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Res. 2245 = Alternative Contracting Method for Community Center COUNCIL BILL NO. 3273 RESOLUTION NO. 2245 A RESOLUTION ADOPTING FINDINGS IN SUPPORT OF ALTERNATIVE CONTRACTING METHOD IN LIEU OF COMPETITIVE BIDDING FOR THE CONSTRUCTION OF THE WOODBURN COMMUNITY CENTER WHEREAS, the Woodburn City Council acts as the local contract review board for the City of Woodburn, and in that capacity has authority to exempt certain contracts from the competitive bidding requirements of ORS Chapter 279C; and WHEREAS, ORS Chapter 279C requires a competitive bidding process for Public Improvement Contracts, unless a statutory exemption applies or an individual contract has been exempted from the competitive bidding process in accordance with ORS 279C.335; WHEREAS, ORS 279C.335(2) provides a process for exempting certain public improvement contracts from competitive bidding and authorizes the selection of a contractor through an alternative to traditional competitive bidding, pursuant to OAR 137-049-0130, -620, -640, and -690; and WHEREAS, an alternative contracting method, known as the Construction Manager/General Contractor ("CM/GC") allows public entities to accommodate the various technical challenges of a project in a more flexible and cost-effective approach than the normal competitive bidding process; and WHEREAS, the findings ("Findings") in Exhibit A to this Resolution address the criteria of ORS 279C.335(2) that permit a contract to be exempted from the competitive bidding process; and WHEREAS, notice of the City's intent to exempt the construction contract for the Woodburn Community Center Project ("Project") from the competitive bidding requirement of ORS 279C.335 was published 14 days before a public hearing on this Resolution and a public hearing was held on February 24, 2025, to receive comments on proposed findings supporting the exemption; NOW, THEREFORE, THE CITY OF WOODBURN RESOLVES AS FOLLOWS: Section 1. The City Council adopts the Findings in Exhibit A to this Resolution and hereby approves an exemption under ORS 279C.335(2) from design-bid-build procurement method to allow use of a CM/GC competitive Page 1 -COUNCIL BILL NO. 3273 RESOLUTION NO. 2245 selection process and contracting method for the Woodburn Community Center Project. Section 2. Based upon the Findings, the City Council concludes that the exemption of the construction contract for the Project from competitive bidding, and the use of an alternative competitive selection method of contracting, will promote competition, will not encourage favoritism, and is likely to result in substantial cost savings and other substantial benefits to the City. Approved as to Form: City t?"In e y Date -7 APPROVED: /Frank Lonergan�M' ayor Passed by the Council -2,4(on"bi 2. 0 le,ac"-- Submitted to the Mayor zo,z Approved by the Mayor ealy)-/��eq (-C z C,-)Z'-s Filed in the Office of the Recorder . Zaz ATTEST: Heather iFie' r-son, City Recorder City of Woodburn, Oregon Page 2- COUNCIL BILL NO. 3273 RESOLUTION NO. 2245 EXHIBIT A FINDINGS IN SUPPORT OF ALTERNATIVE CONTRACTING METHOD I. Oregon Statutory Law. Use of Alternative Contracting methods, such as Construction Manager/General Contractor ("CM/GC"), is made possible under ORS Chapter 279C, which permits certain contracts or classes of contracts to be exempt from competitive public bidding under strict procedural safeguards. Like other alternative contracting methods, CM/GC has significantly different legal requirements than a typical design-bid-build project delivery method. Oregon Revised Statute (ORS) 279C.335 requires competitive bidding of public improvement contracts unless specifically exempted from competitive bidding. Under ORS 279C.335(2), a local contract review board (Woodburn City Council, in this instance) may exempt certain public improvement contracts from competitive bidding based on the following: a) The exemption is unlikely to encourage favoritism in awarding public improvement contracts or substantially diminish competition for public improvement contracts. b) Awarding a public improvement contract under the exemption will likely result in substantial cost savings and other substantial benefits to the contracting agency. For the reasons set forth more fully below, it is recommended that the contractor for the Woodburn Community Center Project (the "Project") be selected by the City utilizing a CM/GC competitive selection process. II. CM/GC Project Delivery Method. The Construction Manager/General Contractor (CM/GC) method is a modern construction delivery method used by both public and private organizations. In the CM/GC method, the Owner hires a Design and Engineering firm to perform Building design of a project, and also hires a CM/GC contractor during the design phase to provide construction expertise to the Owner and the design firm. The Project Team is made up of Owner, Designer, and CM/GC. This Team continues throughout the duration of the project. The