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HomeMy WebLinkAboutAgenda Item - 2025-07-01 - Number 09.4 - Resolution 25-34, Special Procurement for South Shore Fire Station Page 2 BACKGROUND Constructed in 1971, the South Shore Fire Station is the oldest of Lake Oswego's four fire stations. Located at 1880 South Shore Boulevard,firefighters based out of this station primarily respond to calls for service within the southeast quadrant of the city. In 2024, South Shore Fire Station Crews responded to 1,106 calls ranging from public service and medical emergencies to fire and life safety incidents. In 2007-08, City staff studied facility deficiencies and scoped replacement costs. In 2009 City Council considered, and deferred, a rebuild. Results from the City's 2023 community survey found that more than 50% of respondents supported investing in the South Shore Fire Station Project. In 2024, the City Council designated this project as a strategic initiative, directing staff to "begin a needs assessment and community engagement process to rebuild the South Shore Fire Station." With Resolutions 24-38, 24-39, and 24-45 the City Council created the South Shore Fire Station Task Force, appointed 17 members after a community-wide recruitment and selection process, and designated Council Member Trudy Corrigan as the Council's Liaison to the Task Force. In 2025, as part of Council's adopted goal: Strengthen public trust in the City through continuous improvement, outstanding customer service, infrastructure investments, and fiscal stewardship, Fire was directed to, "Conclude the South Shore Fire Station needs assessment and launch a community engagement process." With Council's direction, staff have proceeded with these steps: • Owner's Representative: On April 28th, the City awarded a consultant contract to OTAK to provide technical project management assistance to develop pre-bond assessed costs for the proposed fire station. • Community Polling Services: In May 2025 staff awarded FM3 Research the Polling Services Contract. Staff worked to develop questions that would assess the community's knowledge of South Shore Station issues, appetite for Bond with range of costs, and reaction to "For" and "Against" statements regarding putting the South Shore Fire Station Project to Bond. • Architectural Design Services: RFP for Conceptual Designs to inform cost and vision for the proposed fire station has been posted and applications are due July 10th, 2025. DISCUSSION Construction Manager/General Contractor(CM/GC)Alternative Service Delivery In traditional Design-Bid-Build Methods each step in the process is siloed, with the bid not proceeding until the work is complete from the designer, and the same for the general contractor. This method brings a lot of uncertainty and potential risk for the City. With the alternative Construction Manager/General Contractor (CM/GC) Delivery Method (used for both Millennium Park Plaza and City Hall) We have all contractors working together from the Respect, Excellence. Trust. Service. 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO,OR 97034 WWW.LAKEOSWEGO.CITY Page 3 beginning. Staff will work closely with the Owner's Rep, Architect, and GC as the plans develop. There will be constant communication surrounding design, cost, and functionality which reduces City risk and increases ability to manage the budget throughout the project. ALTERNATIVES to CM/GC and Advantages/Disadvantages: • Design Bid Build (DBB):Traditional method where, through competitive bidding process, owner hires Architect to complete design,then bids out construction contract separately. o Advantages: ❖ Clear roles and responsibilities ❖ Familiar process for many stakeholders o Disadvantages: ❖ Longer project duration • Higher risk of costly change orders ❖ Less collaboration between designer and builder • Design Build (DB): A single entity is responsible for both design and construction, providing a unified workflow from concept to completion. o Advantages: ❖ Faster project delivery(overlapping design and construction phases) ❖ Single point of responsibility ❖ Potential for reduced conflicts and change orders o Disadvantages: • Less owner control over design ❖ Limited checks and balances between designer and builder ••• Requires clear scope definition early • General Manager/General Contractor(GM/GC):The general contractor is brought on early in the design phase to provide constructability and cost estimates. Construction work may be bid out or self-performed. o Advantages: ❖ Early contractor involvement improves planning • Improved cost control and risk management ❖ Allows for collaborative scheduling o Disadvantages: ❖ Less price competition on construction phase ❖ Requires strong team collaboration ❖ May induce complexity in roles if not well-defined After careful consideration, consultation with City Project Managers of City Hall, the newly constructed LORAC, and upon recommendation of our contracted Owner's Representative, Fire Staff recommend the alternative CM/GC method of service delivery in lieu of the traditional design-bid-build process. The findings, in Exhibit A, support an exemption from competitive bidding and support the use of the Construction Manager/General Contractor method of contracting. Respect, Excellence. Trust. Service. 