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Policies and Procedures

Finance & Administration

4-OP-B-14 Administration of Design Build Agreements

Responsible Division:

Vice President for Finance and Administration

Approving Official:

Vice President for Finance and Administration

Effective Date:

April 8, 2019

Last Revision Date:

New Policy

 

I. INTRODUCTION

To establish procedures for the administration of Design-Build Agreements, including negotiation, contracting and payments.

II. POLICY 

This document describes contract administration procedures for Design-Build Agreements, including use of a Design Criteria Consultant; negotiations for design fees, preconstruction services, and development of a Guaranteed Maximum Price; Amendments and Change Orders; approval of Pay Requests; Design Builder Self-Performance; Subcontractor Pre-qualification; and Bidding.

A. DESIGN CRITERIA

Design Criteria Package A Design Criteria Package or Facility Program will be developed to furnish sufficient information to permit Design-Build firms to prepare a response to a proposal request by Facilities. The Design Criteria Package will specify both quantitative and performance-based criteria for the project, including a full site description, interior space requirements, material quality standards, schematic layouts and conceptual design criteria of the project, budget estimates, design and construction schedules, site development requirements, provisions for utilities, stormwater retention and disposal, and parking requirements. Design Criteria Professional The Design Criteria Package will be prepared and, if required, may be signed/sealed by a design professional who holds a current certificate of registration as an Architect, Landscape Architect, or Engineer. The Design Criteria Professional may be employed by FSU or may be selected to provide services pursuant to F.S. 287.055. The Design Criteria Professional shall not be eligible to render services as part of the Design-Build contract executed pursuant to the Design Criteria Package.

B. SELECTION OF A DESIGN BUILD ENTITY

A Design-Build firm shall be selected utilizing a qualifications based selection as outlined in Florida State University Policy 4-OP-B-12, and the selection committee shall include one member whose role is to ensure that the requirements defined in the Design Criteria Package are considered in the selection. The Design-Build firm shall be a partnership, corporation, or other legal entity that is certified under F.S. 489.119 to engage in contracting; or is certified under F.S. 471.023 to practice engineering; or is certified under F.S. 481.219 to practice architecture.

C. SCOPE OF SERVICES

The selected Design-Build firm will provide design, pre-construction services, a guaranteed maximum price (GMP) and completion schedule for work to be completed pursuant to the Design Criteria Package. If the GMP is accepted by the University, the Design-Build firm will construct the project utilizing subcontracted trades competitively bid and managed by the Design-Build firm. The Design-Build firm will be responsible for the project’s compliance with all statutory, code and regulatory requirements, testing and inspections, and other project costs for a fully functional project as described by the Design Criteria Package.

D. DESIGN BUILD AGREEMENT

1. Negotiation of Fees for Services and Establishment of Billable Rates

(a) Negotiation

FDC representatives meet with the Design-Builder to negotiate the design and pre-construction fees for the project. If negotiations with the top ranked firm are unsuccessful, negotiations with that firm may be terminated and commenced with the second ranked firm. If negotiations are unsuccessful with the second ranked firm are unsuccessful, the negotiations with that firm may be terminated and negotiations begun with the third ranked firm. If negotiations are unsuccessful with the third ranked firm, the negotiations with that firm may be terminated and additional firms from the original pool may be selected or the project may be re-advertised. Negotiations may be terminated entirely at any time during the negotiations process.

(b) Design Fees

Fees for design services shall be determined utilizing the University’s accepted fee curve with consideration given to project complexity. Alternately, fees may be determined based upon negotiated hourly rates and an agreed number of hours required to accomplish the task(s).

(c) Pre-construction Fees

Fees for pre-construction services shall be determined based upon negotiated hourly rates and utilizing the current University multiplier form. Multipliers shall be submitted for each individual team member and attested per University procedure prior to fee acceptance. The billable rate shall be the actual rate paid to the employee, including verifiable paid benefits. The billable rate shall be independently attested per University requirements. The total fee for preconstruction services shall be the lump sum amount of agreed team member hours multiplied by their respective attested rate(s).

