ADMINISTRATIVE REPORT
Date: July 14, 1997
Dept. File No. 1.40.97.08
CC File No.: 1805
TO: Vancouver City Council
FROM: General Manager of Engineering Services
SUBJECT: Award of Consulting Contract: Value Engineering Services
for Dedicated Fire Protection System
RECOMMENDATION
A. THAT the contract for Value Engineering Services to review the
DFPS pipeline conceptual and detail design be awarded to Value
Management Strategies Inc., at an estimated fee of $75,000
including GST. Funds are available from the project budget
Account Code 18/37/2300/999.
B. THAT the General Manager of Engineering Services be authorized
to enter into a Professional Services Agreement contract with
Value Management Strategies Inc. in consultation with the
Director of Legal Services.
COUNCIL POLICY
Consultant contracts over $30,000 are to be awarded by Council.
Contracts are to be awarded on the basis of best value for fee.
Council approved the Dedicated Fire Protection System for implementation
on April 16, 1992.
PURPOSE
This report recommends that the contract for Value Engineering Services
for the Dedicated Fire Protection System be awarded to Value Management
Strategies Inc.
BACKGROUND
The preliminary design for the DFPS was approved for implementation in
1992 at an estimated cost of $40 million. This design included the
construction of two pump stations downtown (False Creek and Coal
Harbour) and one in the Kitsilano area. The preliminary design also
called for approximately 7.5 kilometres of pipeline downtown, five
kilometres of pipeline to service the Kitsilano area, valve stations,
and hose tender trucks.
To date, pump stations are complete at False Creek (also the control
centre) and Coal Harbour. City crews are currently completing the 3
kilometre-long pipeline to link these two stations, providing a
"backbone" for the system downtown (see Appendix A). This pipeline will
be complete by the end of 1997.
As reported in the specific contract award reports, design and
construction costs for both pump stations and for the pipeline downtown
are above the initial estimated costs outlined in the 1991 conceptual
design report. In addition, an increase in scope of work was approved
to re-construct the repeater station at Grouse Mountain in 1994.
The project team believe that the design standard chosen for the system
is appropriate to meet the project goals. The pipeline connecting False
Creek and Coal Harbour is critical to the viability of the overall
system, thus it was recommended that the existing design standard be
maintained for that section of pipeline.
With both downtown pump stations now complete, and the critical
connecting pipeline between them nearing completion, we are at an
appropriate stage to reassess the design concept and solutions to
determine the best way to meet the basic functional requirements for the
remainder of the system.
DISCUSSION
Value Engineering is a proven management technique using an intensive,
systematic, and creative study to seek the best functional balance
between cost, reliability, and performance. The process delivers
improved value to project owners.
Value Engineering is now being used more often in Canada. The GVRD has
conducted a number of studies for water and sewerage projects. The GVWD
recently completed a Value Engineering study on the design of the water
filtration plant at Seymour Dam. District staff were very pleased with
the results. Numerous proposed alterations were accepted by the design
team, resulting in approximately $20 million in project savings.
A Value Engineering (VE) study uses a team of professionals from various
design disciplines that meet, under the guide of a Team Leader
(Certified Value Specialist), with the original design team to review
the project design. The team then works on its own to further review
the design and propose alternative methods (along with approximate cost
impacts) for the design teams consideration. At the end of the study
both groups get together to review the proposals and decide which ones
will be implemented in the design.
The goal of this VE study is to review and suggest improvements or cost
savings in the DFPS water distribution system design. The study topics
will range from the conceptual level to detailed pipeline design, to
ensure that the design will continue to meet our needs in the most cost
effective manner.
Five Value Engineering consultants were invited to submit proposals for
this work. These proposals were evaluated by four reviewers, that
followed an objective list of evaluation criteria which fall into the
major categories of: capability to carry out work (experience of
Certified Value Specialist), management of work (scheduling, cost
control, quality control, comprehension of objectives), methodology
proposed, and quality of proposal (clarity and logic). Within each of
the major categories there are specific questions. The evaluation was
based on Engineering Services policy that indicates consultants should
be selected on a best value basis.
All proposals were well prepared. Two proposals (U.S. Cost & Value
Management Strategies) were of similar quality and stood out for the
selection team. We have recently discovered that the proposed Team
Leader (Certified Value Specialist) at U.S. Cost has left the firm,
leaving the proposal from Value Management Strategies as the best
available.
The consultants estimated fee of $69,571 plus GST covers the cost of the
team leader, six team members, and the final report through the VE
study. The actual cost will vary depending upon the specific make-up
and final number of team members, which is subject to our review and
final approval. Alterations in proposed team composition will change
the fee structure. Changes to the exact duration of the study may also
adjust the total cost. To cover these uncertainties, we are
recommending that $75,000 be approved for this award.
In keeping with the City's best value policy, the review panel felt
Value Management Strategies' proposal best represented the services
required. The General Manager of Engineering Services, therefore,
recommends that Value Management Strategies be awarded this contract.
The study is expected to be complete by the middle of October, 1997.
This will allow sufficient time to incorporate any recommendations for
design changes into next year's work on the project.
APPENDIX A (Map) on file in City Clerk's Office
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