The City of Greater Sudbury is issuing an Addendum to the Event Centre Design-Build Request for Proposal (RFP). The amendment changes the method of the procurement from the current Design-Build to a Progressive Design-Build (PDB) process.
The procurement process began in April 2017 with the issuance of a Request for Supplier Qualification which produced three short-listed teams for the RFP process. The next step, the issuance of the Design-Build RFP, was delayed until January 2022 due to the pandemic and legal challenges related to property rezoning. During that time, market conditions in the construction industry shifted dramatically.
Following the RFP release on January 28, 2022, and through the routine process steps following the RFP’s release to address Proponent questions and holding structured commercially confidential meetings with Proponents, several requests to revise the procurement process were received. These requests addressed various aspects of the Bid Solicitation Documents, which is typical in RFP processes. In this process, questions ranged from inquiries about the scope of deliverables to pricing, and also included requests from Proponents to consider changing the form of the Proposal submission to acknowledge current market risks, particularly with respect to inflation effects, supply chain reliability and labour availability.
The City consulted with legal and industry advisors, including the Fairness Monitor that has been engaged in this procurement process since it started. The legal and industry advisors confirmed that the construction industry is currently resisting fixed-price contracts, such as Design-Build processes, as a result of current market risk levels. Proponents have been unwilling to assume the risks associated with a fixed-price contract early in the design process and, in some cases, have been declining to participate in the RFP altogether. This would reduce the potential for the City of Greater Sudbury to achieve its objective of constructing a new event centre to replace its current 70-year old community arena.
Instead, there is a shift to alternative procurement methods that use a different approach for managing these market risks. A relatively new procurement process, known as Progressive Design-Build, manages market risks by increasing the level of engagement between the Preferred Proponent and the client (in this case, the client is the City of Greater Sudbury). With PDB, a multi-step collaborative process is used to determine a final, approved design and associated cost. These steps provide additional checkpoints for City Council to evaluate the Proponent’s approach for constructing the Event Centre and, if necessary, make adjustments that maintain an appropriate balance between the building’s features and the project’s anticipated construction cost. At predefined steps in the PDB process, the Preferred Proponent and the City review design features and cost estimates before proceeding to finalize the design and its cost. This approach recognizes current market conditions affecting materials and labour availability and increases the assurance the City will achieve best value from its competitive procurement process.
Therefore, the Project Team and Steering Committee determined that a shift from a fixed-price contract to a PDB will ensure a competitive procurement and achieve best price and value for the municipality. To view the PDB RFP for the Event Centre, click here.