Motown Gushing Over Design-Build

By Peter Green
The author, a former transportation senior editor for
Engineering News-Record, lives in New York City and
writes occasional pieces for Design•Build.

The driving force behind the department’s construction program is Awni Qaqish, assistant director of engineering services. Qaqish now manages a five-year capital budget of $3.2 billion. After 2008, he anticipates another $1 billion in projects at three water treatment plants. According to Qaqish, that means up to $1 billion in design-build work is on the horizon.

To handle the job, Qaqish heads a staff of over 300 for design and management, which makes the group "the largest consulting firm in the metropolitan area," he says. And it has been busy. "We introduced design-build into the department’s program and currently have 20 design-build projects totaling $1.1 billion either completed, under contract or under development," Qaqish says. He estimates that design-build has already saved the agency about $163 million. "That includes $55 million in inflation, $90 million in project oversight and $18 million in engineering efficiency," he explains.

DWSD will use design-build for a number of projects (see chart), possibly including installing major water transmission mains, which could total $90 million. In February 2006 Detroit is hosting the Superbowl and needs to replace a $20-million water distribution system around the stadium. "In order to meet schedule we’re going with design-build," says Qaqish. "We did a pilot study last year and determined that design-build is a viable delivery system for replacing aging water distribution mains. This will be a first for us."

DWSD advises numerous consultants and municipalities on the collaborative delivery system and Qaqish readily offers some suggestions. "For design-build to work, you need a well-defined scope, quality-based selection and the right individual from your team overseeing the project. You also need to make sure everyone is pulling together towards the common goal," he says. Throughout the projects, DWSD holds numerous workshops for its staff and other project participants on such issues as scope development, project evaluation, design and training, Qaqish says. The department also involves its maintenance and operations staff early. For those new to design-build, Qaqish suggests starting with a small greenfield project as a test and "make sure you have a champion for the project. That way, prestige is on the line, but once successful, everyone wants to buy in because they see the benefits of faster delivery, less change orders and it saves money," he says.

Big Boost

As a public utility, DWSD cannot interrupt service to its customers while upgrading plants and that kind of work is always going on. "Our infrastructure requires constant improvement to meet environmental regulations," Qaqish says. And with the department’s tenfold increase in the capital program, it had to turn to design-build delivery to considerably reduce the time between a project’s conceptualization and completion.

Qaqish

    Varying state regulations have caused problems in implementing design-build project delivery on the full scope of the department’s projects. It constructs water and wastewater treatment plants, but state environmental regulatory oversight differs for each type of service and that affects design-build delivery, at least for now.

All of the department’s projects require a permit from the Michigan Dept. of Environmental Quality, but that agency has stricter regulations for wastewater than for water. To obtain a permit for wastewater plants, DWSD must submit "biddable plans and specifications," which makes it difficult for the utility to achieve the full benefit of design-build delivery. "DWSD is working with the state to resolve these concerns in order to allow a wider application of design-build to wastewater projects," says Qaqish. For water treatment plants, the state grants permits for design-build projects based on the generally accepted 30% plans.

Design-build had a modest start at DWSD with the installation of a lime-mixing plant at a wastewater treatment plant in the early 1980s. But in November 1996, DWSD started its wider use of design-build with a booster pumping station. "In the 1980s, a similar job would have taken five years to complete. We took 10 months," says Qaqish. The icing on the cake is that the station added 40 million gallons per day in sales and the $7.4-million project paid for itself in three years, he says.

The seven Water Board Commissioners, who have to approve all engineering department contracts, were sufficiently impressed with design-build that they recommended trying it on all future projects. And that’s a tall order.

Although Detroit isn’t a large city, the department serves 126 communities in a 1,000-sq-mile metropolitan area with water and a slightly smaller area, 700 sq miles, with wastewater treatment, making it the third-largest water district in the U.S. DWSD, in effect, functions as a nonprofit business, with its rate-based revenue equaling its expenditures. The rates are the fifth-lowest in the country.

The department’s modus operandi for design-build projects starts with identifying the scope of the work and establishing milestones for the various stages. With assistance from a consulting engineer, it develops a request for proposals and meets with each respondent for a confidential discussion 30 to 45 days before receiving the technical proposals. "No notes are taken unless an issue affects both parties," says Qaqish. "Both sides ask questions and seek clarifications and if the closed door discussion elicits changes to the sealed financial bid, the respondent can provide additions or deductions to the original sealed bid in another sealed envelope."

