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Alternative to low bids saved money on Edmonds school remodel

Rather than seek bids for remodeling a middle school, the Edmonds School District was allowed to hire a general contractor, which kept its project under budget.

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By Melissa Slager
Herald Writer
The Edmonds School District has $1.7 million extra to spend on capital projects, the result of significant savings in rebuilding Meadowdale Middle School.
School leaders credit in part the way the contract was handled for construction of the school, which opened in 2011 on the same campus as the old building at 6500 168th St. SW in Lynnwood.
Instead of taking the traditional design-bid-build approach, which rewards the lowest responsible bid on a design, the district received state permission to hire -- early in the process -- a general contractor to manage the project through completion.
The general contractor-construction manager method is a popular alternative for complex public works projects and one the Edmonds district would like to use more often. But public institutions seeking to use the process must have state permission, and officials still are studying its worth. So far, only certain kinds of projects are deemed suitable.
"It's the closest that we can get to operating like a business," said Ed Peters, capital projects director for the Edmonds School District, who previously worked in the private sector.
"It's not the right answer for everything. It's not the right answer for every district. ... But I would definitely like to see us move more toward the private-sector model."
A legislative report, due this month, is expected to recommend renewal of a state law that allows school districts, cities, universities, hospitals and others to use alternative contracting on complex public projects.
"I don't see contracting options for school districts changing anytime soon," said Steve Crawford of the Issaquah School District, who serves on the state committee that hears project proposals for alternative contracting for pilot projects, such as universities and hospitals. "Successful completion of those pilot projects would be necessary before any changes would filter down to school districts."
Others feel there's no need to expand the rules.
The Marysville School District used a general contractor-construction manager in building Marysville Getchell High School, which opened two years ago. The project was approved in part because of a challenging site on a steep hillside, said John Bingham, capital projects director for Marysville schools.
The project was completed early and came in $780,000 under budget.
Still, other district construction projects around the same time that used the traditional design-bid-build approach also came in on time and under budget, thanks to a work-starved construction industry.
Bingham says design-bid-build is sufficient for most projects, and he finds that it brings more certainty. "We know what the hard number is," the final cost of the project. In the construction-manager approach, "it's a little unnerving to not know what your final number will be."
Contracts that employ a general contractor as construction manager, however, do include a cap on what can be paid out, called a not-to-exceed limit.
Without using a construction manager on bigger projects such as Meadowdale Middle and Marysville's high school, advocates say, the savings seen would be harder to come by.
By being involved near the start, contractors can spot design flaws early and recommend materials based on what's available. Discussion about who pays for what during construction is productive rather than combative.
In the case of rebuilding Meadowdale Middle School, the contractor -- New Jersey-based Skanska USA Building, which has offices in Seattle -- recommended a different building shape that required a smaller footprint with the same number of classrooms. The contractor also gave cost estimates all along the way, improving the end product. And subcontractor bids came in lower than expected.
Said Peters: "We spent time solving the problems instead of arguing about whose fault it was."
Retired construction executive Phil Lovell of Edmonds said the arguments are "a problem that plagues the entire design-bid-build industry."
"I've seen it all from down in the mud in the trenches all the way up to operations manager," he said. "The design profession as a profession is busted. The designers today cannot produce a 100 percent-complete project," where everything works, fits and is available on the market.
But Lovell, who serves on the state Project Review Committee, said design-bid-build still serves a purpose. The traditional method "absolutely" still works for smaller projects, he said, especially in cases that are relatively straightforward, with no special needs or challenges.
"I get asked by other school districts who are thinking about this, whether or not they should do this," Peters said. "I always say I'm a big fan, I'm a big advocate of it. but it's not a magic bullet. There's a pretty steep learning curve. ... It doesn't run itself and doesn't necessarily save you money."
Designing and building any new school is getting more complex -- even without complicating factors -- which is why Peters and others would like to use alternative contracting more often.
"We didn't do it to save money but to get better value for the money."

What gets the nod
In general, school districts can apply to use a general contractor/construction manager process if a capital project is greater than $10 million and meets one of the following criteria:
•Implementation involves complex scheduling, phasing or coordination.
The project involves construction at an existing facility that must continue to operate during construction.
Involvement of the general contractor-construction manager is critical during the design phase.
The project encompasses a complex or technical work environment.
The project requires specialized work on a building that has historical significance.
Source: state Department of Enterprise Services

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