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I NSTITUTE FOR L EADERSHIP IN C APITAL Winter/Spring P ROJECTS 2012 F ourth A nnual L in CP F orum Plan, Fund, Select/Procure Proactive Project Planning - Three Essential Elements to Ensure Project Success Venue: Travaasa Hotel, 13500 FM 2769, Austin, Texas 78726 Room Reservations: 512-334-4649

MONDAY, APRIL 2 2:00 – 4:30 p.m. I-LinCP Annual Board and Member Meeting 5:30 – 7:30 p.m. Registration and Attendee Meet-and-Greet featuring musical duo, Phil and Debi Jones

TUESDAY, APRIL 3

C ontents

LinCP Forum Sponsors....................... 1 LinCP Forum Early-Bird Registration Closes Feb. 28............... 1 Calendar of Events............................ 2

7:30 a.m. Registration 8:30 a.m. Welcome and Keynote Keynote: Leslie Stricklan, Senior Project Manager, Travis County “Master Planning for the Travis County Central Campus Facilities to 2035”

In Focus: Public-Private Partnerships....................................... 3 Member Focus Roy Sprague, AIA................................ 4

10:00 a.m. Topic #1: Plan in Reality ISSUES AND OBJECTIVES: • Correctly scoping the project and defining the project stakeholder’s needs using the Owner’s Project Requirements process • Planning for future changes and unknowns

Leslie Stricklan

Owner-Favorable Contracts for Design Services and Construction – Part I......................... 5

CONTINUED ON PAGE 2

T hank Y ou L in CP F orum S ponsors Meet and Greet, April 2

Lunch, April 3

Door Prizes Beineke Preservation Planning & Project Management Bee Creek Photography

of

Fourth Annual LinCP Forum Program............................................. 1

PROGRAM

• How professional services and contractor involvement can assist owners in pre-project planning

T able

L in CP F orum E arly -B ird Registration Closes Feb. 28 Register Today here!

The Leadership in Capital Projects (LinCP) Forum is where the conversation begins, as the best minds in the capital projects industry gather in an intimate setting for two days of collaborative, informed discussion about the challenges facing the industry, from project planning and funding options to selecting and procuring services, and, most urgently, how we work together.

Be a part of a more robust and successful future. Join us as we re-imagine capital projects with an anticipatory mindset.

Register to reserve your seat now!

Page 1 I NSTITUTE FOR L EADERSHIP IN C APITAL P ROJECTS

C alendar of E vents Join us for a I-LinCP Social in your neighborhood - Austin, Houston, San Antonio and Dallas. We’ll have tours, networking, fun, food and learning. Enjoy a networking session using the 8-Minute Ripple!

I-LinCP Members/Guests: $20 Non-members: $25 Day-of Registration: $30

FORUM PROGRAM CONTINUED FROM PAGE 1

10:00 a.m. Topic #1: Plan in Reality (continued) PRESENTATION Severine Halls, Bill Throop, Carol Warkoczewski, Earl Swisher: “Reducing Risk - The Owner Project Requirement (OPR) Process at the University of Texas”

Appetizers and 1st Drink Included.

PANEL Severine Halls, Sr. Project Manager, UT System-OFPC; Bill Throop, Director, UT Austin-PMCS; Earl Swisher, Principal, Lawrence Group Architects; John Martin, Division President, Flintco

Spring Social - Austin

TABLE DISCUSSIONS AND GENERAL DISCUSSION/ARS

Thursday, March 1, 2012 5:15 - 8:00 p.m.

Location: Bass Concert Hall (tour included)

12:20 p.m. Lunch

Register online here.

Thank you to our Sponsor: Synergy Builders

Spring Social - Houston Thursday, May 3, 2012 5:30 - 8:00 p.m.

Location: TBD Register online here.

Summer Social - San Antonio Thursday, June 21, 2012 5:30 - 8:00 p.m.

