EXEMPTION FROM COMPETITIVE BIDDING ANNOUNCEMENT
(Must be advertised in trade publication at least 14 days before hearing)
July 29, 2022
NOTICE OF PUBLIC HEARING – WOODBURN RURAL FIRE PROTECTION DISTRICT TO CONSIDER EXEMPTION FROM COMPETITIVE BIDDING PROCEDURES FOR SELECTION OF A CONSTRUCTION MANAGER GENERAL CONTRACTOR FOR STATION 21 FIRE STATION REMODEL PROJECT. In accordance with ORS 279C.335, the Board of Directors of Woodburn Rural Fire Protection District, acting as the Local Contract Review Board, will conduct a public hearing for the purpose of taking comments on the draft findings for an exemption from the competitive bidding requirement and adoption of an alternative contracting method. The proposed method of selection will be a negotiated CM/GC agreement. The public hearing will be conducted on August 17, 2022 at 7:00 p.m. at 1776 Newberg Hwy, Woodburn, OR 97071. A digital copy of the draft findings is available to the public on the fire district website at woodburnfire.com.
Findings on Exemption From Competitive Bidding
Staff Report for Local Contract Review Board
2022 Station 21 Fire Station Remodel Project
July 27, 2022
Woodburn Fire District (WFD) staff is preparing to initiate a public improvement contracting project involving Woodburn Fire District Station 21. The scope of work, collectively referred to as the Project, includes in majority part the following: remodeling of portions of the fire station; repaving of the east parking lot; construction of a workout area in the current shop building; stabilization of the CMU security wall and other renovations/improvements while the station remains occupied and in full-service.
Oregon Revised Statutes (“ORS”) Chapter 279C.335 requires that all public improvement contracts be based on competitive bids. However, the WFD Board of Directors, acting as the Local Contract Review Board (“LCRB”) may exempt a public improvement contract from the ORS 279C.335 requirement upon approval of findings that:
- The exemption is unlikely to encourage favoritism in awarding public improvement contracts or substantially diminish competition for public improvement contracts and;
- Awarding of a public improvement contract under the exemption will likely result in substantial cost savings and other benefits to WFD.
Staff is seeking approval by the LCRB to exempt the public improvement contract for the Project from the traditional competitive bidding requirements of ORS 279C.335 to utilize the Construction Manager/General Contractor (“CM/GC”) alternative contracting project delivery method. Staff will utilize a Request for Proposal (“RFP”) solicitation method to award a contract to one or more highly qualified, quality driven, contractor(s) with a demonstrated excellent record of past performance and integrity to provide the necessary professional services required for reviewing and analyzing final designs; suggesting changes and options that minimize potential errors, delays and other risks; and improving value and quality.
The contract will include phase-one design development services resulting in the collaborative development of a guaranteed maximum price (“GMP”) for the phase-two construction services. Staff will seek the Board of Directors approval to enter into the phase-two construction contracts based upon the established GMP for each project as they occur.
Prior to approval of the findings, the LCRB is required to hold a public hearing to accept comment on the findings. The public hearing is scheduled to occur during the public testimony portion of the August 17, 2022 Board meeting. The required notice was published in the Daily Journal of Commerce on July 29, 2022.
The purpose of this staff report is to establish the necessary ORS 279C.335 findings:
- Staff has determined that the CM/GC alternative contracting project delivery method exemption is unlikely encourage favoritism in the awarding of a public improvement contract or substantially diminish competition for public improvement contracts. To encourage maximum competition, any contractor will have an opportunity to provide a response to the RFP which will be advertised in the Daily Journal of Commerce, published with plan-center agencies and sent directly to contractors that have participated in WFD solicitation processes in the past or are known to provide the type of services sought. The utilization of the CM/GC method involves the use of a comprehensive qualifications based RFP solicitation process that will result in the award of a general contractor that is highly qualified, experienced and that demonstrates an excellent record of quality, past performance and integrity to provide the necessary construction management services as a partner with WFD and the district architect hereafter referred to as Deca Architects.
- Staff has determined that the CM/GC process will result in efficiencies utilizing contracting and sub-contracted trades which will result in cost savings to WFD. The selected contractor will provide the necessary construction management services as a partner with WFD and Deca Architects early in the process. This will allow work to get started earlier than in the traditional design-bid-build process. The Contractor will lend its expertise, knowledge and experience to provide feedback and feasibility regarding the project during the design and value engineering phase. During this phase of the services, the general contractor will endeavor to establish a GMP for the project. The GMP captures all costs for the construction phase including insurance, performance and payment bonds, and competitively bid self-performed and/or subcontractor selection for all of the work to be performed. This method will result in a more practical, constructible and economic solution while maintaining an emphasis on quality and design integrity. Contingencies that will be built-in to the GMP and will be returned to WFD in the event the scope does not change; avoiding costly change orders that can occur in more traditional bid-build projects.