CM/GC contractor negotiates a Guaranteed Maximum Price (GMP) with the owner for an agreed-upon scope of work, generally near the completion of design. During construction, the CM/GC contractor is responsible for self- Page 3-COUNCIL BILL NO. 3273 RESOLUTION NO. 2245 performing an agreed percentage of the work and subcontracts out the remaining work elements. III. Project Background. At its January 27, 2025, meeting, the Woodburn City Council voted to move forward with a revised plan for a Woodburn Community Center Project, capitalizing on a $15 million grant awarded to Woodburn by the State of Oregon. The City will supplement the State grant funding with an additional $5 million from Parks & Recreation System Development Charges (SDCs), for a total project budget of $20 million. This funding will allow the City to use available resources to upgrade the existing Aquatic Center and expand it to incorporate essential community center features. The Project includes a renovation of the existing aquatic center that adds approximately 17,000 square feet, bringing the total facility size to roughly 32,000 square feet. Features of the new community center will include: (i) aquatic center renovations; (ii) added event space; (iii) new fitness facilities, including cardio and weight training spaces; (iv) improved locker rooms; (v) redesigned entry and lobby; and (vi) expanded parking facility. IV. Findings. As used in ORS 279C.335, "findings" means the justification for a conclusion that a contracting agency or state agency, in seeking an exemption from the competitive bidding requirement of ORS 279C.335(1) (Competitive bidding requirement), reaches based on the considerations set forth in ORS 279C.335(2). Pursuant to ORS 279C.335(2), the following findings justify an exemption from ORS 279C.335(1 ) for the procurement of a contract for the construction of the Project. a) The exemption is unlikely to encourage favoritism in awarding public improvement contracts or substantially diminish competition for public improvement contracts. The City will award the contract through an open and advertised competitive proposal process. The alternative procurement method is open to all interested contractors, including those typically participating in the traditional low bid procurement process. Favoritism will not play a role in the selection of the contractor. Selection will be conducted through an open and advertised Request for Proposal (RFP) process Page 4-COUNCIL BILL NO. 3273 RESOLUTION NO. 2245 and the evaluation criteria will be stated in the RFP. All qualified firms will be invited to submit proposals. The City of Woodburn advertised an RFP notice in the Daily Journal of Commerce (DJC) Oregon in order to provide project solicitation information to all interested contractors. Proposers will be evaluated based on clearly stated criteria. A selection committee comprised of experienced City of Woodburn staff will perform the evaluation, with written scoring based on the evaluation criteria. There will be an opportunity for proposers to protest the scoring of proposals per OAR 137-049-0450. The contractor ultimately selected as CM/GC will be required to demonstrate experience and expertise in providing CM/GC services to public and/or private organizations. The CM/GC selection process is based on qualifications, with price as factor. The fee is, however, less important than the overall qualifications and specialized expertise of the selected CM/GC. The City will benefit by acquiring a CM/GC that has established experience and specialized expertise to manage this project. A low bid process does not provide an opportunity to obtain the most qualified contractor with the specialized expertise needed for the Project. b) Awarding a public improvement contract under the exemption will likely result in substantial cost savings and other substantial benefits to the contracting agency. The CM/GC process provides many benefits and opportunities for cost savings. During the Preconstruction phase, the CM/GC will be evaluating the budget and making suggestions for cost-saving changes and value enhancements. System options and real-time cost estimates provided by the CM/GC throughout the constructability review will aid the Project and allow the City to make informed cost-benefit tradeoff. The CM/GC also identifies whether Project sequencing is viable and design elements can be built as drawn. The CM/GC will also be tasked with keeping the Project Team up-to-date on the latest construction techniques and products. The CM/GC will inform the Project Team of current market conditions, labor and materials availability, and construction methodologies that can reduce design and construction time and costs. An area where CM/GC can also potentially provide a major benefit on projects is in the avoidance of costly changes. Areas of uncertainty can be identified early in the project and managed proactively through such measures as additional investigation, and