Location: TBD Register online here.

Fall Social - Dallas Thursday, October 25, 2012 5:30 - 8:00 p.m.

Location: TBD Register online here.

East Texas Regional LinCP Forum - Houston Tuesday, August 28, 2012 Meet-and-Greet, 5:30 p.m.

Wednesday, August 29, 2012 Full-day Conference Location: TBD Join collaborative discussions to share information, explore challenges and seek solutions with owners, architects, engineers, planners, contractors, program managers, and others working with capital projects.

Details to be announced. Sponsorship opportunities will be available.

For more event information including sponsorship opportunities, please visit www.i-lincp.org.

1:45 p.m. Topic #2: Funding Options ISSUES AND OBJECTIVES • • • •

Understanding the funding process and how decisions are made The public bonds process Public-private partnerships - legalities/limitations for public entities in Texas; lessons learned Bonds vs. PPP vs. other sources

PRESENTATION Pix Howell, Urban Design Officer, City of Leander: “Development and Funding of a Greenfield Transit Oriented Development” PANEL Pix Howell, Urban Design Officer, City of Leander; Rodney Moss, Division Senior Vice President and Division Chief Legal Officer, Balfour Beatty TABLE DISCUSSIONS AND GENERAL DISCUSSION/ARS 4:10 p.m. Day’s Recap (ARS responses) 4:30 p.m. Optional Afternoon Activities 5:30 p.m. Reception featuring music by the acoustic vocal trio, VOYCES

WEDNESDAY, APRIL 4 7:30 a.m. Registration 8:30 a.m. Welcome and Keynote Keynote: Mick Cornett, Mayor, Oklahoma City, “MAPPING Oklahoma City’s Future” 10:00 a.m. Topic #3: Selecting and Procuring Services ISSUES AND OBJECTIVES • Ethics and fairness in RFQ/RFPs • Selection process • What is lawful, rational, and reasonable • Use of resources: time, effort, and money • Collaborative and IPD-ish agreements

Mick Cornett PRESENTATION Rob Roy Parnell, Associate Vice Chancellor for Facilities, Texas State University System: “Creative and Effective Project Procurement in State Government” PANEL Rob Roy Parnell; Denise Cheney, Bickerstaff Heath Delgado Acosta, LLP; Travis Brown, Partner, Allensworth Porter TABLE DISCUSSIONS AND GENERAL DISCUSSION/ARS 12:30 p.m. Lunch James D. Smith, “Using Conscious Competence for a High Performance Organization” 2:00 p.m. Discussion Integration of Ideas through “World Café” 4:00 p.m. Closing

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I n F ocus : P ublic -P rivate P artnerships American Style P3

State Accepting Proposals for P3 Projects

by Brien Desilets

by Laylan Copelin

The Institute for Public-Private Partnerships (IP3) reports that despite the worst financial crisis in generations, the US has seen major transportation P3 deals close. These deals represent investment in new infrastructure with large amounts of construction during initial project years. What’s more, these deals show that P3 is here to stay and that it is gaining ground. These are not oneoff projects with obscure characteristics. These projects are targeted at basic infrastructure for metropolitan areas. They build on previous trends in project delivery such as design-build and represent an evolution in procurement and project financing.

For the complete article courtesy of IP3, click here.

The Austin American Statesman reports that the State of Texas has hung a “Partners Wanted” sign on its vast amount of public property. It is a message to developers and contractors that the state — land-rich but cash-strapped — will accept unsolicited proposals for public-private partnerships to construct and operate a wide array of facilities from offices to power generation sites to medical buildings. P3 Projects may help to stretch the budgets of government projects without raising taxes.

For the complete article courtesy of the Austin American Statesman, click here. Access the Public-Private Partnership Guidelines and the Facilities Master Plan Report here.

