The costs of replacing water treatment infrastructure are exceeding the means of many communities. Collaborative delivery models such as progressive design-build, construction manager-at-risk (CMAR) or construction manager-general contractor (CM-GC) are emerging as the best options available to keep these costs in check through the design process.
Nothing illustrates this better than a look at the design-build process being followed by the City of Wichita, Kansas, as it moves toward completion of its new 120 million-gallon-per-day Northwest Wichita Water Facility (NWWF). It is a nearly half-billion-dollar capital investment that will create multiple community benefits for decades to come.
Starting at Square One
In May 2018, Wichita city officials hired Burns & McDonnell for a study to evaluate the current water treatment facilities. We confirmed that the city’s existing 80-year-old treatment plant was at the end of its design life and that a new facility was needed.
As part of the study, we began preliminary engineering to identify the different process elements that would be required. This work accounted for approximately 5% of the total engineering that would be required and established a preliminary, but firm, $524 million budget for the new facility.
Later in 2018, the city conducted a formal procurement process, concluding in February 2019 with selection of Wichita Water Partners as its design-build contractor. As a joint venture partnership of Burns & McDonnell and Alberici Construction, the JV also included Wichita-based subcontractors and subconsultants, including minority and diverse business enterprise (MBE/DBE) partners.
However, the longer-than-expected procurement process had left an extremely compressed timeline to meet an Oct. 31, 2019, deadline to apply for funding available under the Water Infrastructure Financing and Innovation Act (WIFIA).
A key requirement of the WIFIA program is that engineering design must be at least 30% complete in order for the loan application to be considered. This required a full-court press to get engineering design to a level that met the capital cost budget requirements and allowed for an accurate construction cost estimate. This estimate had to be supported by an affordable rate structure.
Had we pursued conventional delivery models, it is unlikely we would have met the application deadline. This would have added several years to the process, pushing the WIFEA application process out by several more.
Mitigating Risk
With the team facing a compressed time frame to meet the 30% design criteria, as well as meeting the initial $524 million pricing cap, collaboration and creativity were a must. The joint venture’s design and construction partners worked closely with city representatives in structured weekly workshops to review design features and complete concurrent constructability reviews. As concepts were modified in these reviews, pricing of components and materials were developed “live,” enabling the team to maintain an accurate real-time view of current costs as ideas and concepts were explored and modified in an open and transparent cost process.
This was unlike a conventional design-bid-build (DBB) project delivery process. Though still widely utilized, DBB can increase the risks of not meeting owner budgetary constraints. It also is likely to reduce opportunities for early cost certainty and increases time of delivery if redesign and rebidding are required.
With the NWWF project, constructability reviews were a collaborative effort between city staff and a cohesive JV design-build team, notably including local contractors Wildcat, UCI and Dondlinger.
Value Engineering Delivers Savings
The goal of the JV team was to verify significant elements as early as possible. This kept design costs in check while meeting a goal of redundancy and resiliency in the new facility. In addition to the capital cost budgetary limit, the design-to-budget process also considered ease and flexibility for operations and maintenance (O&M), demonstrating approximately 24% annual savings to the baseline O&M budget. This iterative, self-correcting give-and-take resulted in innovations that ultimately reduced the project cost to $494.2 million plus additional owner allowances that resulted in savings of $14 million below the owner’s original budget.
One of the cost savings ideas revolved around revising the original facility layout. Initially, the NWWF was to occupy a noncontiguous footprint in a campus-style setting. However, early in project development, the team evaluated the possibility of consolidating the plant footprint. This idea became feasible when an adjacent 5-acre tract was acquired, providing enough land to consolidate all plant operations on a single site. Nearly $10 million in cost savings were realized by incorporating new designs for common-wall construction as well as reduced piping and electrical runs. The more efficient plant setup also will result in significant O&M savings over the coming years.
A second major cost savings was realized when the team located a network of unused transmission pipe already in place within the city’s piping assets. The older pipe had been intended to add redundancy across various parts of the city’s system, but some sections had not been utilized for years. It could now be repurposed to offset the need for costly construction of significant sections of a new transmission main. This enabled the team to reduce construction costs by an additional $20 million, after assessing where new connections could tie in. Those savings will now be redirected toward enhancements to treatment processes and added redundancy in the plant.
A third significant savings feature involved incorporating solids contact clarifiers for front-end processing instead of a conventional flocculation and sedimentation basin. The solids contact clarifier combines mixing, flocculation and sedimentation processes in a single tank and processes solids more efficiently than traditional floc/sed basins under certain conditions. This modification saved the city an additional $6 million in construction costs.
Pricing Process Protects City Ratepayers
The transparent, open-book process reduced risk of unexpected cost overruns, protecting both the city and the JV, and allowed the team to reduce contingency reserves in the overall contract price.
Contingency reserves are commonly used as a mechanism to offset unexpected costs, and under the lump sum contract structure the JV contractor team would be responsible for project cost overruns over the agreed contingency amount. However, as project development proceeded and costs were verified, uncertainty and risks from unforeseen events have been greatly reduced. This was due in large part to the ongoing close collaboration between the city and all contract partners. The early design development allowed the team to secure firm pricing for many commodities and materials, reducing uncertainty during later stages of construction. With these risks greatly mitigated, the JV team was able to reduce the allocated contingency.
Best Value Achieved
The City of Wichita is gaining true best value for a treatment facility that will exceed many of the national standards for water quality, thanks to a process that will also save millions of dollars for water customers over the coming decades.
None of this would have been possible without the trust established by a highly collaborative, transparent process that allowed key project elements to be locked in at very early stages of the design.
Multiple studies confirm that design-build delivers a wide range of benefits over other project management methods.
