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    Introduction to design-build and construction manager at risk procurement for Ohio public entities

    I. Design-build

    Design-build (DB) means a firm is responsible to a public owner for both the design and construction of a project. The procurement process for public design-build projects is set forth in the Ohio Revised Code (ORC) and Ohio Administrative Code (OAC).

    a. Criteria architect/criteria engineer selection

    Before selecting a design-builder, the public owner must select a criteria architect or criteria engineer (CA/E). The CA/E is not the DB firm and cannot be associated with the DB firm that is later selected. The CA/E will develop the baseline design criteria for the project (e.g., floorplan, pre-schematics, performance criteria, etc.). The CA/E may continue to be involved in the project during design and construction, providing oversight and construction administration services, if the public owner needs those services. If the public owner has an architect or engineer on staff with the expertise for the project, this staff member may serve as the CA/E after notifying the Ohio Department of Administrative Services. Otherwise, a public owner must select a CA/E following the same qualifications-based selection process used for any design professional. (ORC 153.65–153.72).

    The public owner must prepare a request for qualifications (RFQ) soliciting qualifications from interested design firms and announce the RFQ publicly. The CA/E scope in the RFQ should be carefully defined and limited to developing baseline design criteria (not the full design documents), participating in the selection process for the DB firm, and providing services during design and construction, if the public owner would like those services. Note that pricing cannot be requested at the time qualifications are provided.

    Publishing a legal notice in the newspaper satisfies the notice requirement. The notice may also be posted on the public owner’s website and provided to plan rooms. A copy of the RFQ may be sent directly to firms by the public owner. No express timeframe is required for the RFQ notice period. However, the law states that the public announcement must “be made sufficiently in advance of the time that responses must be received….” (ORC 153.67). Typically, two weeks is a reasonable period between publication of the legal notice in the newspaper and the deadline to submit qualifications.

    Once Statements of Qualifications (SOQs) are received, the public owner ranks the firms on the basis of qualifications. The public owner can then request a price proposal from the top-ranked firm and enter into contract negotiations. This process can take as little as two weeks from the initial announcement of the available contract. However, additional time for contract negotiations is often required.

    b. Design-builder selection

    Selecting a DB firm is a two-step process under Ohio law.

    Step one: Qualifications

    The public owner must first issue and announce a Request for Qualifications (RFQ). The RFQ must identify the qualifications criteria that will be used to evaluate the firms, including the required criteria listed in OAC 153:1-6-02. No pricing information can be requested in the RFQ.

    Publication of a legal notice about the available contract is not required; the RFQ may be sent directly to firms identified as capable of providing the services to satisfy the notice requirement. However, a legal notice may be published in the newspaper, posted on the public owner’s website or provided to the plan rooms. Again, there is no express timeframe required for the notice period, and two weeks is typically a reasonable amount of time.

    In order to complete this evaluation process, the public owner must convene an evaluation committee and name a representative as the selection coordinator to facilitate and manage the procurement. The public owner has the discretion to select the evaluation committee members, but the evaluation committee cannot constitute a quorum of the public authority. The CA/E participates and advises in the evaluation of firms but does not vote. The public owner’s legal counsel may advise the committee in the evaluation process but, like the CA/E, does not have voting power.

    Once SOQs are received, the evaluation committee reviews and evaluates the qualifications using the announced criteria. The evaluation committee should select a short list of qualified firms. A minimum of three firms is required if there are at least three respondents. This process of short-listing firms based on qualifications can take as little as two weeks from the initial announcement of the available contract and the compilation of the short list of firms; however, three weeks is more typical.

    Step two: Technical and pricing proposals

    The public owner prepares and provides the short-listed firms a Request for Proposal (RFP). The RFP includes more detailed information about the project, the design criteria prepared by the CA/E, a preliminary project schedule, a description of the Guaranteed Maximum Price (GMP), anticipated timeframe for the GMP and the form of contract (prepared by legal counsel). Required criteria to be included in the RFP are provided in OAC 153:1-6-02, and the public owner may add additional criteria. The RFP must identify both technical and pricing criteria. The pricing includes amounts for design services, preconstruction services, the DB fee, general conditions and contingency. (ORC 153.693). In rare circumstances where the design or project scope is more complete, the public owner may also request that a GMP is submitted with the technical and pricing proposals (in a separate sealed envelope). Otherwise, the selected DB will first provide design services and will submit its GMP proposal when the design is sufficiently complete.

    There is no statutory time period requirement for the RFP, but the timeframe must be reasonable based upon the complexity of the project. After the pricing and technical proposals have been submitted, the evaluation committee must interview each short-listed firm. These interviews are not scored. Rather, the purpose of the interviews is to provide each firm the opportunity to clarify its proposal and respond to any questions the evaluation committee may have. (OAC 153:1-6-02). 

    The evaluation committee must review and evaluate each pricing and technical proposal using the technical criteria and pricing criteria included in the RFP. The award standard for a DB is “best value.” When determining best value, price is a factor, but qualifications are also considered. A specific formula or weighted calculation is not required. If a GMP was requested, each must be opened and evaluated after the required interviews and evaluation of technical and pricing proposals.