2. Execution of Agreement

Upon completion of successful negotiations, FDC prepares the Agreement and transmits to University General Counsel for approval. After approval, the Agreement is forwarded electronically to the Design-Builder and the University President for execution and final distribution. An electronic file is created in the University’s project management system. Related documents are attached, including: a copy of the DB fee proposal and any initial additional services, a copy of all licenses, insurance certificates, negotiation forms, the executed Agreement, and any other documents substantiating the negotiation.

E. DESIGN SERVICES

Design services shall include architectural, civil, structural, mechanical and electrical engineering, as well as services of any special consultants included on the Project Team or as required by the Design/Build Services Qualifications Supplement. All design professionals shall hold valid State of Florida licenses in their discipline at the time of selection. The Design-Builder shall prepare and submit design documents to Facilities Design & Construction as required for approval by FSU Facilities. The Design-Builder may be requested to submit a threshold inspection plan or life cycle cost analysis discussing energy-saving schemes. Upon approval of the design, construction documents shall be developed.

F. PRECONSTRUCTION SERVICES

The Design-Builder shall provide all required preconstruction services, including cost estimating, value-engineering, drawing and constructability reviews, scheduling, and development of a Guaranteed Maximum Price (GMP) at risk based upon 100% Construction Documents.

1. Guaranteed Maximum Price

At the completion of 100% Construction Documents, the Design-Builder shall prepare a GMP proposal in accordance with the “Guidelines for the Preparation of Guaranteed Maximum Price Proposals” (see forms section).

2. Construction Costs and Acceptance

Costs proposed in the GMP shall include estimated costs of the trade work, general conditions costs, the cost to provide supervision and on site management, and the agreed overhead and profit (%). The construction cost shall include an agreed percentage for contingency to be used for line item overruns and unforeseen conditions. Savings in all negotiated lines shall revert to the University and be deducted via Change Order at project completion.

3. Management Fees and Attested Rates

The Design-Builder’s fee for the management of the project construction shall be proposed as a direct expense based upon actual billable and attested rates as documented by the University’s “Construction Manager/Design Builder Multiplier Template” (see forms section). Any changes to the project team or billable rates must be approved by the FDC Project Manager prior to implementation.

4. Overhead and Profit

The Design-Builder’s profit percentage will be negotiated by FDC and will consider the size, complexity, schedule, and other factors specific to the Project.

5. Amendment

If accepted, the FD&C verifies funds availability and prepares an amendment to the Agreement accepting the GMP, with any revisions. The Amendment is executed by all parties to the Agreement. Upon receipt of executed bonds and insurance certificates, a Notice to Proceed with Construction is issued. If the GMP proposal is unacceptable, the FDC shall meet with the Design-Builder and attempt to resolve proposal concerns. If the proposal continues to be unacceptable, the FDC, at its sole discretion, may terminate the discussions and proceed to construct the project utilizing another party or may terminate the project.

G. CONSTRUCTION SERVICES

Upon acceptance of the GMP, the Design-Builder shall provide construction services, including bid/negotiate the subcontracts, on-site supervision and construction site management, schedule development and coordination, materials procurement, track and expedite submittals and shop drawings, direct on site safety measures, and provide information services to Facilities Design & Construction. The Design-Builder may be asked to participate in the University’s Direct Purchase Materials program.

1. Bidding or Negotiations of Subcontracts

Unless self-performance is specifically authorized by Facilities Design & Construction, the Design-Builder shall make recommendations for pre-qualification requirements of the subcontracts and shall bid, negotiate, and manage the trade work. Procedures for bidding, negotiating, award and management of the subcontracts shall be as per those in Florida State University Policy 4-OP-B-11-D2, Administration of Construction Manager Agreements, and shall comply with University requirements for purchasing thresholds relating to advertisement and bidding. The Design-Builder shall hold pre-bid meetings and require that the Design Consultant be in attendance. Receipt of bids shall be in accordance with bidding procedures outlined in Florida State University Policy 10P-B-11-B.