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO,OR 97034 WWW.LAKEOSWEGO.CITY Page 4 FISCAL IMPACT CM/GC Services (Costing and value engineering conceptual designs)-$50,000.00 Funds to come from Fire Department Budget RECOMMENDATION Move to Adopt Resolution 25-34. ATTACHMENTS • Exhibit A, Findings of Fact • Attachment 1, Resolution 25-34 Respect. Fxcellence. Trust. Se— He. 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO,OR 97034 WWW.LAKEOSWEGO.CITY EXHIBIT A FINDINGS OF FACT AUTHORIZING: A SPECIAL PROCUREMENT FOR THE USE OF THE CONSTRUCTION MANAGEMENT/GENERAL CONTRACTOR (CM/GC) METHOD OF CONTRACTING FOR DEVELOPMENT AND COST PROJECTIONS OF PROPOSED NEW SOUTH SHORE FIRE STATION. 1. General ORS 279C.335(2), OAR 137-49-0620, OAR 137-49-0640, and OAR 137-49-0690 permit the local contract review board to exempt contracts from competitive bidding requirements upon approval of findings of fact showing that an alternative contracting process is unlikely to encourage favoritism or diminish competition and that the process will result in cost savings to the City. The City of Lake Oswego City Council acts as the Local Contract Review Board ("LCRB") for the City. OAR 137-49-0690(1) describes the factors in determining whether the Construction Manager/General Contractor (CM/GC) method of construction is appropriate as an alternative to traditional competitive bidding. The CM/GC approach is appropriate for construction projects that would benefit from a collaborative team approach to achieve time savings and cost savings, and to address technical complexities. The CM/GC process is appropriate when needed to address issues such as public safety, delivery of an early budget or Guaranteed Maximum Price, and projects requiring complex phasing or highly coordinated scheduling. ORS 279C.337 and OAR 137-049-0690(5) address the solicitation and contract requirements for CM/CG services. These requirements will be met in the solicitation process. ORS 279C.330 defines "Findings" and identifies specific information to be provided as a part of the contracting justification. Under ORS 279C.335(5) a public hearing must be held before the findings are adopted, allowing an opportunity for interested parties to comment on the draft findings. PURPOSE OF THESE FINDINGS: The Lake Oswego City Council held a public hearing as required by ORS 279C.335 and makes the following findings with respect to the issue of whether the construction contract for the proposed new South Shore Fire Station ("Project"), as defined herein, should be exempt from competitive bidding, by the use of the CM/GC method of alternative contracting. The Findings of Facts apply to the CM/GC method of public improvement projects described below, in accordance with ORS 279C.335(2). 2. Background South Shore Fire Station, built in 1971 and occupied by the City of Lake Oswego Fire Department, is at the end of its useful life. The facility is undersized, does not provide sufficient separation of contaminated Personal Protection Equipment from station living areas, and does not meet seismic standards for essential services. The fire department has strategically invested in deferred maintenance issues to extend the life of the facility. In 2007-2008 City Staff studied facility deficiencies and scoped replacement costs. In 2009 City Council considered and deferred a rebuild. Results from the City's 2023 community survey found that over 50% of respondents supported investing in the South Shore Fire Station Project. In 2024 City Council designated this project as a strategic initiative directing staff to "begin a needs assessment and community engagement process to rebuild the South Shore Fire Station." On September 3, 2024, the City Council adopted Resolution 24-38 creating the South Shore Fire Station Task Force. The Task Force identified that eleven significant deficiencies remain with resolution unattainable within the confines of the initial construction of the building. These include: • Not built to "essential facility" seismic standards • Inadequate apparatus and vehicle storage • Electrical system and back-up power unreliable and in poor condition • HVAC System not functioning and needs replacement • Roof needs replacement, does not drain properly • Group bathroom lacks privacy and equitable accommodation • No diversion system for run-off • Inadequate storage space for medical supplies and personal protection equipment Due to the complex and technical nature of this essential facility build, costs from traditional Bid-Design-Build Service Delivery have the potential to increase due to multiple needed change orders as the project moves from design to build. With the CM/GC Process having the Construction Manager and General Contractor at the table from the beginning it allows the entire team: City (Owner), Owner's Representative, Architect, and General Contractor to prioritize function over form and choose cost-saving materials and technology throughout the lifespan of the project. The City of Lake Oswego Fire Department proposes using the alternative contracting procedure to obtain proposals and award a Construction Management/General Contractor Contract for this Project. The Project includes conceptual design and costing for potential bond referral. Fire staff have contracted with OTAK to act as the Owner's Representative for the Project and to assist with the Request for Proposals process for an architect and a CM/GC. The CM/GC will work closely with the architect to determine accurate costing for the Project in preparation to go out for bond in May 2026. The CM/GC shall provide all management, supervision, labor, services, transition planning, equipment, tools, supplies, and any other item needed to complete construction. GM/GC Project Schedule The updated preliminary project schedule is as follows: • Hire Owner's Representative (OTAK): May 2025 • Hire Polling Contractor (FM3): June 2025, Results June 2025 • Post Architectural RFP for Conceptual Designs: June, 16, 2025 • Post CM/GC RFP for cost analysis of conceptual design: August 2025 • Present Findings to Council: December 2025 FINDINGS OF FACT SUMMARY FINDINGS Use of the CM/GC process for the proposed South Shore Fire Station complies with the criteria outlined in ORS 279C.335 (2): 1. It is unlikely the exemption will encourage favoritism or substantially diminish competition. The selection process will be fair and open to all interested proposers as established within the findings below. 2. The exemption will result in cost savings to the City. Also, value will be added to the Project that could not otherwise be obtained. SPECIFIC FINDINGS which substantiate the summary findings are as follows: 1. The CM/GC will be selected through a competitive process in accordance with the Request for Proposal (RFP) selection process.Therefore, it is unlikely that the awarding of the construction contract for the Project will encourage favoritism or substantially diminish competition. This finding is supported by the following: A. SOLICITATION PROCESS: Pursuant to ORS 279C.360, the CM/GC solicitation will be advertised at least once in the Daily Journal of Commerce, and in as many additional publications as the City may determine, including the City of Lake Oswego website. B. FULL DISCLOSURE: To ensure full disclosure of all information, the Request for Proposals solicitation package will include: 1. Detailed Description of the Project 2. Contractual Terms and Conditions 3. Evaluation Criteria, including General Conditions. 4. Role of Evaluation Committee 5. Selection Process 6. Provisions for Comments 7. Complaint Process and Remedies Available C. COMPETITION: As outlined below, the City will follow processes that maintain competition in the procurement of a CM/GC. 1. The City anticipates that competition for this contract will be similar to that experienced in other CM/GC projects of this type.The competition will be open to all qualifying proposers. 2. The City anticipates communicating with the construction contracting community through the Request for Proposal GM/GC. 3. The solicitation and evaluation process will be open and impartial. Selection will be made on the basis of final proposal scores derived from price and other components, which expand the ground of competition beyond price alone to include experience, quality, innovation factors, etc. 4. The competitive process used to award subcontracts for all competitively-bid construction work will be specified in the CM/GC contract and will be monitored by the City. The City will designate in the CM/GC contract the percentage of construction work that must be subcontracted. D. SELECTION PROCESS: Other highlights of the selection process will include: 1. A mandatory pre-proposal conference will be announced and held to inform potential proposers of the Project. This conference will be open to all interested parties. During this pre-proposal conference, as well as any time prior to ten (10) days before the close of the solicitation, interested parties will be able to ask questions, request clarifications and suggest changes in the solicitation documents if such parties believe that the terms and conditions of the solicitation are unclear, inconsistent with industry standards, or unfair and unnecessarily restrictive of competition. 