- WFD Staff has seen the benefits of CM/GC with other Fire Districts. For example, TVF&R has successfully piloted the CM/GC method for Fire Station 56/South Operations Center and the seismic and remodel projects at Fire Stations 51, 52, 54, 64, 65 and 69. Woodburn Fire District has used CM/GC for seismic rehabilitation and remodel of Station 21. It plans to use this process for upcoming projects. This process will only contract with a CM/GC for design and construction services; subcontractor work for the phase 2 construction portion of the Project is based upon competitive bids issued by the CM/GC under the GMP.
FINDINGS OF FACT
- The number of firms available to bid: All interested and qualified contractors in the area will have an opportunity to provide a response to the RFP which will be advertised in the Daily Journal of Commerce, published with plan-center agencies and sent directly to contractors that have participated in WFD or similar solicitation processes in the past.
- The construction budget: The Woodburn Fire District general obligation bond will provide the budget for the Project. Due to the critical timing and nature of the Project to get the Project completed with minimal impact to ongoing operations, careful coordination and scheduling will be essential. Staff finds that the ability to carefully screen experienced contracting firms will significantly affect the project outcome as it relates to schedule and cost. The utilization of the CM/GC method has been shown, in its use by other agencies in Oregon, that it alleviates financial risk due to minimizing delay and requests for additional work and change orders. It is anticipated that staff will therefore find that reduced risks provide a significant value and potential overall cost savings.
- Public benefits that may result from granting the exemption: Providing the CM/GC exemption will allow a contractor to be hired early in the design development process than with a traditional design-bid-build process which will allow greater flexibility for WFD to complete the Project on time. This is particularly important considering the Station will be in full service while the Project is underway. Creating a Project Team at the start of the Project comprised of the Deca Architects, WFD and Contractor, through selection of the CM/GC, creates a more informed, and better quality decision making process and more efficient construction team reduces
- Local Market Conditions: The Portland-Salem Metro market continues to experience a significant amount of commercial, institutional and industrial construction, supply chain issues on materials, labor shortages and inflation. Staff therefore finds that to ensure a qualified general contractor is retained for this Project that the alternative contracting method is required due to these local market conditions.
- The cost and availability of specialized expertise required for the project: The challenge of performing this project while continuing emergency operations is significant. It is important to utilize a general contractor that has demonstrated expertise in managing, scheduling, and performing in these types of conditions in a satisfactory manner. Staff therefore finds that selecting a firm through the CM/GC method allows WFD to contract with a firm with the appropriate expertise. Through the comprehensive RFP and evaluation process WFD will have an opportunity to select a Contractor with the appropriate specialized qualifications that is highly qualified, experienced and that demonstrates an excellent record of quality, past performance and integrity to provide the necessary construction management services. The costs for such specialized expertise are included in the overall Project budget and within the accepted GMP.
- Whether granting the exemption may reduce risks to WFD related to the project and will likely increase public safety: The established need for the Project to provide better facilities will increase WFD’s ability to continue to provide a dedicated standard of coverage to the public.
- Whether granting the exemption will better enable WFD to control the impact that market conditions may have on the cost of and time necessary to complete the project: There is a considerable advantage having a qualified CM/GC hired early in the process to participate as an integrated team member in the project time period along with WFD, Deca Architects and other Project Team members. It also provides an opportunity for early orders of materials and equipment for long lead time items and to do early work packages if needed to maintain schedule or take advantage of other opportunities.
- Whether granting the exemption will better enable WFD to address the size and technical complexity of the project: Strong budgets and schedule control will be essential. The conventional design-bid-build approach would contain too much risk for WFD for the Project. The Project’s complexity, necessity for crucial satisfaction of completion deadlines, and the need for early and continuing assurance that the Project work remains within budget, are all critical requirements. The utilization of the CM/GC approach will lead WFD to appropriately manage the critical needs within this Project. The Project is relatively small compared to other capital bond projects in the Portland-Salem Metro area, but they are large and significant for WFD and play a major role in our coverage to the public. With existing WFD staff, and the Project Team experience, WFD will be able to overcome the technical complexity of the Project by establishing a team with the Deca Architects and CM/GC who will work together collaboratively with WFD during all project phases from design development through construction. There in a considerable benefit having a qualified CM/GC play a role as an integrated team member earlier in the project time-period along with WFD, Deca Architects and other Project members.
- Whether the Project involves new construction or renovates an existing structure: This Project involves renovation of existing structures in an operational environment.
- Whether the Project will be occupied or unoccupied during construction: The site will be occupied during the course of construction.
- Whether the Project will require a single phase or multiple phases of construction work to address specific project conditions: The Project will include multiple phases of design development, establishing a GMP, and a construction phase. Staff finds that selecting experienced contractors through the CM/GC method will allow WFD to benefit from their technical expertise.
- Whether WFD has the personnel, consultants and legal counsel that have necessary expertise and substantial experience in alternative contracting methods: WFD staff, along with Deca Architects, an experienced contractor, as well as other project team members and legal counsel together have the necessary level of experience to produce high quality outcomes.