TMUA UTILITY LEADERSHIP AND MANAGEMENT CONFERENCE

JUNE 21, 2019

GETTING THE MOST OUT OF CONSULTING

ENGINEERS ALEX BARABANOV PE, PMP, MBA SR. PROJECT MANAGER CITY OF CORPUS CHRISTI

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OUTLINE

1.A little about me and about Corpus Christi 2.Legal framework for engineers in Texas 3.How we utilize consulting engineers 4.How we select consulting engineers 5.How we contract with consulting engineers 6.How we work with consulting engineers 7.Special Topic: Managing Requirements

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1. ABOUT ME AND CORPUS CHRISTI

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ABOUT ME • BS Computer Engineering / University of Utah, 2005 • MBA / Texas A&M University – Corpus Christi, 2008 • PE (Texas), PMP

• Electrical Engineer at FMC Technologies / Corpus Christi, 2005 • Project Manager over process control and SCADA / City of Corpus Christi, 2008 • Capital Improvements Project Manager for Water system / CoCC, 2012

• Professional Interests

• Systems Engineering • Requirements Engineering • Testing and Verification

• Personal Interests • Cooking, especially for others • Mountain sports and activities

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ABOUT CORPUS CHRISTI

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• 326,000 residents • Streets, public buildings, the airport, public health and safety, gas, and water utilities • 1,205 miles or 20 million square yards of streets • 191 public facilities • Water System:

• 2 high-hazard dams • 143 miles of raw water transmission • 161 MGD water plant • 5 water towers, 4 pump stations, 1,600 of distribution pipe

• Wastewater System • 6 treatment plans, 42 MGD combined permitted capacity • 103 lift stations and 1,282 miles of gravity collection

• FY2018-2019 Water CIP budget is $198M, 9 Water Supply + 31 Water = 40 CIP projects • We practice almost exclusively traditional project delivery (Design-Bid-Build)… … AND, we’ve used consulting engineers in a wide variety of ways!

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2. LEGAL FRAMEWORK FOR

ENGINEERS 6

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THE LEGAL FRAMEWORK • “Texas Engineering Practice Act” (TEPA), Occupation Code, Chapter 1001

• Defines “Engineering” (1001.003(c)) • Defines when Professional Engineering is required on public works (1001.053)

• “Professional Services Procurement Act” (PSPA), Texas Government Code,

Chapter 2254 • Identifies engineering as “Professional Services” (2254.002(2)(A)(vii)) • In procuring ... engineering ... services, a governmental entity shall first select the

most highly qualified provider ... then attempt to negotiate ... fair and reasonable price (2254.004)

• This is QBS, or Qualification-Based Selection which is a 2-step process

• NSPE Code of Ethics for Engineers

• Top priority is safety, health, and welfare of the public • Practice only within area of expertise • Be honest and truthful in all dealings

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WHAT AND WHEN IS “ENGINEERING”

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IS P.E. REQUIRED? § 1001.003 – PUBLIC WORKS

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2-STEP QBS PROCESS (FROM TBPE BROCHURE)

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3. HOW WE UTILIZE CONSULTING

ENGINEERS 11

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WHAT CONSULTANTS CAN BRING TO THE TABLE • Design expertise in various disciplines (traditional design for construction)

• Specialized technical expertise • This is cost-effective: we couldn’t afford this expertise in-house

• Exposure, depth, greater array of service/knowledge (national firms)

• Program and Project Management

• Continuity across various stakeholders (Utility managers, Plant managers, Project Managers)

• Staff augmentation • when unable to fill FTE positions

• during ramp-up or ramp-down

• In-house staff complemented by consultants easily optimizable, dynamic workforce

• Makes hiring and firing easy

What is PPP if not this?? 12

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EXAMPLES

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CAPACITY PROJECT / ASSIGNMENT CONSULTANT Administrative Program Manager RH Shackleford Administrative Construction Engineer RH Shackleford Technical Engineering Services Staff