2. The evaluation process will determine whether each proposer and its proposal are qualified and responsive to the minimum requirements of the RFP, and will weigh the responses relative to the criteria. The following process will be used: • Proposers will be evaluated for compliance with the minimum qualifications for selection. Qualified Proposers' Proposals will be evaluated for completeness and compliance with the requirements of the RFP. Those proposals that are materially incomplete or non-responsive will be rejected. • Proposals will be independently scored by the voting members of the Evaluation Committee. Scores will then be combined and assigned to the proposals. • The Evaluation Committee will convene to select the highest-scoring proposers (the Competitive Range) for formal interviews. • Competing proposers will be notified in writing and will be given seven (7) calendar days to review the RFP file and evaluations. Any questions, concerns, or protests about the process for evaluation of the written proposals or the selection of the Competitive Range will be addressed in the manner required by OAR 137-049-0450. • The Evaluation Committee will conduct interviews of those proposers within the Competitive Range. • The Evaluation Committee will use the interview to confirm the Evaluation Committee's understanding of the proposal, and the processes and procedures that will be used by the Proposer to construct the Project in an efficient, cost-effective, and timely manner. Based upon the cumulative scoring, the Evaluation Committee will rank the proposers within the Competitive Range. • The City or designee will negotiate a contract with the top-ranked firm. If an agreement cannot be reached, the City will have the option to terminate negotiations with that proposer, and then negotiate an agreement with the second-ranked proposer, and so forth. • Proposers within the Competitive Range will be notified in writing of the top- ranked proposer and will be given an opportunity to review the RFP file and evaluations of the interview portion. Any questions, concerns, or protests about the Competitive Range evaluation process will be addressed in the manner required by OAR 137-049-0450. 3. The CM/GC contract will require the CM/GC to use an open, competitive selection process to bid all work to be performed by subcontractors. (The CM/GC may be permitted to bid upon portions of the construction work in the same manner as other subcontractors.) 2. Awarding the construction contract for the Project using the CM/GC method will likely result in cost savings to the City. This finding is supported by the following information required by ORS 279C.335 (2)(b) and ORS 279C.330. A. OPERATIONAL, BUDGET, FINANCIAL DATA 1. BUDGET: Early reliable pricing provided by the CM/GC during the design phase will reduce the potential for time delays due to later discovery of higher than-anticipated costs and consequent changes of direction. The CM/GC process will allow the City to set a construction budget. The CM/GC procedures will allow the City to work with the selected CM/GC to use value engineering to keep the Project within the budget. 2. LONG TERM COSTS: The Project will require expertise regarding the constructability and long-term cost/benefit analysis of innovative design. That knowledge is best obtained directly from the construction industry. Many decisions will be required during the design process that call for immediate feedback on constructability and pricing. Under the traditional design-bid-build process, there is a high risk of increased change orders and schedule impacts for a project of this size and complexity. There are significant costs associated with delay, both as to project costs and to the services to the public. Time is of the essence. The CM/GC process will assist in providing a scope of work and constructible design that best meet the requirements of the Project with significantly lower risk to the project costs and time for construction. Involving the CM/GC during design will allow project risks to be addressed early. Teamwork between the City, the design consultant, and the construction contractor (CM/GC) will minimize those risks. 