, Business Services Manager, and Major Joel Lujan, Gaming Enforcement & Business Services Bureau Director, will work in tandem with Kailean Kneeland to provide agency executive decision-making on the Projects.

5. Public Safety: The DB contractor will be able to provide safe work zones during construction of the Projects, providing safe access for DB contractor workers, any other contractor or consultant personnel, Owner personnel and the general public as needed, while performing the Work in and around the Project sites. In addition, it will be important for the DB contractor to protect the public from any incidents at the building entrances, as well as around the building perimeter. Mitigation of public risk concerns requires

Page 8 of 1-6 the consideration of each proposer's approach, skills and experience using proven systems as criteria when selecting a qualified contractor through a DB competitive procurement process, rather than the traditional and much more limited low-bid award process. The DB procurement method would result in the selection of a well-qualified DB contractor capable of safely and seamlessly performing the Work.

6. Markqt Conditions: The general "toro*y and construction market is experiencing spikes in commercial construction which appear to be trending in 2021 and beyond. OSP believes that the cument market is favorable for attracting the most desirable and experienced firms in the region. The bidder pools for most low-bid construction contract awards presently include a number of contractors that are not familiar with the specialized Work that is required for these Projects. The traditional DBB method would likely result in a contract award to a low-bid contractor who is not able to perform, or is at a higher risk level for performance, safety, or financial issues on a complex project. This is especially true due to the highly specialized construction design planning required for needs of the Forensics Laboratory, the Medical Examiner Office (including autopsies), and the OSP Dispatch Center. Due to these market conditions and risks, the DB procurement process is necessary to allow DAS PS and OSP to consider the qualifications of interested contractors and their ability to successfully deliver these challenging Projects.

7. Technical Comnlexity: The Projects would benefit from a DB contractor with in-depth background knowledge of the technical issues that contribute to the complexity of the Projects. A DB contractor with specialized skills and expertise will be required to identiff and price multiple possible solutions for current and hidden conditions, while maintaining unintemrpted electrical and mechanical functionality and safely managing traffic and pedestrian flows throughout execution ofthe Projects. A high level of communication, coordination and trust among OSP, the DB contractor and the other members of the DB contractor's team is required, which would be facilitated by utilizing the DB approach for the Projects.

8. Fundins Sources: OSP funds for the Projects, are outlined in the background information. The total design and construction cost of each Project is estimated at (a) $25.9 million for the Central Point project;

(b) $52.6 million for the Springfreld area Forensics Laboratory andMedical Examiner Office; and (c) $1 1.6 million for the Springfield Area Command,/Patrol office. DAS PS anticipates cost savings on the Projects by using the DB method of contracting, as described in Section fV below.

The Projects will be paid for with State funding allocated for the Projects in SB 5505 (2021) and SB 5506 (2021). The DB method would enable OSP to select a DB contractor that can provide cash flow projections to assist OSP with forecasting the timing of funding needs and possible development of Work phases for the Projects.

III

F'II\DING S RE GARDING COMPETITION

ORS 279C.335(2) requires that an agency make certain findings as a part of exempting public improvement contracts or classes of public improvement contoacts from competitive bidding. 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 competitionfor public improvement contracts."

OSP finds that selecting the contractor through an exempted selection process for the DB alternative contracting methodo as described in this documento is unlikely to encourage favoritism in awarding public improvement contracts or substantially diminish competition for public improvement contracts. This finding is supported by the following:

1. Solicitation Process: DAS PS and OSP propose to use the DB procurement process with evaluation of contractor qualifications, as a proposed alternative to the competitive bid process for the 3 Projects. In accordance with applicable public contracting statutes and administrative rules, DAS PS and OSP will use a selection process utilizing a one-step RFP competitive procurement selection process. DAS PS and OSP will conduct the procurement for DB Work in accordance with the applicable Oregon Department of Justice ("DOJ") Model Rules. The solicitation and contract forms to be used are DAS's own documents that were developed in coordination with the DOJ. The final solicitation and sample contract documents will be reviewed and authorized for release by DO{ prior to advertisement, and the resulting DB contract will be reviewed and approved for legal sufficiency by DOJ prior to execution.

2. Solicitation Advertisement:

Pursuant to ORS 279C.360, the DB solicitation will be advertised in the Daily Journal of Commerce. In addition, solicitation documents will be available through the OregonBuys eProcurement System.