T hank Y ou

to our

N onprofit /G overnmental

and

C orporate M embers

Nonprofit/Governmental Cypress-Fairbanks ISD • Sam Houston State University Physical Plant • Southwestern University • Texas A&M University • Texas State University System • University of Houston Facilities Planning & Construction • University of North Texas

Corporate E&C Engineers & Consultants • Hunt Construction Group • Skanska • SpawGlass • TDIndustries • Clark Condon Associates • Flintco • Haynes Whaley Associates • Kiewit Building Group • Kirksey Architecture • Lackey de Carvajal Cx • Lee Lewis Construction • Linbeck • PageSoutherlandPage • Rose Rock

Please support the businesses that support us!

Page 3 I NSTITUTE FOR L EADERSHIP IN C APITAL P ROJECTS

I-L in CP M ember F ocus Roy J. Sprague, AIA, CSI, REFP Assistant Superintendent of Facilities & Construction Cypress-Fairbanks ISD I-LinCP Founder and Executive Director, Carol Warkoczewski, AIA, MSOLE interviewed new board member, Roy Sprague about his experience at Cypress-Fairbanks ISD, his advice for professional services and contractors working collaboratively on public projects, and industry goals that I-LinCP members can advance.

CW: We are very happy to welcome you as a new Board member to I-LinCP! CypressFairbanks ISD is in the Houston area. How many schools are in the CFISD portfolio?

Are there also some other types of facilities that are owned/operated by CFISD? RS: We have a total of 84 campuses along with numerous support facilities that total over 15.5 million square feet. These facilities include four transportation centers, two day care facilities, instruction support center, maintenance/operation center, food production center, recycling center, and a distribution/warehouse center. We also designed and constructed the Berry Center that opened in 2006, which serves as an educational support center that contains a 9,800-seat arena, a 16,000-SF conference center with banquet and food service facilities, a 450-seat auditorium, an 11,000-seat stadium, and administration office spaces. The Berry Center is a very unique facility that is one of the first of its kind in the K-12 educational facilities market which serves our students and community in many different ways. When the facility is not being utilized for educational programs, the district rents the facility out to defray the operating cost of the facility for such events as basketball tournaments, band programs, trade shows, weddings, banquets, and various other functions. We can conduct our own high school graduations at the arena thereby saving our district hundreds of thousands of dollars annually.

CW: In your many years of project planning and delivery, what are a couple of key stumbling blocks that you see on projects that may be due to professional services or contractor performance?

RS: The biggest key stumbling blocks that occur on projects are effective communications; failure to listen to the owner; and a lack of understanding of the needs and expectations of the owner.

Everyone believes they are very effective communicators, but the team can always improve. I certainly believe that technology has enhanced our project planning and delivery methods, however, the teams have lost the ability to truly communicate effectively face to face.

Instead, everyone wants to communicate using emails and text messages. We have truly lost the art of having meaningful conversations.

CW: What key advice would you give to A/E firms who would like to work on CFISD projects?

BR: Our district has very high expectations of our service providers for design and engineering services. It is very important to understand that we demand and expect excellence on our projects. It is truly critical that A/E firms engage quickly to learn how we operate and understand our goals and project expectations. We are a public entity and we do not have the luxury of making mistakes on projects since we are responsible for effectively spending taxpayer dollars. We must deliver a quality product that must serve our community for many years. The whole purpose of our existence is to provide a high quality learning environment that will improve student achievement and success. We are in the business of educating over 108,000 students and the facilities we design, construct, and operate must support the ability to deliver quality education to these students in the most cost efficient and effective way possible.

CW: What key advice would you give to contractors who would like to work on CFISD projects?

RS: We expect our contractors to deliver a high quality facility under budget and on time that is well constructed with minimal or no warranty problems. The best

advice I can give to contractors is that we expect them to honor and fulfill their contractual obligations. My department is responsible for ensuring that contractors providing construction services deliver a quality project and meet the contractual obligations they agreed to when they executed their contract with the district. We demand a lot from our contractors because we only have one chance to build a facility correctly so the students we serve and who occupy our facilities will be successful in their learning careers while attending CFISD schools. A building with construction quality problems and defects does not provide a very conducive environment for our teachers and students.

