Memorandum
City of Lawrence
TO: Tom Markus, City Manager
FROM: Melinda Harger, Utilities Engineer
DATE: February 15, 2018
RE: Alternative Project Delivery Procedures Development Update
CC: Diane Stoddard, Assistant City Manager
Casey Toomay, Assistant City Manager
Brandon McGuire, Assistant to the City Manager
Toni Wheeler, City Attorney
Bryan Kidney, Finance Director
Dave Wagner, Utilities Director
Charles Soules, Public Works Director
Scott McCullough, Planning and Development Director
Gregory C. Burns Jr., Chief of Police
Anthony Brixius, Police Captain
Recommendation
Staff recommends amending the Charter Ordinance to expressly authorize the use of alternative project delivery upon a finding by the City Commission that alternative project delivery is in the public interest for a particular project. Procedures for alternative delivery are currently being developed by staff as required by Section 3 of the ordinance and will be approved by the City Commission.
Research and Findings on Procedures
Staff is in the process of researching alternative delivery procedures established by other public entities and organizations to determine factors considered on projects prior to the decision to proceed with alternative delivery, procurement process used for team selection, and requirements for project management and oversight. Staff will include these components in the procedures for alternative delivery.
The state is permitted to use alternative project delivery processes through the Kansas Alternative Delivery Building Construction Procurement Act, which has specific requirements. One requirement is that the following factors are considered before deciding to use alternative delivery procurement for a project: substantial savings of time or money provided over the traditional design-bid-build; overlapping design and construction would meet the needs of the end user; accelerated schedule needed for emergency repairs; significant phasing or technical complexities requires the use of an integrated team to solve project challenges prior to construction; and the use of an alternative delivery method will not encourage favoritism or substantially diminish competition for the public contract. Staff recommends a similar list of factors be included in the City’s alternative delivery procedures.
The fundamental principle guiding the procurement procedures for alternative delivery is fair and open competition. Procedures will require that the overall selection process and evaluation criteria be described in a solicitation document. Best value evaluation criteria would include qualifications, experience, technical approach, proposed personnel, cost, and other factors based on the project. Guidelines on the selection process and the evaluation criteria will be included in the alternative delivery procedures. Staff will utilize research compiled by the Center of Procurement Excellence to assist with development of these guidelines. Staff is also working with Dr. Brian Lines to incorporate elements consistent with his research and aspects of the Expertise-Driven Project Delivery system for procurement.
Project management guidelines within the procedures will include best practices to promote communication and accountability as well as provide transparency that protects the integrity of the process and the interests of the City and the public. Contract language requirements, such as having an “off-ramp” option to transition to traditional delivery if in the best interest of the project, will be provided. The procedures for using an “open book” competitive bid process to gather competitive bids for subcontracted work will be included. Formal tracking of cost and quantities throughout the project will be required.
Establishing an Alternative Delivery Procedures allows the best delivery method to be selected for each project based on specific requirements and constraints. The option to use alternative project delivery is a “best practice” that allows the City to enhance project outcomes.
City Attorney Toni Wheeler Provides the Following for Inclusion
The City Attorney recommends proceeding with adopting the charter ordinance based on staff’s pledge and commitment to develop the procedures for selecting the delivery method and performance of the alternative project delivery as described in this memorandum. Charter ordinances, once passed by the governing body, must be published in the city newspaper for two consecutive weeks. The charter ordinance is not effective until 60 days after its final publication. This interim period will provide sufficient time for staff to forward the procedures to the City Commission for its review and approval. To accommodate the Commission’s desire to have the procedures required in Section 3 of the charter ordinance in place before the charter ordinance is effective, Section 9 of the ordinance was modified, and can be approved by the governing body on second reading of the ordinance. The underlined, italicized text is new:
Section 9. This is a Charter Ordinance and shall take effect sixty-one (61) days after final publication unless a sufficient petition for a referendum is filed and a referendum is held on the Ordinance as provided in Article 12, Section 5, Subsection (c)(3) of the Constitution of Kansas, in which case the Ordinance shall become effective if approved by a majority of the electors voting thereon. In the event there is no referendum, this Ordinance will be effective sixty-one (61) days after final publication or after the Governing Body has approved the required procedures referenced in Section 3, supra, whichever shall occur later.