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listen. think. deliver.
CMAA Water SummitCMAA Water SummitService Provider Executives ForumService Provider Executives Forum
July 19, 2010
Richard D. Fox
Chairman & Chief Executive Officer
Camp Dresser & McKee Inc.
listen. think. deliver.
Infr
astr
uct
ure
Inve
stm
ent
($ b
illi
ons)
WaterWater
ResourceWastewater
Underfunded Investment Is Clear But No Obvious Way
Forward
“More for Less”
(Nee
ded
)
(Nee
ded
)
(Nee
ded
)
(Act
ual
)
(Act
ual
)
(Act
ual
)
listen. think. deliver.
OpportunitiesOpportunities
Improving the Delivery of Assets
Better policies / regulations More sustainable infrastructure Technology advancement
Raising the Value of Water
listen. think. deliver.
Productivity of US construction versus Productivity of US construction versus productivity gain in non-farm industriesproductivity gain in non-farm industries
Source: US Department of Labor
1964 70 75 80 85 90 95 00
listen. think. deliver.
Why?Why?
MasterPlan
InvestmentPhase Design Bid Construct
Design-Bid-Build (D-B-B)
Commission Operate/Maintain
listen. think. deliver.
Service Provider OpportunityService Provider Opportunity
MasterPlan
InvestmentPhase Design Bid Construct
Design-Bid-Build (D-B-B)
Commission Operate/Maintain
Lev
el o
f In
vest
men
t
1 – 5 years 7 – 9 years 20 – 30 years
listen. think. deliver.
Seizing the OpportunitySeizing the Opportunity
Gain Productivity:• Eliminate interfaces• Lower LOE• Reduce re-work• Reduce schedule• Reduce change orders
Improve Owner Comfort:• Visualization• Transparency
Rationale Risk Transfer:• Procurement process• Knowledgeable advisor• Co-sponsored risk register
Collaborative 4-D Design
listen. think. deliver.
Owner ComfortOwner Comfort
Rehab Consistency Aesthetics/
Noise/Odor
High levels ofdesign control
Traditional design build
≠
EPCM
Procure 65 % Design Negotiate Construct/Commission
– – –
listen. think. deliver.
TransparencyTransparency
Procure Design / Construct / Commission
D-BCompetitive Price / 10% Design Escalation
Change Orders
D-B-B Criteria/Price MarketCompetitivePrice
ChangeOrders Criteria/Price
Construction Manager
Select Designer Design Bid Construct Commission
EPCM
Procure 65 % Design Negotiate Construct/Commission
Target Price
Criteria/Design
Firm Price
Sub-bids
listen. think. deliver.
Risk TransferRisk Transfer
General Liability Insurance 0.1% - 0.2%
Errors/Omissions Professional Liability 0.1% - 0.3%
Worker Injury Workman’s Compensation 0.1% -
3.0% Contractor Payment Bonds 0.5% - 1.0%
Contractor Performance-Schedule Liquidated Damages 0% -
10% -Overall Contractual Transfer
0% - 7% Force Majuere Contract Exclusion 0% - 0%
Facilities Performance Contract Transfer (warranty) 0% - 3%
Limits on Liability Contractual Terms Erratic/Exorbitant
Consequentials Contractual TermsErratic/Exorbitant
RISKS MEANS/METHODS PRICING
listen. think. deliver.
4-D Design4-D Design
listen. think. deliver.
Orlando DB CenterOrlando DB Center
listen. think. deliver.
SummarySummary
Global forces demand “More For Less” Productivity of traditional delivery Design Control = Modified D/B or EPCM Transparency
– A real, client specific issue
– Discuss it / manage it
Risk Transfer – Rationale – Fair Pricing
– Full – Exorbitant Pricing/No Responsible players