    II.        Construction manager at risk

    Construction manager at risk (CMR) involves a single firm responsible for the construction of a project. Unlike multi-prime, the CMR, not the public owner, holds the various subcontracts for the construction work. Unlike a general contractor, the CMR may perform preconstruction duties and must provide the public owner with an open-book GMP (like a DB). (ORC 9.33). As with the DB delivery method, the ORC and OAC define the required procurement process for public CMR projects.

    a. Architect/engineer selection

    The public owner will need to procure an architect/engineer (A/E) to be the design professional of record for the project. This A/E selection can occur simultaneously with or shortly before CMR procurement. (When an A/E and CMR are procured around the same time, the CMR will have more familiarity with the design and can perform preconstruction duties during the design process, such as cost-estimating, value engineering and/or constructability review.) Note that the public owner may want to have the same evaluation committee for A/E procurement and CMR procurement. If so, it should convene its evaluation committee during the A/E procurement process.

    Selection of the A/E follows the same qualifications-based selection process as described for the CA/E. (ORC 153.65 – 153.72). The RFQ for architect or engineer of record services must be issued and publicly announced. Publishing a legal notice in the newspaper satisfies the notice requirements. The notice may also be posted on the public owner’s website and provided to plan rooms. A copy of the RFQ may be sent directly to firms by the public owner. Again, pricing cannot be requested, and the typical time period between publication of the legal notice in the newspaper and deadline for qualifications submittals is about two weeks.

    Once SOQs are received, the public owner ranks the firms on the basis of qualifications. The public owner can then request a price proposal from the top-ranked firm and enter into contract negotiations. The process of procuring an A/E can take as little as three weeks from the notice being placed in the newspaper to the signing of an agreement for services. However, contract negotiations often extend this timeframe.

    b. Construction manager at risk selection

    The procurement of the CMR for the project can occur simultaneously or shortly after the A/E procurement so that the CMR will have more familiarity with the design and can perform preconstruction duties during the design process. Like selecting a DB, choosing a CMR is a two-step process under Ohio law.

    Step one: Qualifications

    For the most part, the qualifications phase of the selection process for a CMR tracks the DB processes (except that a notice time frame is required, as noted below). The available contract for a CMR firm must be announced through an RFQ. The RFQ must identify the qualifications criteria that will be used to evaluate the firms, including the required qualifications criteria in OAC 153:1-6-01. No pricing information can be requested on the RFQ.

    Publishing a legal notice of the RFQ in the newspaper satisfies the notice requirements. The notice may also be posted on the public owner’s website and provided to plan rooms. A copy of the RFQ may be sent directly to firms by the public owner. The time period for interested firms to submit SOQs must be at least 30 days after the advertisement is first made.

    In order to complete this evaluation process, the public owner must convene an evaluation committee and name a representative as the selection coordinator to facilitate and manage the procurement. The public owner has the discretion to select the evaluation committee members, but the evaluation committee cannot constitute a quorum of the public authority. The A/E may advise in the evaluation of firms but does not vote. The public owner’s legal counsel may advise the committee in the evaluation process but also does not have voting power.

    Once the SOQs are received, the evaluation committee reviews and evaluates the qualifications in order to compile a short list of qualified firms. A minimum of three short-listed firms is required if there are at least three respondents. This step typically takes at least 40 days from the date of the public notice.

    Step two: Technical and pricing proposals

    The public owner prepares and provides the short-listed firms an RFP. The RFP includes the scope of the project, the proposed schedule for the project, preliminary design documents (if any), a description of the GMP, anticipated timeframe for the GMP and the form of contract (prepared by legal counsel). Required criteria to be included in the RFP are provided in OAC 153:1-6-01, and the public owner may include additional criteria. The RFP must identify both technical and pricing criteria. The pricing includes amounts for preconstruction services, the construction fee (which includes the at-risk fee), general conditions and contingency. (OAC 153:1-6-01). In rare circumstances when the design or project scope is more complete, the public owner may also request that a GMP is submitted with the technical and pricing proposals (in a separate sealed envelope). Otherwise, the selected CMR will submit its GMP proposal when the design is sufficiently complete.

    There is no statutory time period for when the proposals should be returned to the public owner. The evaluation committee must interview each short-listed firm after the pricing and technical proposals have been submitted. These interviews are not scored. Rather, the purpose of the interviews is to provide each firm with the opportunity to clarify its proposal and respond to any questions the evaluation committee may have. (OAC 153:1-6-01).

    The evaluation committee must review and evaluate each pricing and technical proposal using the technical criteria and pricing criteria included in the RFP. The award standard for a CMR is “best value.” When determining best value, price is a factor, but qualifications are also considered. A specific formula or weighted calculation is not required. If a GMP was requested, each must be opened and evaluated after the required interviews and evaluation of technical and pricing proposals.

    Please note that this is intended to be a general overview for all public entities. There are additional requirements and considerations that are not listed here. Be sure to consult with legal counsel regarding these delivery methods to guide you through the procurement processes and to prepare the required legal documents (RFQ, RFP and contracts). Also, note that these statutory processes apply to most Ohio public entities, the main exception being a home rule municipality, depending upon its charter.

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