appropriate schedule or cost contingencies. These factors combine to suggest that CM/GC will yield a lower total price at Page 5-COUNCIL BILL NO. 3273 RESOLUTION NO. 2245 completion than the other methods on complex, schedule constrained projects like these. The CM/GC process also allows "fast track" construction to start while detailing structures, interiors, and systems at the same time as awarding site work, foundations, and long-lead items. Timing the market for the various aspects of construction can result in cost savings and ultimately keeps the Project Team on a schedule. These fast-track benefits are not available under the low bid process. In addition to the generalized findings above, the City also specifically addresses the following factors from ORS 279C.335(2)(b)(A) - (N): (A)How many persons are available to bid A publicly advertised competitive proposal process is being utilized to solicit interest from qualified contractors; granting the exemption does not decrease the opportunity or ability for any qualified contractor to submit a proposal. There are over ten firms in the region that are likely well qualified to do work on the Project and have expressed interest in submitting a proposal on the project. (B) The construction budget and the projected operating costs for the completed public improvement The construction phase for the Project is currently estimated to cost approximately $16 million (with an additional $4 million budgeted for soft costs such as design, permitting, fees, etc.). The construction budget will not be adjusted due to the alternate bidding method. However, cost savings and schedule acceleration may be identified by the contractor during the proposal period, when utilizing the alternative solicitation method. An operating budget has not been determined for the future Community Center. Upon completion, ongoing operating costs will be included in the City's Community Service's budget. (C) Public benefits that may result from granting the exemption When compared to the typical low bid method of project delivery, the CM/GC method provides opportunities to expedite the schedule and improve overall project quality, thereby reducing the overall impacts to the public during construction. (D)Whether value engineering techniques may decrease the cost of the public improvement Page 6 -COUNCIL BILL NO. 3273 RESOLUTION NO. 2245 The traditional low-bidder method of contracting has no requirement or incentive to value engineer the design. The contractor may identify value engineering opportunities during the bidding process, however, the bidder would not be incentivized to communicate those to the City. This approach typically results in early and increased change orders, requiring fee baseline increases, and results in a financial benefit to the contractor and/or delay to the project. Either way, it is an increased risk to the City and often delays the project. In the CM/GC method, the relationship of the owner, construction contractor, and designer fosters a team approach to target-value design. The contractor, for example, can suggest ideas throughout the design development process. Multiple options for high cost or high impact items, such as construction methods, optimal material choices, and local design requirements can be analyzed at various times during each project to evaluate initial construction costs as well as life cycle costs and benefits. (E) The cost and availability of specialized expertise that is necessary for the public improvement The selection of a contracting team with specialized expertise to construct the Project, particularly elements of the natatorium, will increase the likelihood of the project being completed on or ahead of schedule, and resulting in lower costs and increased benefit to the community. The ability to consider expertise, experience, and other factors in the contractor selection is integral to the competitive proposal process, but is not part of the traditional low bid process. (F) Any likely increase in public safety The construction of the Project is very complex, requiring a contractor with expertise to manage an array of challenges and maintain a safe work environment for personnel and the public. The ability to maintain a safe work zone typically takes oversight from a team of experienced and knowledgeable contractor and subcontractors working in unison with good communication. The ability to coordinate all the intricacies of the project would be especially challenging to an inexperienced or narrowly focused team. This project is very complicated and will require ongoing coordination with City of Woodburn staff, subcontractors, emergency service providers, the community, inspectors, and others. The community will be best served by a well experienced contractor who has worked on projects of similar or greater complexity that require similar levels of coordination and communication to a multitude of stakeholders. Page 7-COUNCIL BILL NO. 3273 RESOLUTION NO. 