2. Design Consultant’s Services During Construction Phase

The Design-Builder’s Design Consultant shall provide construction phase services commencing with the University’s acceptance of the GMP. The Design Consultant’s services shall include assistance with the filing of documents required for governmental authorities having jurisdiction over the Project. The design consultant shall make on-site inspections to ensure that the construction is completed in accordance with the Contract Documents and free from defects and deficiencies in the work. The Design Consultant shall review the Design-Builder’s Applications for Payment and certify the amounts due.

H. CONSTRUCTION REVIEW ARCHITECT

Facilities Design & Construction may elect to employ an independent Construction Review Architect for the purposes of ensuring that the Project meets the Owner’s requirements. The Construction Review Architect shall be employed via a contract separate from the Design-Builder and shall be selected consistent with competitive selection requirements in F.S. 287.055. The Construction Review Architect may be selected from the pool of current continuing services contracts administered by FDC. The role of the Construction Review Architect is to act on the Owner’s behalf, providing on-site observation and reports, certification of completion in accordance with the CD’s, interpret and decide matters for the Owner, approve Payment Applications, certify Substantial Completion, and assist in the resolution of claims or disputes. The role of the Construction Review Architect may be further defined if required by the specific project.

I. ADDITIONAL SERVICES

Any services which are not authorized by the original Agreement must be authorized in writing by means of an Additional Service Authorization prior to commencement of the services by the Design Consultant. Additional services shall be authorized consistent with procedures in Florida State University Policy 4-OP-B-11-D1.

J. CHANGES TO CONSTRUCTION COSTS

All proposed changes shall be recommended for approval before submission to the FDC by the Design Consultant and the Construction Review Architect. These may include Change Orders, Change Directives, and Contingency Modifications and shall be approved consistent with procedures in Florida State University Policies 4-OP-B-11-E and 4-OP-B-11-D2. Changes to construction costs must be supported by bids or by unit prices established in original bids. The Design-Builder’s markup on a Change Order will be limited to the percentage of profit approved in the original GMP. All changes to project costs must be approved by FDC prior to implementation.

K. PAYMENTS TO THE DESIGN BUILDER

Payments for services performed during the design phase and the pre-construction phase shall be payable as a lump sum upon satisfactory completion and submission of the phase deliverables and submittal of an electronic invoice. Payments to the DB team for professional services are not subject to the withholding of retainage.

Certificates of payment for partial project completion during construction shall be submitted electronically on standard University forms to the Facilities Design and Construction Project Administration email for review and approval.

All design invoices and construction payment applications shall be submitted in accordance with “Invoicing Procedures” in Florida State University Policy 4-OP-B-11-D2 and shall include sufficient back up documentation to evaluate the work completed during the pay period.

L. INSURANCE AND BONDS

Professional liability insurance shall be provided as required in the amount(s) listed in the Project Advertisement and Project Fact Sheet. In addition, the Design-Build firm shall hold Worker’s Compensation Insurance, General Liability, and other insurances as required by Florida law or in the amounts indicated in the construction documents, if no other requirement exists. For those projects whose construction costs exceed $200,000.00, the Design-Builder shall provide recorded payment and performance bonds for 100% of the value of the construction.

For projects whose construction value exceeds $100,000.00 but does not exceed $200,000.00, FDC may elect to forego a requirement for payment and performance bonding. For projects whose construction costs are less than $100,000.00, no payment or performance bonds are required. An Insurance Consultant may be utilized for review of insurance documents. If no consultant is providing services, FDC will review the insurance and bonds for compliance with the specifications.

M. OFFSITE STORED MATERIALS

When the Design-Builder submits a request for payment for offsite stored materials, a University Offsite Stored Materials Agreement shall be executed, and insurances, documentation and all other requirements of 4-OP-B-11-D2 shall be in effect. N. ANNUAL EVALUATION The performance of Design-Build firms under contract will be evaluated annually.

III. LEGAL SUPPORT, JUSTIFICATION, AND REVIEW OF THIS POLICY

F.S. 287.055,1013.45