Augmentation Hanson, Freese and Nichols

Construction Inspection AGCM, LNV Technical Technical Plan Review Linda Gurley

Land and easement acquisition management

Centerline ROW Services, LLC

Utilities Systems Feasibility Studies

LAN

Water IDIQ Engineering and Design

Urban Engineering

SUE Cobb Fendley

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EXAMPLES

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CAPACITY PROJECT / ASSIGNMENT CONSULTANT Surveying Urban Engineering Geotechnical Engineering PSI, Rock Engineering Materials Testing PSI, Rock Engineering On-Call Water and Wastewater Treatment Technical Support

LNV

On-Call EI&C Technical Support

Bath Engineering

Various MSA’s Freese and Nichols, Bath, others

Master Planning Support Hazen and Sawyer Traditional Project Design Alan Plummer, Freese and

Nichols Specialty Feasibility Study HDR

System-Wide Assessment Response to water boils 2015-2016

Hazen and Sawyer

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DO CONSULTANTS COST MORE THAN STAFF? • Experienced City PM pay rate ($45/hr) vs. Consultant billing rate ($160/hr) • Fully Loaded Rate = Direct Salary Rate x Multipier • Consultant’s fully loaded billing rate includes:

• Sick Leave • Holiday and Vacation Pay • Contributions to Social Security, Unemployment, Medicare • Contributions to retirement plan • Other employee benefits provided by the firm • Vehicles • Technology • Building / office • General overhead costs (executive, legal, accounting, business development, interest

payments) • Profit

• We allow multiplier of 2.8 to 3.2

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4. HOW WE SELECT ENGINEERS

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MUST BE QUALIFICATION-BASED • RFQ is most non-subjective but other strategies exist

• Occasionally select AE’s without RFQ for small projects (but still based on qualifications)

• Emergency declarations • Allow bypassing formal procurement

• Avoid greater risk, damage, cost

• Sometimes most qualified is more expensive • Larger cities, higher pay scale

• Travel involved

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OUR RFQ PROCESS 1. Develop project descriptions, budget, qualifications (ideally, based on feasibility studies)

2. Assemble standard RFQ document with clear, unambiguous evaluation criteria 3. Publish on CivCastUSA.com (usually for 2-3 weeks)

4. Conduct Pre-Bid conference (week after RFQ is published)

5. Respond to RFI’s and publish addenda as needed (sometimes extend by 1-2 weeks)

6. Administrative check for completeness and correctness (large RFQ up to a month)

7. Individual evaluations (2 weeks)

8. Group discussion (1 workshop)

9. Final scores submitted to Engineering Management

10.Match interest priority with highest average score (1-2 weeks)

11.Publish “Memo to Respondents” with 1st and 2nd choice consultants

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Evaluation

Selection

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ELEMENTS OF RFQ • Project Descriptions

• Specific Qualifications • Evaluation criteria

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SOQ EVALUATION AND SELECTION • Evaluation Panel members score SOQs and compare results

• Selection team members pair AE’s with projects based on interest priority and score 20

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PROBLEMS WITH SOQ’S • AE’s have not been on our side of RFQ • Takes time to evaluate something else

is not getting done • Presentation issues:

• Section titles don’t match • Format doesn’t follow requirements • Too much text (we limit to 25 pages) • Too much graphics • Too verbose • Small fonts painful to read

• Opinions not facts • Don’t like standard terms and conditions

that were included in RFQ • There will always be unhappy consultants

who didn’t get the projects they wanted

SO, WE OFFER 2 LEVELS OF DEBRIEF TO AEs

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A. Experience and Qualifications of the Firm B. Experience and Qualifications of the PM C. Project Approach and Management Plan D. Capacity E. Past Performance

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5. HOW WE CONTRACT WITH

ENGINEERS 22

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MOST USEFUL TYPES OF CONTRACTS Traditional Design for Construction (Design-Bid-Build)

