Seattle is widely known for being a pioneering City in areas such as coffee, software, and aerospace. In keeping with this pioneering spirit, Seattle Public Utilities was also one of the first major water utilities in the country to implement alternative contracting, including design-build. Scott Haskins was part of the executive team at Seattle Public Utilities that spearheaded development of the Tolt and Cedar Water Treatment Plants using design-build-operate contracting. R.W. Beck served as owner’s advisor on these projects and is currently assisting SPU in reviewing its overall capital program to help identify opportunities for design-build and other types of alternative contracting.
DBIA: What drove SPU to take a chance with design-build-operate contracting for the Tolt and Cedar projects — a form of contracting that was not common in the water utility business?
Haskins: At the time we made those decisions we were facing some regulatory and organizational challenges. Because of our unique position having pristine, protected and largely City owned watersheds for Tolt and Cedar; we had historically been able to achieve good water quality with minimal treatment — really just chlorination and some pH control. But we faced the need to upgrade treatment to meet current and anticipated future water quality regulations. Organizationally, our water utility had not implemented major projects like this for a very long time so our in house technical expertise was limited.
What we wanted to achieve was technical excellence, reliability and long-term cost savings considering both capital and O&M costs. We wanted to get the benefit of having a wide range of nationally known technical experts look at our situation and come up with creative treatment solutions. We felt these objectives could best be achieved by using the market place to drive innovation and that the private sector might be in a better position to balance design decisions versus operational risks and requirements. That is why we chose to implement these projects with an operating component in addition to design-build. We were really the first to do this in the U.S. — but we drew on successes that had been achieved in other parts of the world.
DBIA: Looking back, what challenges and obstacles did you face?
Haskins: Because of authorizing legislation sunset provisions that existed when we decided to use alternative contracting for Tolt, we had to develop a focused, cohesive internal project team quickly, and they needed to be empowered to make decisions. For both Tolt and Cedar, we had to work closely with elected officials and regulators to get them comfortable with the types of technical innovations that were being proposed. On Tolt, the winning proposal involved high-rate direct filtration – something that our State Department of Health really didn’t have much experience with. On Cedar, we had treatment with UV light — something that was very new in the United States.
DBIA: Both Tolt and Cedar had a significant treatment component — where innovative technology was important and where performance objectives could be specified and demonstrated. What about utility projects that are not so technology driven — do you see any advantages with design-build for them?
Haskins: Even where the opportunities for innovation are reduced, I see some real benefits to design-build delivery — it can be more efficient and cost-effective, and can save time. It might also help us improve our capital projects accomplishment rate since design-build would typically involve less agency process and overhead. We also like the single point of responsibility offered by design-build and the ability to consider qualifications and experience in selecting contractors. Also, if done properly, value based selection and performance based contracts are other important considerations.
DBIA: What challenges do you face in trying to use design-build more routinely?
Haskins: Well, a lot of them are cultural. Although we pride ourselves on being innovators, we are still somewhat tied to conventional ways of doing things. This goes beyond individuals: the entire framework for public works contracting — the legal rules, tools we use, procedures we have adopted — presume traditional design-bid-build. It’s a lot of inertia to overcome. With engineering projects, we also have to resist the mentality that assumes there is only one way to do things — only one solution to a given problem. And we face the challenge of developing enough experienced staff with the appropriate training to be successful.
DBIA: Are there any limitations that are inherent in design-build that concern you?
Haskins: I think it is difficult for us to express what we want in terms of performance or outcomes rather than dictating a specific design solution. I’ve also heard concerns about assuring good quality facilities using design-build. It seems to me that this can be addressed by establishing good standards for materials, equipment, and construction in the contract technical specifications, but I think this will continue to be a concern until there is a well established track record.
DBIA: How are you addressing some of the internal challenges you’ve described?
Haskins: As you know, we are working with help from R.W. Beck to review our six-year capital program, identify projects that are suitable to various alternative contracting options such as design-build, establish criteria and internal processes for making project delivery decisions. Also, with a very expansive infrastructure and large capital program, we are looking at ways to improve project management and be more project focused.
DBIA: What do you think the future holds for use of design-build for northwest water and wastewater utilities?
Haskins: I think we will see a greater use of design-build. But how much greater will depend on a lot of factors. To really take hold, design-build needs to have champions — and that will take more education and training as well as a track record of success stories. And there need to be opportunities for some smaller contractors to play in the design-build market. I think the education and training opportunities provided by DBIA are a start — but DBIA is often perceived as a “large contractor” organization. More concerted outreach to smaller contractors would benefit the entire design-build industry.
INFO: Seattle Public Utilities (www.seattle.gov)