Across the US, there is a significant need for water and wastewater infrastructure to be modernized, expanded or new capacity built, particularly in the fastest growing states like Texas, which is increasing at an average rate of 900 people per day. Combining that need for more capacity with the infrastructure focus at the federal level, access to funding and incentives is readily available right now, making it is a very good time for municipal partners to start planning and building for the future.

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But what is the best delivery method for larger and more time-sensitive projects?

For decades, waterworks projects have been primarily awarded based on the lowest bid, but that is changing, especially for large water/wastewater projects in the US. Owners are tapping into the power of alternative delivery methods, including progressive design-build, design-build and construction management at risk (CMAR) to more efficiently deliver their major projects.

Owners are increasingly bypassing the hard-bid award method in favor of alternative delivery methods where they choose contractors based on factors that go beyond cost alone, including qualifications, key experience and trust. As a project’s size and complexity increase, cost is no longer the most important selection parameter when choosing a delivery team. Alternative delivery gives the owner much better visibility of the cost, risk and potential outcomes early in the process, and enables more collaborative decisions to be made by the team.

“All Stakeholders - Owners, Designers, Contractors, Suppliers and Taxpayers - can benefit when Alternative Delivery projects are implemented correctly.”

Although Webber’s Waterworks Division, PLW Waterworks, still uses hard-bid delivery on many projects, we’ve found that using CMAR delivery methods on projects larger than $50 million helps drive better end results for all stakeholders.

For owners specifically, a major benefit of using a CMAR delivery model is having clear visibility of project cost drivers early in the delivery process. For example, on these projects when design is 30 percent complete, PLW Waterworks, acting as the general contractor for the project, actively collaborates with the designer and owner to develop schedule and cost models, and to profile the overall risk of the assignment. At 60 percent design completion, we execute an open book procurement process to aggregate all the bids, and self-perform work elements, into a guaranteed maximum price (GMP). Once all parties agree to the GMP terms, we proceed with construction. As our experience with CMAR has grown, the ability to accurately model cost early has improved.

Based on all these benefits, we are seeing a significant increase in the use of alternative delivery across the country, although their use varies by region. In Texas, we have increasingly seen CMAR used as the primary delivery method. During the past five years, PLW Waterworks has signed over $1 billion in new contracts in Texas, including $400 million in hard bid and Competitive Sealed Proposal (CSP) projects and $600 million using alternative delivery.

water management

The need for more water capacity paired with infrastructure dollars available at the federal level make it an idea time for municipal partners to start planning and building for the future.
Photo: Courtesy of Webber and PLW Waterworks

For example, PLW Waterworks is currently delivering a new surface water treatment plant for the City of Pearland, TX using a CMAR contract. The collaboration with the owner and the design team has been key to the successful delivery of the project and has allowed key issues to be identified early and addressed by the team. The result is a project that met all team project goals and will be delivering water to the community on schedule and budget.

PLW has recently been awarded two large projects that were procured using a CSP structure, where cost and qualifications were used to select the contractor. The City of Georgetown chose CSP for the delivery of a critical Water Treatment Plant valued at $175 million and the City of San Angelo also utilized CSP for the delivery of a critical groundwater pumping and treatment project. In both of these procurements, past performance and cost were evaluated to determine best value.

These are just a few examples of how alternative delivery methods are pulling everyone together to focus on common project goals and that’s one of the main reasons why owners are migrating towards it.

waterworks

Pearland Surface Water Treatment Plant. 
Photo: Courtesy of Webber and PLW Waterworks

How Owners Can Effectively Harness the Power of Alternative Delivery

Based on our experience with larger capital projects, owners should hire contractors based on experience and trust, not on cost alone. Owners need a partner that will be a good steward of their money and can effectively collaborate with the designers to achieve the best possible project delivery. Traditional hard-bid delivery often put owners in the middle of conflicts between the design and construction partners, many times leading to delays and cost overruns. The best way to avoid that is to truly drive the partnering arrangement throughout the entire team from the start of the design phase to final completion.

We are also seeing another trend of owner’s hiring an advisor to serve as an intermediary with the team members. In a CMAR environment, the owner will often rely on the designer as a trusted advisor because that aligns with the traditional design-bid-build delivery approach.

Photo: Courtesy of Webber and PLW Waterworks

As it relates to getting started with alternative delivery, owners must thoroughly educate themselves before starting that journey in order to fully reap the benefits of using that model, including:

  • Take the time to collaborate and learn before engaging in a major project. Industry resources such as DBIA or WDBC are both very good sources of information.
  • Talk with other owners that have already used alternate methods.
  • Choose partners based on value, experience and proven performance, rather than just price.


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