CW: Now, as you look into 2012-2013, what would be one or two CFISD or industry goals that you think the I-LinCP organization could help advance?

RS: I believe that I-LinCP could continue to help improve and advance the collaborative process required by all entities involved in the design and construction process to deliver successful capital programs for owners like CFISD. I-LinCP is a very collaborative organization that has brought private and public owners, architects, engineers, contractors and other industry partners together in a very non-threatening, collaborative environment so that capital programs can truly be successful. It takes all parties working together to achieve successful project completion and I-LinCP is a wonderful opportunity for everyone to learn from each other and communicate more effectively to better understand the needs and challenges facing each other. Only then, can a capital program be truly successful!

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Owner-Favorable Contracts For Design Services And Construction – Part I

by Randall R. Reaves, AIA, Esq.

A

n owner contemplating the construction of a new facility may be surprised to learn that the Owner is often the least protected of all the parties in many of the so-called standard contracts (such as those written by the American Institute of Architects) for architectural services and construction. A strong contract for the owner will clarify for all parties exactly what the rights, obligations, and expectations are for the owner, architect, and contractor. A strong contract will serve as a useful tool to prevent disputes later, and as a method of resolving those disputes when they arise. Although owners are often inclined to begin a business relationship on a friendly basis by avoiding confrontation, a robust negotiation of contract terms at the outset, led by an expert consultant or an attorney, will yield many benefits in keeping the project on track. A good contract need not be about unfairly shifting risk to the other party, but should be about spelling out all the details to avoid future misunderstandings and conflicts.

Part I of this article takes a look at contracting with architects.

After developing a detailed facility program, the owner will usually be ready to contract with an architect (or engineer) for the design of the facility. The Architect will want to limit its liability for errors and omissions, to avoid being too tied to strict definitions of performance and time, and to have an unfettered right to payment. Most complaints from owners about their contracts with architects involve misunderstandings about deliverables, the right of the architect to fees for additional services, use of the drawings, and project cost overruns.

Following are some of the major issues which should be addressed in forming a contract with an architect along with suggested approaches.

Responsibilities of the Parties • Many contracts will permit the architect to rely completely on information provided by the owner (or owner’s consultants). This can lead to errors in the work. To avoid misunderstanding, require the architect to notify the owner in writing if any such informa-

tion is unsuitable, improper or inaccurate, and, most importantly, prevent the architect from proceeding unless the owner confirms in writing how it wishes the architect to proceed.

• Many printed form contracts prevent the owner from changing its project budget, and require the owner to name a representative with complete decision-making authority. These requirements are often incompatible with the structure of governance for many owners. Specify limitations on the authority of individuals, including the specific dollar amount authority given to specific employees and officers, and including which decisions will have to be referred to an institution or organization’s board.

• The AIA contracts give the architect certain rights with respect to the owner’s legal, insurance, and accounting needs and services. The owner will normally not want to agree with a third party (the architect in this case) about such services.

The Architect The “standard of care” is the legal standard to which the architect will be held if the architect is accused of negligence in the performance of its duties. The

AIA contract will include the most basic standard.

• If you have hired the architect because of its special skills or the special nature of the project, consider requiring a higher standard of care. Also make sure that the contract requires the architect’s services and designs to be “in accordance with all applicable laws, codes, and regulations.”

• Include detailed lists of requirements for each phase of the architect’s services (schematic design, design development, construction documents, bidding and negotiation, and construction administration). For example, specify the scale of all of the drawings, at what point outline specs are developed, requirements for sections and elevations, what types of engineering services are included, and presentations before community groups.

• For any significant project, always require errors and omissions (professional malpractice) insurance from the architect.

