Oct 09, 2020

Delivery Methods & Securing the Value of Water

Exploring alternative delivery methods to secure the value of water & its future 

mccarthy

Let it sink in, just for a moment, that there is a day affectionately known as “Imagine a Day Without Water.” Not “Water Day,” what would seem like an appropriately named calendar square that aligns with the celebratory mood of “Earth Day” or even “Arbor Day.” No, this day – landing Oct. 21 just before, and equally as frightening as Halloween — is challenging us to actually ponder what life would be like without water, which is terrifying. 

When it comes to the world’s most precious natural resource (sorry oxygen), the moniker “Imagine a Day Without Water” speaks to the gravity of the situation we face as a nation. 

Whether it is considering the estimated 650 water main breaks each day, countless miles of leaking supply pipe (or worse yet, sanitary sewers), environmental compliance issues faced by numerous treatment facilities, or land subsidence and drained aquifers, reports have been pouring in about America’s aging water/wastewater infrastructure for years. The most recent National Infrastructure Report Card from 2017 rated drinking water infrastructure at a D and wastewater infrastructure at a D+. In 1988 when the National Council for Public Works Improvement submitted its first-ever consolidated report to the president and Congress, the ratings were B and C, respectively. 

The report is alarming as ever due to increased environmental concerns and funding issues that jeopardize future projects and water sustainability. All told, an estimated $1 trillion is needed over the next 25 years to meet increased water demands. While conservation efforts have intensified and data shows that we are more conscientious than ever before, the inefficiencies, dilapidated conditions and outdated technologies of typical water and wastewater infrastructure are reaching critical levels. There are solutions, but improving the national water infrastructure begins with funding. Projects that entail expanding, rehabilitating, upgrading or creating new plants and infrastructure while utilizing innovative and sustainable solutions to maximize and improve water services are a must. When combined, the need for funding and innovation within projects provides an opportunity for owners to build value. 

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Alternative Solutions to Secure Water’s Value

More prevalent in other sectors like commercial building or transportation, alternative project delivery has recently gained greater traction in the water sector. More and more, municipalities (previously steeped in traditional design, bid, build delivery) are seeking this value-based methodology for their water related capital expenditures. Although alternative project delivery is not a one size fits all solution, many projects can still leverage the low interest and tax-exempt municipal financing afforded to local governments by way of federal funding. Further, it is imperative that state legislation provides the flexibility and opportunity for procuring entities to maximize value by selecting the right delivery method for each of its projects.

One of the best ways to establish and further deliver value for critical infrastructure construction is via alternative project delivery methods, including construction manager at risk (CMAR), design-build (DB), and progressive design-build (PDB). 

Construction Manager at Risk

A collaborative, concurrent and unified approach to design and construction while maintaining a traditional contracting approach. This approach aims to save time, ensure early cost-certainty and maximize efficiency. 

Design-Build

A single entity approach that capitalizes on the continuity of integrating design and construction to maximize intuitive design and deployment of the newest technologies. 

Progressive Design-Build

Similar to design-build in its single entity approach, but has the earliest owner selection of design-builder to initiate project development, which ensures complete alignment of project goals while maximizing time savings. 

Building Value, Not Just Infrastructure

In general, alternative delivery value is most often realized via an increasingly collaborative environment where common goals are expanded and include solutions for risk mitigation, schedule constraints, constructability, quality, safety and overall financial impact. 

Traditional delivery of large-scale multi-million-dollar infrastructure projects may seemingly elicit low financial impact, but does it provide the most value? While cost is crucial to all projects — especially those funded by taxpayers and often measured in “cost-savings” — design, bid, build delivery is singularly focused and almost certainly culminates with selection of the “apparent low bid.” 

However, by primarily focusing on initial bid cost, owner’s may lose the overall value of quality, safety, technology and collaboration provided within alternative delivery. While alternative delivery is not a silver bullet, which itself ensures successful project outcomes, it is important to recognize that “value” is the true goal and “cost-savings” includes concepts like risk mitigation, safety, quality, schedule and final project cost. Strict guidelines and metrics ensure objectivity by regulating scoring criteria where a selection committee carefully rates proposing firms based on qualifications, schedules, project approach, innovation, safety, etc. Furthermore, interviews can then be conducted with several firms where the collaborative process can be on display. Initial price is only one component of alternative delivery bids and can be weighted to account for any percentage of the selection criteria, which still maximizes cost-competition. 

Owner Benefits

Where alternative delivery really stands out is in the execution. A concurrent (or near concurrent) procurement of design and construction occurs, where early engagement of all stakeholders creates a collaborative approach and intuitive process by which project design progresses at the same time as construction budgeting, planning, logistics, scheduling, etc. This diversity of thought at inception maximizes the value of hiring various subject matter experts. And by overlapping what are traditionally sequential processes, this ensures coordination of design and construction, saves time, and provides early cost-certainty and flexibility to make adjustments that align with budgetary or other constraints. 

Alternative delivery provides an owner with the freedom to make changes before they become “change orders,” to consult the contracting community before realizing budgetary shortfalls, and to deliver much needed infrastructure improvements in expedited timeframes. Moreover, alternative delivery more often capitalizes on sustainability, constructability, operability and other long-term innovative performance criteria as new and alternative methodologies and technologies are examined by all stakeholders. 

Value analysis, or more commonly referred to as value engineering, is a staple of alternative delivery in which each stakeholder provides increased value with a “two-heads are better than one” mindset. Careful consideration of specific project alternatives that yield betterments or cost-savings can greatly reduce capital expenditure and ensure maximum value of technological process deployments and other increased efficiencies within the scope of work. 

Water professionals in this country can affect change, not only in the design and construction of critical infrastructure that serve communities, but in attitudes and approaches to educating the public, in creating political awareness, and in subsequent discourse about much needed government funding. 

It is going to take innovative ideas, technologies and methodologies focused on maximizing project value to push this change through. Alternative delivery can be part of a solution that focuses on the value of the entire system and provides additional flexibility for increasing that value and building an improved and sustainable future. 

And we can start that conversation by asking, “Did you know there is a national day called ‘Imagine a Day Without Water?’” 

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About the author

Christian Annexy is project director for McCarthy Building Co.’s heavy civil group. Annexy can be reached at [email protected].

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