By R. David Curfman, P.E., SES, M.SAME
The needs of the U.S. Navy to replace aging infrastructure and provide support for the 21st century fleet and modern weapons platforms are giving rise to military construction projects of unprecedented scope and complexity. These large-scale projects present significant design and construction challenges that are driven by constrained site locations, economic fluctuations, supply chain disruptions, and ever-evolving mission needs.
Overcoming these challenges demands innovative construction project delivery methods that maximize partnering and leverage the full breadth of project team expertise across the entire project lifecycle—and they must go beyond what is available with design-build (DB) or design-bid-build (DBB) delivery methods. In order to maintain American maritime dominance as global competitors rise, it is more important than ever to ensure that projects are delivered on time and within budget.
With those goals in mind, Naval Facilities Engineering Systems Command (NAVFAC) has begun exploring the use of early contractor involvement (ECI) to meet the demands of our increasingly complex construction projects and programs.
ECI shares characteristics with traditional DBB project delivery, based on the distinct contractual relationships the government has with the Designer-of-Record and the construction contractor. It also shares characteristics with a traditional DB project by incorporating construction contractor involvement early in the design process. However, ECI project delivery methods differ from both DB and DBB in areas of acquisition strategy and delivery method. NAVFAC defines ECI as “project delivery methods in which one or more construction contractors contribute in the design phase of project development by providing constructability input to the government, with no contractual relationship between the contractor and the project’s Designer-of-Record.”
The goal with ECI is to leverage the expertise of construction contractors and their knowledge of means and methods during design in order to reduce risk of cost and schedule growth during the construction phase. Suggestions by construction contractors during the design phase of a project can provide valuable benefits to the government.
Construction contractors, with their perspective focused on executing the design, have the ability to identify potential construction challenges in the design as it is being developed, which in turn can allow the Designer-of-Record to adjust the design to mitigate those construction risks and facilitate the most efficient construction means, methods, and sequencing. Construction contractors can offer innovative approaches and value engineering strategies based on their practical experience; these then can be incorporated into the design to improve the final product. Involvement of construction contractors during design also facilitates improved team communication and a deeper understanding of the design solution, further mitigating risks that would typically arise within the construction phase.
NAVFAC is exploring a variety of ECI project delivery tools, with two methods currently being piloted: Single Task Order and Multiple Task Order.
Single Task Order. This method uses fair opportunity competition and awards a task order for preconstruction services with an option for construction to a single contractor under a Multiple Award Construction Contract.
The solicitation package includes 35 percent design development documents and requests that offerors submit a proposal that addresses technical factors and provides pricing for both the preconstruction services and one or more construction options. Technical factors typically call for offerors to describe their approach to, and experience with, performing preconstruction services, their relevant construction experience, and their past performance.
Price evaluation for the contract award considers proposed prices for the base and all options. The pricing uses a Fixed Price Incentive – Successive Targets structure for the construction option, with the intention to convert to a firm fixed price when it is time to exercise the construction option. For the construction option, offerors propose an initial target cost and a ceiling price.
The offeror’s initial target cost, along with a profit adjustment formula provided by the government, allows the government and the contractor to share the risk of cost increases and the benefit of cost decreases attributable to the design details through the maturation from 35 percent to 100 percent development.
When the construction option is exercised, a firm fixed price is negotiated, using negotiated firm target costs and profit adjusted to the formula as a guide. The contract price for the construction option is limited by a ceiling price established at the time of the initial contract award.
Multiple Task Order. This method awards a task order for preconstruction services with the same scope to each Multiple Award Construction Contract holder. Since the task orders are for preconstruction services only, proposals do not include construction pricing. Solicitations for preconstruction services are typically released at the beginning of the design development. As a result, minimal design documents are included in the solicitation package.
At completion of design, a task order for construction will be awarded to one contract holder through fair opportunity competition, although in some circumstances a full and open competition could be used to award a stand-alone construction contract.
Regardless of the ECI project delivery method type, the exact nature and scope of the preconstruction services will vary by project, but will generally include several key elements.
- Review and evaluation of design documents at specified stages of development to identify potential constructability challenges and risks.
- Providing value engineering-style recommendations and alternative ideas to improve the final product.
- Advisement on efficient construction means and methods.
- Providing regularly updated construction cost information with substantiating documentation.
- Identification of construction cost and schedule risks and mitigation recommendations.
- Identification of opportunities to increase small business subcontractor participation.
THE RIGHT SITUATION
NAVFAC recognizes that ECI is not right for every project, as it adds costs due to the addition of contractor involvement during design. Therefore, ECI project delivery methods are being tactically implemented where doing so is most likely to provide a return on the upfront investment of additional resources.
Primarily, ECI will be utilized for complex new construction projects. However, NAVFAC may also find opportunities to implement ECI on complex renovation construction projects that have similar challenges.
To identify projects where an ECI delivery method is the best approach, we will be looking for scope that will benefit from industry expertise and knowledge to address certain challenges. These criteria highlight the value that can be derived through ECI.
- Difficult project locations for mobilization, material, equipment, or local labor.
- Unique or “one of a kind” construction means and methods.
- Difficult to anticipate construction phasing and sequencing.
- Need for emerging technologies, such as zero emissions or electrification.
- Construction schedule and/or projects with critical mission need dates.
INNOVATING & DELIVERING
NAVFAC is committed to delivering mission-ready military construction projects that meet critical needs in support of the warfighter, warfighting, and our U.S. Navy and U.S. Marine Corps teams. Delivering military construction projects on time and on budget is of increasing importance as the Navy ramps up efforts to replace aging infrastructure with state-of-the-art facilities capable of accommodating the fleet of the future.
NAVFAC is incorporating ECI into its arsenal of project delivery methods and deploying it where contractor input during design will best serve the goals of reducing risk of cost and schedule growth during construction. While much work remains in the development and implementation of ECI, we remain steadfast in our commitment to innovation and continuous learning and improvement. We will leverage lessons learned and relationships with industry partners to create a tool that improves project execution and delivers “win-win” results for all stakeholders.
R. David Curfman, P.E., SES, M.SAME, is Chief Engineer and Assistant Commander for Design & Construction, NAVFAC HQ; email@example.com.
[This article first published in the September-October 2022 issue of The Military Engineer.]