3. FEWER CHANGE ORDERS: When the CM/GC participates in the design process, fewer change orders occur during project construction. This is due to the CM/GC's better understanding of the owner's needs and the architect's design intent. As a result, the project is more likely to be completed on time and within budget. In addition, fewer change orders reduce the administrative costs of project management for both the City and the CM/GC. 4. SAVINGS: If actual costs are less than the GMP, the entire savings will be realized by the City. B. PUBLIC BENEFITS 1. TIME SAVINGS: The CM/GC method allows construction work to commence relatively rapidly on some portions of the work while design continues on the remaining portions. This will shorten the duration of the construction and allow completion of the Project, and its component parts, by the due date(s). Use of a CM/GC in conjunction with the team approach will result in a better coordinated project and speedy completion of the South Shore Fire Station, in addition to minimizing disruption to the public and City staff. 2. COST SAVINGS: The Project will benefit from the active involvement of the CM/GC during the design process for each facility in the following ways: • The CM/GC's input regarding the constructability and cost effectiveness of various alternatives will guide the design toward the most cost-effective choice. • Knowing the specific equipment available to the CM/GC allows creation of a design that best utilizes the capacity of that equipment. • The contractor will be able to provide current and reliable information regarding the cost of materials that are experiencing price volatility and the availability of scarce materials. • The contractor will also be able to order materials while design is being completed in order to avoid inflationary price increases and provide the lead- time that may be required for scarce materials. • The contractor will be able to help develop design documents to reflect the best work plan that accommodates the City, the design team, and contractor within the project deadline; • The CM/GC will have early involvement in the specification of materials and work phasing, allowing: o The CM/GC to schedule the best grouping of the subcontractor bid packages that will help insure optimum subcontractor work coverage; o The most efficient construction staging area in and around the project area; and o Adjustment of the work plan when the needs change along the way that has as minimal impact upon price and schedule as possible. This cannot be addressed by the usual design/bid/build method of construction. All of the above results in a better coordinated project with less cost and change orders. 3. GUARANTEED MAXIMUM PRICE (GMP): By participating in the construction document phase, the CM/GC will be able to obtain a complete understanding of the City's needs, the architect's design intent, the scope of the project, and the operational needs of the City, and will be able to offer suggestions for improvement and cost- reduction. The CM/GC will also be able to better calculate an appropriate GMP, a price within which the CM/GC is contractually bound to implement the final project design. The CM/GC is able to guarantee the maximum price to complete the project because the CM/GC was involved in the design process, identification of the specifications for the work, preparation of the construction schedule, and establishment of the sequence of work. C. VALUE ENGINEERING (VE) 1. WITH THE DESIGN-BID-BUILD PROCESS: If the City were to utilize the design-bid-build method, the contractor would not participate in value engineering. Instead, a value engineering consultant would be hired to participate in the design and cost evaluation process. This adds costs and administrative complications, without providing the same benefits of early contractor participation. 2. WITH CM/GC: The CM/GC process offers a unique opportunity for value engineering that is not possible through the design-bid-build process. VE is done most effectively by a team consisting of the owner, architect, consultants, and the CM/GC. When the CM/GC participates, the team can render the most comprehensive evaluation of all factors that affect the cost, quality, and schedule of the project. D. SPECIALIZED EXPERTISE: The construction project requires specific knowledge of fire stations and how they operate. Early selection of the CM/GC and inclusion of the CM/GC's expertise with the other members of the project construction team creates more informed, better quality decision-making by the project construction team. A more efficient construction team saves the City money. E. MARKET CONDITIONS: As well as the multitude of construction market factors that exist today in Oregon [e.g., competition of other projects, environmental issues that limit construction materials, variable bid market, unemployment, etc.,] the difficulty in establishing the best work sequence complicates