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City & County of San Francisco Awarded 2013 Owner of the Year

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With billions of dollars in public-sector construction under way, the San Francisco Bay area is an epicenter of activity for design and construction firms that build government-funded facilities. But working with public agencies can be a challenge for firms with little-to-no experience in government contracting.

Photo courtesy of San Francisco Public Works Dept.
The bond to fund the new $887.4-million San Francisco General Hospital was approved by 84% of voters.
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The San Francisco Dept. of Public Works, which oversees design and construction for numerous city agencies, has been seeking to improve and expand its relationships with the construction industry. It has adopted new measures to streamline its internal structure, open lines of communication and speed payments. DPW also is promoting building-team integration and embracing innovative techniques to meet its aggressive goals. For its efforts to innovate and change its construction program, ENR California has named the City and County of San Francisco its 2013 Owner of the Year.

City Bonding

The recession didn't spoil the public's appetite for new facilities in the Bay Area. Major projects under way include a new San Francisco General Hospital—financed by an $887.4-million bond that passed in 2008 with 84% approval—and the $164-million San Francisco Public Safety Building—funded through a $412-million bond approved by 79% of voters in 2010.

Other notable recent projects include a $96.5-million seismic upgrade to the San Francisco War Memorial Veterans Building and a cruise ship terminal project. The $70-million Phase 1 of the James R. Herman Cruise Terminal broke ground in February 2012 and was completed 11 months later. The second phase is scheduled to break ground in November and be finished in July 2014. Last year, the county opened its new $146.5-million LEED-Platinum 525 Golden Gate Public Utilities Commission Headquarters, which won an award of merit in the green category in ENR California's 2012 Best Projects Awards.

On many of these projects, the city used integrated project delivery (IPD) principles to improve coordination, solve issues early in the design phases and expedite construction schedules. Although true contractual IPD isn't possible under the city's contracting rules, DPW director, Mohammed Nuru, says the city pushes for early contractor involvement to integrate the team as soon as possible. "Bringing the contractor on early helps us clarify conflicts as the design develops and helps us get to a realistic price and schedule," he says.

Harlan Kelly, former city engineer and current general manager of the San Francisco PUC, says the city's integrated method, which it calls CM/GC, grew out of necessity. The city has had some success with design-build, but wanted a process that had early involvement and also allowed the city to retain more control. "Design-build can work well, but you need to identify exactly what you want," he says. "Once you turn it over to the design-build team and you want to change something, it becomes very expensive."

General Hospital

The city used the CM/GC approach to help tackle the complex General Hospital project, which broke ground in 2011. The nine-story hospital features a triple-pendulum base-isolated foundation system—a first for the city and an early use of the technique on a California hospital. Ron Alameida, DPW program manager, says the project is on a tight schedule to reach completion in 2015.

Webcor, San Francisco, was hired as CM/GC early in the process to provide design-assist services. Alameida says he worked within the city's administrative codes to allow Webcor to bring in key subcontractors to assist as well, which "allowed the contractor to put together a proven team with a track record of success."

Alameida says the team was able to define the scope of the project better during schematics to make sure it "sized the bond" correctly before it went to market. "We didn't have to base the bond [amount] on large assumptions," he adds. "Historically, a lot of bonds were based on less information and there was a risk that you'd end up in trouble down the line."

When the contract hit 100% construction documents, the delivery method transitioned to a more traditional style, Alameida says. Moreover, if the subs were within 5% of the cost estimate, they could continue on the project. If a bid was between 5% and 10% of the estimate, the city could decide to approve or reject a sub. If a bid was more than 10% above the estimate, the sub was rejected and its contract was opened up for traditional bid. Alameida says only one sub was not retained.

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