event breakout Jeremy Landry

							What’ll you give me for a dollar?



      Innovative Fixed Priced Paving
                 Contract
       Jeremy Landry,
        Senior Analyst
  Contract Innovations Office

Ministry of Transportation
          Alternative Contracting

          A Collaborative Approach


       Jeremy Landry,
        Senior Analyst
  Contract Innovations Office

Ministry of Transportation
MTO – Contract Delivery
Engineering and Planning / Design
   Approximately 95% of Engineering and Design is delivered
         externally by consultants
        Approximately 350 assignments / year; for e.g. planning and
         design, construction contract administration, area testing
         labs, bridge inspections, etc.

Construction
   All construction is delivered by external contractors
   Approximately 450 contracts / year to contractors; about 150
         major capital (major repair or expansion contracts), and
         about 300 minor capital (e.g. crack and seal, small
         resurfacing contracts)
        Robust pre-qualification system (no bonding)


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MTO - Strategic Directions

1. A provincial expansion plan developed in collaboration with
   Policy & Planning Division.
2. A strengthened policy capability to influence ministry and
   government activities in support of division initiatives.
3. A workforce that is poised to meet our changing business
   directions.
4. The greenest roads in North America.
5. A quarter of our business delivered in innovative and
   improved ways.
6. Seventy-five cents of every construction dollar spent directly on
   pavements and bridges.
7. In collaboration with industry, develop performance-based
   specifications for all contracts.


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Innovative Contract Delivery




 Provides leadership, coordination and project management to
   develop and implement innovative contract delivery and
   associated oversight methods




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Innovative Contract Delivery
                   Contract Delivery Model Toolbox

 Development of “Ready to Use” contracts and associated
  oversight models
    Ideas from within MTO
    Jurisdictional scans
    Collaboration with Industry

 Work closely with Regions
   Model selection
   Contract development
   Tender, award
   Implement oversight regime
   Training

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Innovative Contract Delivery
               Why Invest in Alternative Delivery?

 Size of program
 Lack of resources
 Technology
 Remain a Knowledgeable Owner
 Move to performance-based contracting

Significant change in the organizational culture required…

“I’ll be happy to give you innovative thinking but what are the guidelines?”




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Contract Models

         “What’ll you give me for a dollar?”
                    Fixed Price Paving Contracts
                        (How far can you pave for X $’s)




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Fixed Price Paving

Contract Model Characteristics
 The contractor bids a lump sum or by square metre to carry out
   the work
     May include: traffic control, shouldering, milling, guiderail
       replacement, pavement marking, shoulder stabilization

 Procurement process the same as with traditional tender
 Minimum pavement thickness specified
    Random coring carried out to audit thickness through direct
        measurement

 Ideal for low complexity paving projects (mill and pave, overlay
   treatments)

 Used performance based specification.
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Fixed Price Paving
 Performance Based Specifications
       Transfers accountability for quality to the contractor for those
        aspects that are under their care and control
       The MTO does not specify the methods and materials used
        to do the work.
       The MTO specifies and measures performance indicators
        during, at construction completion, and through a 3 year
        warranty period
       Consequences are applied for work that does not conform to
        the performance requirements. (eg. Repair, remove and
        replace)
       MTO’s pre-qualification system is used in lieu of bonding to
        ensure warranty repairs are made


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Fixed Price Paving
Performance Based Specifications
 Performance Requirements are achievable and measurable
   indicators of quality.
     Rutting
     Ravelling (loss of aggregates)
     Flushing
 The contractor is responsible for carrying out Quality Control for
   the product as they see fit to ensure they meet the performance
   requirements.

 Performance specifications provide freedom for contractors to
   bring innovative methods and materials to the project.

 Industry input is considered before any changes are made to the
   performance specifications.
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    Fixed Price Paving
Benefits
   Provides price certainty
      MTO better able to manage construction program
   Allows you to maximize output for your available funds
   Can bring industry innovation to the project
   Allows you to reduce administration costs
   Provides assurance of quality

Challenges
   Limited to low complexity paving projects with limited contractor risk
   Requires a well scoped project
   Requires assurance of repair during warranty (bonding/pre-
    qualification)
   Can be difficult to arrive at price for changes to work
   Currently limited to use on linear infrastructure with few roadside
    appurtenances


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Results?
  Highway 11, Lake Nipigon




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    Other Contract Models

 Design-Bid-Build
      MTO’s traditional model with separate design and construction
         contracts

   Performance Based Area Maintenance Contracts
      One contractor provides all maintenance services within a
         geographical area. Contract provisions are performance based

   Alternate Financing Projects (AFP)
      In collaboration with Infrastructure Ontario
      Design, Build, Finance, Operate, Maintain (DBFOM)




    MTO – Provincial Highways Management Division                   14
 Other Contract Models

 Design-Build
    One contract for combined design and construction
    Provides the ability of MTO to transfer appropriate risks for
       design to the Design-Builder
    Provides the ability of a designer and contractor to collaborate
       on the design of the project
    Collaboration often results in design and construction
       innovations to the project.
    Design-Build can also allow for concurrent design and
       construction thereby reducing overall project time.




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 Other Contract Models

 Construction Manager-General Contractor

         Preliminary
           Design
          (Ministry)
                                    DESIGN
                             Design       Contractor
                            Consultant
                                                                 Accepted
                                           Ministry
                                                                         CMGC Builds

                                                      Rejected


                                                                 Advertise
                                                                 Bid Build

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 Other Contract Models

 Construction Manager-General Contractor
    Uses Design-Bid-Build process, but with a two stage
       procurement process.
      A contractor is initially hired to work as a Construction Manager
       to collaborate with the design team and bring innovation and
       constructability reviews to the design.
      Using price commitments during the initial stage, the
       Construction Manager is then given the ability to bid on the
       construction work.
      By paying for a Construction Manager-General Contractor, the
       MTO expects to retain expertise that will help mitigate project
       risks (utilities, environmental, industry, geotechnical) and provide
       a higher quality design.




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Questions?




                                                     Jeremy Landry
                                                          MTO
                                                jeremy.landry@ontario.ca
                                                   705 647 7849 (x136)



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