Solicitation documents will not be available in hard copy form.

3. Full Disclosure and Competitive Processl To ensure full disclosure otatt req"irernents for the Projects, DAS PS and OSP will use either a one-step (RFP only) or two-step (RFQ/RFP) procurement process, pursuant to ORS 279C335, other applicable provisions of ORS 279C.300 through 279C.875 and the applicable DAS administrative rules and DOJ Model Rules for procurements of DB Work. The RFP processes will include the following elements:

A) A detailed description of the Projects.

B) A selection process description.

D) Evaluation criteria and the weight DAS PS will give for each criterion.

E) Applicable protest processes and remedies;

F) A description of how DAS PS will use interviews in the process and how DAS PS will evaluate interview information received;

G) A description of how DAS PS will combine scores from RFP proposals, interviews and any other evaluation criteria;

H) A statement that any savings the DB contractor realizes in performing the DB contract will accrue to OSP;

D A specification of terms and conditions that will govern how the GMP will be determined, whether the GMP will include or be based on unit pricing and whether the Work for any of the Projects will be constructed in phases;

J) A statement that OSP will not pay any amount that exceeds the GMP, unless the amount results from material changes to the contract scope of Work and the parties agree in writing to the material changes;

K) A statement that DAS PS will conduct the RIP in accordance with the applicable DAS administrative rules and DOJ Model Rules for DB Work; and

L) A specification of the deadlines and time periods for the RFP process that will allow interested DB contractors a reasonable opportunity to submit proposals and otherwise meet RFP requirements.

4. Selection Process: The selection process will include the following elements:

A) A vendor pre-proposal conference, open to all interested parties, giving the opportunity for potential proposers to ask questions, request clarifications, and suggest changes to the solicitation documents.

B) An evaluation process that includes the following steps:

i) DAS PS will evaluate proposals for completeness and compliance with the requirements listed in the procurement document.

ii) Proposals considered complete and responsive will be evaluated under the criteria of the procurement document.

iii) The members of the evaluation committee will meet and share information about each evaluation committee member's observations about the Projects and the proposals, and the evaluation committee members will independently score proposals according to the criteria set forth in the RFP, irr) Two or more of the highest scoring proposers may be selected as finalists. The evaluation committee may conduct interviews of the finalists, if necessary, using the interviews to confirm the scoring of the prqlosals and to clari$z any questions, creating a revised score for the finalists. DAS PS may also choose not to conduct interviews and move directly to the contract award process with the highest scoring proposer. Similarly, if only one proposer submits a proposal, DAS PS may move directly to the contract awird process.

v) The evaluation committee will raxk the finalists according to the proposal and interview criteria set forth in the RFP and provide an award recommendation.

vi) DAS PS will attempt to negotiate a contract with the top-ranked proposer. If negotiations are not successful, at DAS's discretion, negotiations will be conducted with the next highest-ranked proposer and so on, until DAS PS has successfully negotiated a contract or determined that further contract negotiations would not be in the best interest of the State and that the RFP process should be terminated.

vii) Competing proposers will be notified of the final selection of the highest-ranked proposer to receive an award under the RFP process, by posting of the Notice of Intent to Award on the OregonBuys system.

5. Growing Pool of Contractors: With the increase in the use of alternative contracting, there is a growing pool of contractors qualified to lead the DB ef[ort. The seleotion process will be open and available to all qualified contractors.

6. Good Competition: An open and competitive solicitation process will provide an opportunity for qualified contractors with experience in the DB method for project delivery and with key qualifications associated with the unique subject matter involved in the Projects to submit proposals. It is anticipated that competition will be similar to that experienced in other projects of this type and size. The final selection will be made on the basis of price and non-price factors, and thereby expands the grounds of competition used in traditional low-bid procurements beyond price alone, to include qualifications, innovation, and best practices factors.

w

F'INDINGS REGARDING SUBSTANTIAL COST SAVINGS AND OTHER SIIBSTANTIAL

BENEFITS TO TIIE PUBLIC CONTRACTING AGENCY

ORS 279C.335(2) requires that a public agency make certain findings as part of exempting public improvement contracts or classes of public improvement contracts from competitive bidding. ORS 279C.335(2)(b) requires, in pertinent part, that an agency find that: "Awarding a public improvement corutract under the exemption will likely result in substantial cost savings and other substantial benefits to the contracting agency or the state agency that seeks the exemption..."