Drawings and Specifications Many owners are surprised to learn that

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CONTRACTS CONTINUED FROM PAGE 5 they do not own the drawings. When an architect is terminated, the owner may not have the right to use the drawings to finish the project until the owner complies with the architect’s payment and other demands under the contract, even when the right to some payments is in dispute. Under the AIA contract, terminating the contract can actually terminate the owner’s right to use the drawings.

• The owner should have the right to use the drawings and specs unless it is in default under the agreement in the payment of an undisputed amount.

It is essential that the owner have the right to hire a substitute architect (without an adjudicated default by the architect) with the substitute architect having the right to use the drawings and specs to finish the project.

• It is perfectly legitimate to negotiate a provision which gives ownership of the drawings and specs to the owner.

Changes in Services An architect’s fees can significantly increase through claims from the architect that it is due additional compensation under the contract or by custom. Avoid later confusion by prohibiting increases in compensation for: • “official interpretations” such as those by building officials. Require the architect to meet all codes and regulations, including interpretations enforced by field inspectors.

• a change in procurement method, such as from a hard bid to a negotiated price with the contractor.

• failure of performance by the contractor, unless additional services are required by the architect to re-bid

or re-negotiate the contract, or the original time frame is substantially exceeded.

• any work performed by the architect for which a signed, written detailed approval is not obtained in advance from the owner.

Payments Owners are often dismayed to learn that the architect is due a payment even when such payment puts the owner’s position in jeopardy. Depending on the circumstance, the owner should be able to withhold a payment completely, or a portion of a payment needed to cover the problem. Contract with the architect to give the owner the right to withhold payment when: • the architect is in breach or default under the contract.

• any part of such payment is attributable to services which were not performed in accordance with the contract.

• the architect has failed to make payments promptly to its consultants for services for which the owner has already paid the architect.

• the owner has paid the architect for more of its services than have actually been completed. For example, when the owner has paid the architect 75 percent of its fee allocated for preparing the drawings, but the drawings are only 50 percent complete.

Project Budgeting The best course of action is to require a real cost estimate (rather than mere opinions) from the architect if a thirdparty consultant has not been engaged specifically for that purpose. Consider requiring the architect to employ and pay a recognized and specialized company,

acceptable to the owner, to prepare detailed construction cost estimates of the construction project, in a form acceptable to the owner, following the Construction Specifications Institute (CSI) format. The estimates are submitted with plans and specifications when submitted for review at the completion of the Design Development phase and at various stages of completion of the construction documents. The owner has little recourse with the architect for contractor prices which exceed the budget unless interim cost estimates are obtained and the contract requires corrective action from the architect.

• If a construction cost estimate at the end of design development or construction documents indicate a cost which exceeds the budget, then require the architect to revise the project scope or quality to lower the cost below the owner’s budget without an increase in fee.

Conclusion By following the simple contracting guidelines above, and by seeking the advice of an expert consultant or attorney to negotiate and draft actual contract terms, an owner can do much to ensure a smoother relationship with its architect, and to avoid unnecessary expense and delay. In Part II of this article, we will look at how the owner can protect itself during the construction process with a thoughtful choice of contract terms and general conditions for use with a contractor or construction manager.

This article is provided for informational, educational, and discussion purposes only and should never substitute for competent legal advice for a specific project or contract.

I NSTITUTE FOR L EADERSHIP IN C APITAL P ROJECTS

Our Mission

Evolve the capital projects industry through sharing of knowledge for optimized leadership, delivery, and performance.

Board of Directors John Alvarez, Jeff Bryson, Matt Daniel, Bob Farmer, Marie Hoke, Luma Jaffar, Richard Jennings, Mike Lackey, Spencer Moore, Denise Neu, Mark Pearce, Rob Roy Parnell, Randall Reaves, Bob Richards, Roy Sprague, Carol Warkoczewski (Board Chair and Executive Director)

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