Staff recommends that the City Council approve a Resolution authorizing the use of an alternative project delivery method for construction of the water system projects on Billings' West End, including the raw water pipeline, water treatment plant and reservoir projects as authorized by State law at 18-2-502, MCA.

Identifying and securing an alternate source of treated water for the City of Billings is a priority to the Public Works Department.  In the current fiscal year through FY2023, the City has $126 million in funding budgeted to design and build the projects needed for the new water system on Billings’ west end.  Over the next two years, design and start of construction is planned for a new reservoir, water treatment plant, river water intake and associated pump station, and approximately 5 miles of transmission pipeline.
 
Public Works Department desires the discretion to use an alternative project delivery method for the reservoir, water treatment plant and transmission pipeline projects as authorized by State law at 18-2-502, MCA.  Alternative project delivery contracts that may be used include construction management contracts (CM), construction management general contractor (CM/GC) contracts and design build (DB) contracts. The size, interrelatedness, complexity, cost and overlapping design and construction schedules for these projects make alternative project delivery contracts more attractive than the Design/Bid/Build approach traditionally used by staff to complete construction projects.
 
The reservoir and water treatment plant projects are currently under preliminary design with HDR Engineering and Burns & McDonnell, respectively.  The pipeline project is early in the final design phase with HDR.  Both engineering firms have substantial and applicable experience with alternative project delivery.
 
Benefits of alternative project delivery contracts are that they bring a contractor, procured through an open public process, onto the project team as early as possible in design in order to take advantage of their expert contributions. Early construction tasks can proceed concurrently with design which has schedule and cost benefits.  Information is gained quickly about actual construction means, methods and materials, which leads directly to improved design accuracy and completeness.  Contractors often bring a level of cost certainty to the project before the design is complete, which informs budgets and scope on related projects still earlier in design.
 
The design/construction overlap of alternative project delivery contracts shortens the overall project schedule over the traditional straight-line design/bid/build approach.  Completing the projects sooner at projected cost savings will lead to earlier achievement of the overall goal of the west end water system projects, which is securing the benefit of an alternate source of treated water for the City at the best possible value to water customers.

City Council may:

• Approve the Resolution to use an alternative project delivery method; or
• Disapprove the Resolution for the use of an alternative project delivery method.  If the Resolution is not approved, design and construction of the west end water projects would proceed under the typical design-bid-build approach, and potentially significant cost and time advantages of an alternative approach cannot be realized.

The financial impact can not be quantified for this Council action.  The goal of using alternative project delivery will be to assess value during the process and construct the most cost effective project possible. During the construction of an alternative delivery project, the city will have opportunities for competitive bidding for materials and subcontractors through the general contractor.    

If the Resolution is approved, Requests for Qualifications (RFQs) and/or Requests for Proposals (RFPs) will be prepared, advertised through open public process and used to procure engineers and/or contractors. Once the fee from a selection committee's highest scoring engineer or contractor has been negotiated, Council will have the opportunity to review and approve or not approve an agreement.