• Ideal for planned projects and well-understood scope of work • Tend to be large, programmed Capital Improvement Projects • Some prior definitions helps, such as feasibility study or preliminary engineering

MSA (Master Service Agreement) • Good for identical specialty services needed frequently • Surveying, SUE, Geotech Engineering, Material Testing • Council approves large “bucket” of $$$ to use as needed • Task Orders (TO’s) are negotiated and issued administratively

On-Call Support Services • Like MSA, but wide spectrum of services • Menu of TYPES of services that can be performed • We’ve done planning assessments, studies, small design, emergency support

IDIQ (Indefinite Delivery / Indefinite Quantity) • Small, frequent, routine design for minor construction on as-needed basis • Delivery Orders issued for repairs such as pavement or water lines • Eliminates overhead of full bid set and bid process

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Ideal for on-call, as-needed support and tasks

Ideal for planned, well-understood projects

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WHAT’S IN A CONTRACT?

AE Proposal States Clearly and Unambiguously: 1. The “What?” Scope of services 2. The “When?” Schedule 3. The “How Much?” Fee

Standard Contract across all projects and engineers • Invoicing rules: within 30 days of the end of invoicing period • Professional Liability • Errors and omissions • Other business rules

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(1/3) SCOPE OF WORK • Hopefully driven by a real, well-understood and well-defined need • Based on User Requirements (special topic at the end)

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Need

Requirement

Feasibility

Program into CIP

Execute Project

Large, planned, capital

improvement projects

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(2/3) SCHEDULE Large CIP Projects

• Usually scope-driven somewhat flexible with schedule • Try to align with fiscal years for ease of programming • 6 months for small design, 1 year for medium, 2 years for large

MSAs, On-Call Support, and IDIQ

• Usually time or schedule-driven • 1 Base Year + 2 Optional Renewal Years • Renews administratively when either time or money runs out first • Individual TO’s (Task Orders) negotiated like contracts • May have to align with fiscal year if funded out of O&M

! Emergency projects are time-driven !

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(3/3) FEE STRUCTURE Sometimes called “Contract Type” Several types but two broad categories:

• Lump Sum, or Fixed Fee • Variable Fees + Expenses

• T&M, NTE (Time and Material, Not to Exceed) • Hourly Billing Rate • Per Diem

Factors influencing choice of fee structure: • How well understood the scope is • Complexity of the task and number of disciplines involved • Risk exposure • What the organization knows and understands

We’ve had success with a blend of Lump Sum and T&M

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Pay for the time

Pay for the product

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(3/3) FEE NEGOTIATION Lump Sump: 2 schools of thought

1. Houston Curve: Design is % of Construction Cost (which can be a wild guess)

• Feasibility studies help zoom in on project cost • Special case: a project bid higher than OPCC AE came for more money

2. Zero-base fee proposal: justify every dollar (hours and rates)

Time-Based: need NTE (Not To Exceed) amount • Easier because we are not committing funds (remember convenience

clause) • Negotiate reasonable billing rate AE to provide confidential, fully loaded

rates sheet • AE’s must submit financial backup with every invoice

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(3/3) FEE NEGOTIATION IDIQ

• $0 - $30k $3,750 • $30k - $100k 10.0% • $100k - $150k 6.25% • $150k - $250k 5.5% • $250k - $350k 5.0% • Over $350k 4.75% • Problem: $2.2M construction cost $104,500 to design, or equivalent of 522 hours = 13 weeks

Other Considerations

• Required expertise (may not be available locally; the best can be expensive) • Travel and Mileage • Minimum charges • Meals and Alcohol (Alcohol is addressed in Standard Contract) • Rates escalation rules on T&M Contracts • Subs markup (can’t have both hours and markup) • Audits: AE to provide certified payroll upon request

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SAMPLE FEE BREAKDOWN

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6. HOW WE WORK WITH ENGINEERS

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EMBRACE THE NATURE OF THE RELATIONSHIP We are clients, not partners. Clients have responsibilities