ORS 279C.335(2Xb) fuither provides, in pertinent part, as follows:

"In approving a finding under this paragraph, the Director of the Department of Administrative Services...shall consider the type, cost and amount of the contmct and, to the extent applicable to the particular public improvement contract or class of public improvement contracts, the following:

A) How many porsons are available to bid' B) The construction budget and the prJjected operating costs for the completed public improvement;

C) Public benefits that may result from granting the exemption;

D) Whether value engineering techniques may decrease the cost of the public improvement;

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The cost and availability of specialized expertise that is necessary for the public improvement:

Any likely increases in public safety;

Whether granting the exemption may reduce risks to the contracting agency, the state agency or the public that aqe related to the public improvement;

Whether granting the exemption will affect the sources of funding for the public improvement;

D 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;

J) Whether granting the exemption will better enable the contracting agency to address the size and technical complexity of the public improvement;

K) Whether the public improvement involves new construction or renovates or remodels an existing structure;

L) Whether the public improvement will be occupied or unoccupied during construction;

M) Whether the public improvement will require a single phase of construction work or multiple phases of constouction work to address specific project conditions; and N) 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."

The above findings are firther discussed in Section W.6 below.

DAS finds that selecting the contractor through an exempted DB selectior process will likely result in substantial cost savings and other substantial benefits to the contracting agency. This frnding is supported by the following:

1. Fewer Changes at Less Cost: Under the DB contract contemplated by these findings, the only changes that will affect the cost of the building improvements to the Owner will be changes to the scope of work that are made by the Owner. Careful project planning that includes a clearly defined scope of work will be critical to the success of the Projects by limiting the number of contract change orders. The GMP for the DB contract contemplated for the Projects will provide assurances that risks associated with costs within the scope of work are borne by the DB contractor. The use of DB method typically results in fewer change orders because ofthe contractor's input during the design phase.

2. Better Informed Decisions: The unique projectteam relationship between the design and construction entities and the Project Manager to be retained by OSP in the ptanned DB contract will provide early input on design decisions that allow for value engineering which may provide significant cost reductions without affecting the overall schedule. In addition, better informed and timely decisions within the design and construction team will facilitate schedule reductions, which will likely result in substantial cost savings to the State. Cost savings to the State due to the reduction in overall schedule, when combined with value engineering construction components, could reach l0%o when compared to the original construction estimate based on the conventional DBB project approach. This estimate is based on past experience within the construction industry when the DB method has been employed.

3. Matchinq Budset and Scope: Utilizing a DB conkactor and developing an early GMP will result in a more refined budget analysis, which will ensure that budgets are more closely aligned with the scope of the Projects. The DB contractor will be able to reconcile the cost estimates for the Projects provided by the flrst tier subcontractors, including the DB contractor's assigned architects and engineers, to establish a GMP

E)

F) G)

H)

Page 12 of 3.6 for the Projects. This process will ofler OSP an opportunity to maximize the budget value of the Projects by ensuring that the scope closely matches budget estimates and by utilizing a GMP to reduce the risk of cost ovemrns. Additionally, a more concise cost estimate at the beginning of construction will save costs for the Projects by reducing change orders. The DB contract will allow OSP to include alternate work packages, therefore the scope of the Projeqts can be managed to budget requirements, if a Project budget changes.

4. Size and Technical Complexity: The DB project delivery method will provide DAS PS with the opporlunity to identifu, evaluate and rank DB teams proficient with performing comparable projects in size and technical complexity, which would not be available in the traditional DBB process. These Projects will require the expertise ofteams intimately familiarwith complex systems and operations ofthis size and scale in order to reduce risks to the State.

5. Value Ensineerinq: The DB project delivery method will provide the opportumty for VE that would not be available in the traditional DBB process. Past projects administered by OSP using the DB method have resulted in significant savings. Substantial cost savings are expected to accrue to the State by the use of the DB contracting method for these Projects by utilizing various VE components, e.g. construction materials and methods, site layout and overall finish elements. The early involvement of the DB contractor will assist with establishing design methods that will facilitate construction in the field, and establish construction means and methods early in the design process. Under the traditional DBB approach, the means and methods are established only after a project has been completely designed, creating the potential for significant cost impact. The DB method provides the opportunity for a compressed design and construction schedule, with lower change order rates and schedule extensions.

6. Additional considerations under…