2245 (G) Whether granting the exemption may reduce risks to the contracting agency, the state agency or the public that are related to the public improvement The risks to the City in any construction project are the quality, cost, and schedule of the work. The greatest reduction in risk comes by allowing the City to consider critical elements of experience, schedule, and cost. Because the CM/GC method of project delivery allows the City to select a contractor based largely on staff qualifications and demonstrated success on past projects, the City can reduce risk to the project by selecting a contractor with demonstrated expertise. (H) Whether granting the exemption will affect the sources of the funding for the public improvement Granting the exemption would have no effect on the project funding sources. (IJ Whether granting the exemption will better enable the contracting agency to control the impact that market conditions may have on the cost of and time necessary to complete the public improvement All of the beneficial actions to be undertaken by the CM/GC will improve design, expedite construction, and eliminate the potential for costly change orders. The benefits of value engineering are not available with the low bid process. (J) Whether granting the exemption will better enable the contracting agency to address the size and technical complexity of the public improvement Large Major Capital Projects like the Woodburn Community Center have multiple technical complexities. Areas of technical complexity include: • Pool mechanical equipment and systems • Potentially complex permitting • Control of the construction to limit concerns of neighboring building owners • Unique construction with requirements for energy efficiency and sustainability With the CM/GC delivery method, contractors are selected based significantly on qualifications. As the design is developed, the City and the Project will benefit from qualified contractor input regarding complicated design, construction and permitting issues. In addition, since each contractor is made Page 8-COUNCIL BILL NO. 3273 RESOLUTION NO. 2245 aware of complicated technical issues during the design process, the risks are better identified, understood, and managed. (K) Whether the public improvement involves new construction or renovates or remodels an existing structure The Project consists of both new construction and renovation/rehabilitation of the City's existing aquatic center facility. (L) Whether the public improvement will be occupied or unoccupied during construction The Project site will be unoccupied during construction. (M) Whether the public improvement will require a single phase of construction work or multiple phases of construction work to address specific project conditions The Project will be advertised as one phase, however, respective contractors may recommend the best approach or sequencing for executing the work. (N)Whether the contracting agency or state agency has, or has retained under contract, and will use contracting agency or state agency personnel, consultants and legal counsel that have necessary expertise and substantial experience in alternative contracting methods to assts in developing the alternative contracting method that the contracting agency or state agency will use to award the public improvement contract and to help negotiate, administer and enforce the terms of the public improvement contract. The City will use City Staff, City Attorneys, and consultants to assist in developing the proposed CM/GC contracting method and to help negotiate, administer and enforce the terms of the pending public improvement contracts. Although the City has not used the CM/GC competitive solicitation proposal type of alternate contracting method for construction contracts before, City staff has experience in soliciting and negotiating engineering services contracts through the use of RFPs, and alternative solicitation methods of RFQ/RFP. City Staff also investigated use of the CM/GC solicitation methodology used by other local agencies. This approach has a track record of being highly successful for use on complex projects such as the Community Center Project. V. Public Hearing. Page 9 -COUNCIL BILL NO. 3273 RESOLUTION NO. 2245 In accordance with ORS 279C.335(5), the City published the required notice of public hearing on February 10, 2025, and the hearing was held on February 24, 2025. At the hearing, interested parties had the opportunity to appear and present comments. VI. Summary. After careful consideration, the Woodburn City Council, acting as the local contract review board, has found the Alternative Contracting Method for CM/GC more appropriate than a traditional design-bid-build process to meet the overall project objectives for the Woodburn Community Center Project. The CM/GC process offers the best opportunity for successfully managing a large, complex construction project on a budget and on time. Page 10-COUNCIL BILL NO. 3273 RESOLUTION NO. 2245