1. To know what the customer wants • Know our systems, know our needs • Be consistent when communicating our needs

2. To pay the bill 1. We managing public funds special responsibility 2. Verify that the City is getting what it’s paying for (subject to periodic internal audit) 3. Pay on time

It is adversarial AND we have common goals

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GIVE GOOD ASSIGNMENT AND FEEDBACK • Engineers are problem-solvers give them a good problem to solve • Task them with things only they can do best • Replace review workshops with submittal workshops • Complex projects hire someone outside the project to do peer review • Make sure AE’s are involved in construction learning occurs through

demonstrating a functioning project • Always conduct “lessons learned” at the end

• Requires certain level of confidence and maturity • Create a safe environment for everyone to speak of successes and mistakes

• Remember, being selected for a project is one of the best forms of feedback

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IMPROVE COMMUNICATION • Designate one point of contact and authority (usually Project Manager) • Avoid multiple, especially conflicting, sources of direction (improve internal

communication) • Send consistent message from the entire team. To AE’s, we are “The City”. Internally,

we are fragmented into departments and business units • Standardize documentation

• Who requests what and when • Develop standards for proposals, amendments, reports, other deliverables, invoices

• For each project, maintain decisions log (saved us many times) • Develop relationships with people. Relationships improve trust which improves

information flow • Support culture of open expression of opinions (inside our organizations) • Support culture of project management

• Common frameworks and language • Encourage training and certification

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RESOURCES

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• Texas Engineering Practice Act: https://statutes.capitol.texas.gov/Docs/OC/htm/OC.1001.htm

• “When is a PE required” flow chart from TBPE: https://engineers.texas.gov/downloads/TBPEDiagrammatic2014.pdf

• Professional Services Procurement Act: https://statutes.capitol.texas.gov/Docs/GV/htm/GV.2254.htm

• PSPA/QBS brochure from TBPE: https://engineers.texas.gov/downloads/PSPA.pdf

• NSPE Code of Ethics for Engineers: https://www.nspe.org/resources/ethics/code-ethics

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7. SPECIAL TOPIC: MANAGING

REQUIREMENTS 36

Stakeholders

Stakeholders and Requirements Stakeholder Obj. Category Requirement Elected Official Political Get re-elected

(and other requirements)

CM, Legal, & Budget Financial Avoid TCEQ fines and save $$$ (and other requirements)

Utilities Director Business Provide clean and safe drinking water (and other requirements)

Plant Manager Operational Maintain at least 20 PSI at all times (and other requirements)

Operations Manager Technical Have a backup power generator (and other requirements)

Operator Preference Auto start when power lost (and other requirements)

Non

-Tec

hnic

al

Tech

nica

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The Development Cycle

Frequent Permit Violations: • TSS – Daily & Weekly • BOD – Weekly • Ammonia – Daily

No Permit Violations: • TSS – In Compliance

• BOD – In Compliance • Ammonia – In Compliance

Requirements Analysis

High Level Design

Detailed Design Unit Testing

Integration Testing

System Testing

Implementation

Problem Solved

Problem Identified

Design: Requirements Elaboration

Build: System Integration

Problem Domain

Solution Domain

The “V” Model

Requirements Analysis

High Level Design

Detailed Design Unit Testing

Integration Testing

System Testing

Implementation

Problem Solved

Problem Identified

Design: Requirements Elaboration

Build: System Integration

Problem Domain

Solution Domain

The “V” Model

Submittals

Sub-System Test Reports

System Verification and User Acceptance

Solution Validation and User Satisfaction

Cost of Modification Factor Phase in Which

Found Cost Factor

Requirements: 1

Design: 3 - 6

Construction: 10

Construction Testing: 15 - 40

Acceptance Testing 30 - 70

Operation: 40 - 1,000

SOURCE: The CHAOS Manifesto, by The Standish Group (2013)

A Good Definition • A statement that identifies a product or

process operational, functional, or design characteristic or constraint, which is unambiguous, testable or measurable, and necessary for product or process acceptability (by consumers or internal quality assurance guidelines).