the City's ability to accurately estimate the cost of this project. The CM/GC method will be more likely to result in a more experienced and better suited contractor for the particular project.The complexities that need to be addressed to accomplish the tasks are not well served by the usual competitive procurement. CM/GC method ensures that the City can select the best contractor for the most beneficial reasons for the Project outside of having to select based upon lowest responsive and responsible bid. F. TECHNICAL COMPLEXITY:Technical expertise will be required for environmental management, quality management, scheduling, estimating, meeting sustainable facilities standards and guidelines, and ensuring energy efficiency. The complexity and scheduling issues discussed in the Background section above will require special expertise. However, the Project will draw upon existing skills and capabilities available in the construction community. Specialized skills will be required of the CM/GC to negotiate and price multiple options and schedule complex tasks. A high level of coordination among the Fire department, the design entity, and the CM/GC and subcontractors is required and facilitated by the CM/GC approach. ATTACHMENT 1 RESOLUTION 25-34 RESOLUTION 25-34, A RESOLUTION OF THE LAKE OSWEGO CITY COUNCIL,ACTING AS THE LAKE OSWEGO PUBLIC CONTRACTING REVIEW BOARD PURSUANT TO ORS 279A.060, ADOPTING FINDINGS AND APPROVAL FOR A SPECIAL PROCUREMENT FOR PROFESSIONAL SERVICES, EXEMPTING THE CONTRACT FROM COMPETITIVE SOLICITATION AND USING THE CONSTRUCTION MANAGER/GENERAL CONTRACTOR (CM/GC) METHOD FOR A POTENTIAL NEW SOUTH SHORE FIRE STATION. WHEREAS, the Lake Oswego City Council acts as the local contract review board for the City, and in that capacity has authority to exempt certain contracts from the competitive bidding requirements of ORS Chapter 279C; and WHEREAS, ORS 279C.335(2) provides a process for exempting certain contracts from competitive bidding, ORS 279C.337 authorizes procurement of construction manager/general contractor services in accordance with its provisions and Attorney General Model Rule OAR 137-049-0690, as an alternative to traditional competitive bidding, and the Lake Oswego Public Contract Rules include OAR 137-049-0690; and WHEREAS, the above cited statutes and rules authorize the selection of a contractor through the request for proposal ("RFP") Construction Manager/ General Contractor (CM/GC) method of solicitation and construction; and WHEREAS, the findings ("Findings") in Exhibit A to this Resolution address the criteria of ORS 279C.335(2): (a) The exemption is unlikely to encourage favoritism in awarding public improvement contracts or substantially diminish competition for public improvement contracts;and (b) Awarding a public improvement contract under the exemption will likely result in substantial cost savings due to competition, operational, budget and financial data, public benefits, value engineering, specialized expertise required, market conditions, and technical complexity; and WHEREAS, the draft Findings were made available to the public 14 days before the public hearing on this Resolution; and WHEREAS, the solicitation of the CM/GC will comply with the requirements of ORS 279C.337 and OAR 137-049-0690; and WHEREAS, the Lake Oswego City Council determines that the City of Lake Oswego South Shore Fire Station should be constructed by the CM/GC method of contracting. Resolution 25-34 Page 1 of 2 NOW,THEREFORE, BE IT RESOLVED by the City Council of the City of Lake Oswego that: Section 1. City Council adopts the Findings in Exhibit A to this Resolution. Section 2. Based upon the findings, the Lake Oswego City Council concludes that the exemption of the construction contract from competitive bidding, and the use of the alternative request for proposal (RFP) CM/GC method of contracting, will promote competition, will not encourage favoritism, and are likely to result in substantial cost savings to the City. Section 3. The contract for costing and construction of the City of Lake Oswego's South Shore Fire Station by a Construction Manager/General Contractor for a Guaranteed Maximum Price is exempted from competitive bidding, and the contractor shall be selected by the RFP CM/GC method in accordance with the City's public contracting rules, including but not limited to OAR 137-049-0690, and the process described in the Findings. Section 4. Effective Date. This Resolution shall take effect upon passage. Considered and enacted at the regular meeting of the City Council of Lake Oswego on the 1st day of July, 2025. AYES: NOES: EXCUSED: IL ABSTAIN: Joe Buck Mayor ATTEST: Kim Vermillion Interim City Recorder APPROVED AS TO FORM: Ellen Osoinach Resolution 25-34 Page 2 of 2