Water utility constantly upgrading its facilities. (Photo courtesy of Hazen & Sawyer)

Pumps are heart of plant that opened this month.(Photo courtesy of DWSD)

After evaluating and scoring technical proposals, the owner opens the bids and enters them into the final evaluation process. Detroit works with a quality-based selection system that generally scores 40% for technical proposal, 10% for the team and its staff, 20% for the work plan, 5% for local economic development and 25% for life-cycle costs, which includes capital and 20-year lifetime cost.

Design-build works well in emergencies. When the roof of an underground concrete reservoir at the Lake Huron Water Treatment Plant collapsed in June 1999, DWSD had to replace it in a hurry. The department called in NTH Consultants, Ltd., Farmington Hills, Mich., to determine the cause of the collapse and to analyze the economics of repairing the existing reservoir, razing it and reusing the site, or building anew on an adjacent site. Charles Roarty Jr., vice president in the firm’s Detroit office, says the latter was the best choice, but geotechnical analysis indicated the adjacent site would need considerable piling to carry the load.

DWSD also engaged Greeley and Hansen LLC, Chicago, to assess sizing requirements for a new reservoir in relation to the capacity of the treatment plant. The department then retained the two firms and PMA Consultants LLC, Ann Arbor, Mich., to develop an RFP and provide oversight throughout the project. Paul Vogel, principal in Greeley’s Detroit office, says the three firms had three weeks to prepare performance specifications that would be equivalent to 30% design.

To save time, DWSD solicited contractors three weeks before publishing the RFP and identified six local contractors nearest two of the four companies in the country that specialize in constructing large wire-wrapped underground concrete reservoirs. Putting pressure on the six, the RFP required them to submit priced proposals in less than three weeks.

Four responders dropped out and the remaining two submitted proposals in 15 days. Then the agency and its consultants in a round of all-night sessions evaluated the remaining two proposals and awarded a $37.3-million contract to EBI Detroit Inc., which had engaged the Detroit office of Finkbeiner, Pettis and Strout Inc., to design the project.

"We saw the urgent need and started some of our preparations, with the cooperation of the department’s consultants, in order to offer about 70%-complete design in our proposal," says Robert Schimmel, EBI president. The jump-start was necessary for the contractor to attempt to put a 30-million-gal-capacity below-grade reservoir in service in 11 months.

Quick Response

Speed was needed and delivered on other projects. In December 1998, DWSD signed a $285-million design-build-maintain contract to replace a 1920s water treatment plant in Waterworks Park. The new plant’s 240-million-gallons-per-day capacity sets a record for public water or wastewater design-build projects in the U.S., says Qaqish. It opened this month.

DWSD engaged Hazen and Sawyer PC, New York City, as its consultant to assist with developing a performance-driven RFP and evaluate proposals. "The RFP asked for major equipment without naming brands, specified capacities and called for redundancy and full automation in the equipment," says Alexander Varas, vice president in the firm’s Detroit office. Three teams responded and the owner selected DWT, a joint venture with Black & Veatch, Overland Park, Kan., Montgomery Watson Harza, Broomfield, Colo., Walsh Construction, Chicago, J.S. Alberici, St Louis, and Motor City Electric Co.

Hazen and Sawyer previously had worked as a consultant for DWSD’s design-build projects. Varas says he prefers working for an owner rather than as a partner in a joint venture that takes a financial risk.

In 1999, DWSD, like many other firms, thought that the much-heralded Y2K crisis could affect its power supply. To protect its vital services, the department required that 52 emergency generators totalling 88 Mw be installed at 13 sites. The department awarded a $52-million design-build contract to Motor City Electric Co., which served as prime contractor to supply and install the generators. The contractor engaged the local office of Tetra Tech MPS to design the installations.

The RFP required the generators to be running by January 1, 2000. Starting in May and working at all 13 sites simultaneously, Motor City completed the job in December 1999.

Motor City Vice President Paul Gillespie thinks design-build is great. "All people involved, including the owner, work as a team," he says. "They aren’t worrying about protecting their own interests. And working as an at-risk contractor, hiring a designer with whom we have had a good relationship works well since we know ahead of what’s coming up."

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