Reference: IEEE-STD-1220-1998

SOURCE: IEEE-STD-1220-1998

“Create a means for protecting a small group of human beings from the hostile elements

of their environment”

SOURCE: “Exploring Requirements: Quality Before Design,” by Gause and Weinberg (1989)

“Create a means for protecting a small group of human beings from the hostile elements

of their environment”

• Structure? Weapon? • Size/shape/longevity? • Active or passive?

• One Eskimo? • 25,000 football fans? • 8.4 million Swiss?

• Any interaction? • Family? • Army battalion?

• Internal or external? • Land, sea, or air? • Physical or psychological?

Requirements for Requirements Written Makes them manageable

Complete Capture everything that is expected

Clear and Unambiguous Little chance to confuse or misinterpret

Unique, Non-Redundant Stated once and only once

Consistent Not conflicting with each other

Verifiable Must be able to confirm it has been met

Structured Easy to navigate and build a mental model

Feasible Not violating laws of nature

Legal Not violating laws of humans

Classification Functional What the thing “does” or “must not do”

Described using verbs

Non-Functional How the thing “is” Described using adjectives and pronouns

Interface How the thing connects to other things around it Described using nouns

Constraints Limits on physical or functional attributes Laws, regulations, standards Procurement policies

Non-Functional Requirements Human-Friendly and Ergonomics Operability Usability Capacity Reliability / Availability Maintainability Flexibility / Modifiability Supportability Upgradability Testability Understandability Degradation of service

Safety Security Integrity Quality Designability Efficiency Portability Human engineering Sustainability Workmanship Documentation Visual / Aesthetic

4. Example – Project E11066

• Built in 1954 • 4 MG underground water

storage

• 6 pumps in service since 1954 • Vibrating on top of concrete

water tank

New Pump Station Requirements What is the pressing need? What problem are we trying to solve?

• Stable pressures in City’s water system • Spend more time pumping than fixing • Replace old High Service Building #1

What are typical use scenarios?

1. Operator walks up to HMI screen 2. Screen displays status of each pump using color: Stopped (Red),

Running (Green), Maintenance (Orange) 3. Operator accidentally clicks Start button for the pump in Maintenance

mode 4. HMI displays message “Pump Unavailable” 5. The Start control wire does not get activated

New Pump Station Requirements FUNCTIONAL • Start, run, and shut down pumps automatically, based on target

pressure set by operator • Shut down automatically when low suction pressure detected

NON-FUNCTIONAL

Human-Friendly and Ergonomic

• Restroom and water fountain • Easy access to vital pump components, sight glasses, packing, and

pressure gauges • Visible pump lockout on operator screens

Capacity • Up to 160 MGD at 75 PSI with biggest pump out of service

New Pump Station Requirements Reliability • Include VFD bypass to operate in case of failure

Maintainability • Same pump model as the ones in Building 2 • Overhead crane for pump and motor removal • Easy hook-up to plant air for pneumatic tools • Easy-clean, sloping floors with drains

Flexibility • Option to operate in manual, semi-automatic, and fully automatic mode • Ability to section off half of station and operate it independently

New Pump Station Requirements Safety • Emergency stops on all pumps

• First Aid Kit station, Eye Wash Station

Security • All doors to have locks with combination keypad • Security camera / provided by IT

Documentation • O&M Manuals for the entire pumping complex and for each sub-system and component

• HMI end user manuals consistent with existing style and format

New Pump Station Requirements Visual / Aesthetic • Match architectural style of existing Plant buildings

INTERFACE • Must tie into 60" Building 2 discharge header • PLC must use same protocol as existing Plant system • Must have paved/gravel/dirt road, parking area • Match architectural style of existing Plant buildings

CONSTRAINTS • Tie into existing system only during low-production months (Nov-Feb) • Analytical instruments must use TCEQ-approved methods • ANSI color codes apply to all pipes

Good Resources This one

is free